Credit card company American Express has slowly — and deservedly — worked its way into becoming one of Berkshire Hathaway’s most important positions.
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If you’re ever in need of a new stock pick, you can always borrow an idea or two from Berkshire Hathaway‘s (NYSE: BRK.A)(NYSE: BRK.B) portfolio of holdings hand-picked by Warren Buffett himself. And you should. Given enough time, Berkshire shares consistently outperform the broad market largely due to the conglomerate’s investments in publicly traded companies.
Not every Berkshire Hathaway holding is always a great buy, however. Sometimes they’re trading at too steep of a valuation for newcomers, and other times, they’ve just turned into clunkers.
With that as the backdrop, here’s a closer look at two Warren Buffett stocks you can feel good about buying today, but one name you might want to avoid until something big changes for the better.
Image source: The Motley Fool.
Many investors don’t realize that — through the attrition of other holdings as well as its own growth — credit card outfit American Express (NYSE: AXP) is now Berkshire Hathaway’s second-biggest stock holding, accounting for 17% of the outfit’s portfolio of publicly traded equities. Underscoring this bullishness is the fact that Berkshire also holds stakes in Visa and Mastercard, but has chosen to only hold much smaller positions in both.
Then again, it’s not difficult to see what the Oracle of Omaha has seen in AmEx since first establishing the position back in the 1990s. It’s not just a payment middleman like the aforementioned Mastercard and Visa. It operates an entire consumerism ecosystem, serving as the card issuer as well as the payment…
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