This Warren Buffett Stock to Own Forever Is a Buy Today

Описание: #Morningstar  #WarrenBuffett #StockPicks

Buffett expects to own some stocks indefinitely—and one of those stocks looks cheap today.


00:00 Introduction

00:34 What Makes Warren Buffet’s Stocks So Special?

01:01 Buffet’s “Forever” Stocks

01:44 Occidental Petroleum OXY



Susan Dziubinski: Hi, I’m Susan Dziubinski with Morningstar. Warren Buffett surprised many earlier this month when he said he’d step down as CEO of the Berkshire Hathaway BRK.A BRK.B at the end of this year. Greg Abel will step into the CEO spot on Jan. 1, 2026, but Warren Buffett will retain his role as Berkshire Hathaway chairman.



Widely regarded as one of the greatest investors of all time, Buffett has had an uncanny ability to identify businesses that have clear competitive advantages and that are likely to be able to maintain those advantages over a very long time.



In fact, in a recent shareholder letter, Buffett identified a few stocks in Berkshire’s publicly traded portfolio that he expects Berkshire to hold indefinitely. What makes these stocks so special? Buffett says these companies make him comfortable because they are hugely successful in their base businesses. Plus, the products and services that these companies provide “travel,” meaning that they’ve become worldwide brands and essentials of the world we live in.



Buffett’s list of forever stocks includes longtime holdings like Coca Cola KO, which has maintained a wide economic moat thanks to its sizable cost advantages and valuable intangible assets. American Express AXP also qualifies as a forever stock for Buffett. Amex’s closed-loop system benefits from high switching costs and the network effect, which fortify the company’s wide moat.



But neither Coke nor American Express look like buys today from Morningstar’s perspective. Both are fairly overvalued relative to our fair value estimates. Yet there is one Buffett forever stock that looks very undervalued to Morningstar today.



What stock is that? It’s Occidental Petroleum OXY. Berkshire owns more than 28% of the company’s outstanding shares. OXY is one of the world’s largest independent oil and gas producers. Buffett thinks the company’s leadership position in carbon capture initiatives could bear fruit, too. Morningstar doesn’t think OXY has carved out an economic moat, due largely to the expensive acquisition of Anadarko Petroleum in 2019, which dented OXY’s profitability. But management has been deleveraging the company’s balance sheet, and we think the books look better than they have in several years and that the company is on the cusp of consistently earning its cost of capital. The stock looks cheap today. We think OXY’s stock is worth $59 per share.



For more stock ideas, visit Morningstar.com.



Morningstar director Josh Aguilar provided the research behind this segment.



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