4 Buffett No-Brainer stocks to buy with $ 500 in November

When you invest on Wall Street, patience pays off. Perhaps no investor has demonstrated how time can be a powerful ally that Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett.

Since taking office as CEO in 1965, the Oracle of Omaha has led Berkshire to an average annual return of 20% on the nose, through 2020. That may not sound like much nominally, but when we are looking at it as a whole until 2021 since the beginning of the year. earnings, this equates to an increase in Berkshire Class A shares (BRK.A) of nearly 3,500,000%. In other words, when Buffett buys or sells a stock, Wall Street and retail investors have very good reason to pay attention, given his track record.

Berkshire Hathaway’s portfolio currently has nearly four dozen holdings, many of which are profitable and proven. But in November, only a small handful stand out as screaming buys.

Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.

If you have $ 500 on hand, which won’t be needed for bills or to cover emergencies as they arise, the following four Buffett shares can be purchased hand-in-hand in November.

Bristol Myers Squibb

For income investors and value seekers, there is arguably no more attractive buy in Warren Buffett’s portfolio this month than pharmaceutical stocks. Bristol Myers Squibb (NYSE: BMY).

What makes Bristol Myers such an amazing company is its ability to leverage internal drug development with profit-generating acquisitions. For example, it worked with Pfizer to develop the oral anticoagulant Eliquis, which has become a drug capable of generating $ 10 billion in annual sales for Bristol Myers.

Even more exciting is the long-term potential of Opdivo cancer immunotherapy. Even though some of the wind has been cut from Opdivo’s sails following late disappointments in various lung cancer studies, the drug still has 10 approved indications and is being reviewed in dozens of other clinical trials. After making $ 7 billion in sales last year, the label’s expansion opportunities could eventually push Opdivo north of $ 10 billion in annual revenue.

Added to this organic growth is Bristol Myers’ monster takeover of cancer and immunology drug maker Celgene in late 2019. While the deal has brought a number of promising blockbusters to the fold, it is the drug against Revlimid multiple myeloma which is the price. Revlimid has increased year-over-year sales by a double-digit percentage dating back more than a decade, and appears to be on track to reach $ 13 billion in sales in 2021. Revlimid is protected against the onslaught of generic competitors until the end of January 2026, giving Bristol Myers at least four more years of insane cash flow.

Opportunistic investors can snatch this obviously valuable stock for less than 8 times Wall Street’s estimated earnings for the coming year, and will be rewarded with a dividend yield of 3.3% for their patience.

Ascending piles of generic drug pills sit on a messy pile of hundred dollar bills.

Image source: Getty Images.

Teva Pharmaceutical Industries

Now, if you are a value investor who doesn’t care so much about dividend income, the developer of branded and generic drugs Teva Pharmaceutical Industries (NYSE: TEVA) has all the makings of an obvious November purchase.

Without watering down, Teva had a miserable five-year run. We have seen a corruption settlement with the Justice Department, an executive rotation, a complete suspension of its dividend, and a mountain of litigation over the company’s role in the opioid crisis. All these factors, coupled with its debt following the acquisition of Actavis, threw a gray cloud over Teva. However, the sun is starting to shine in some places.

The key to Teva’s success lies with CEO Kare Schultz. Schultz is a turnaround specialist who, since taking over as Teva in late 2017, has helped cut annual operating expenses by billions. He also oversaw a reduction in net debt from over $ 34 billion at the end of 2017 to nearly $ 22 billion as of September 30, 2021.

Additionally, Schultz is looking for ways to remove legal overhang from Teva. Last week, the company won a lawsuit in California over its role in the opioid crisis; but Schultz is still hoping for a favorable national settlement that will put the issue in the rearview mirror. With the business focused on debt repayment, a settlement that provides drugs at reduced or no cost and with little or no cash penalty would be ideal.

Teva is also well positioned to take advantage of an aging America and rapidly rising brand name drug prices. As one of the largest producers of generic drugs in the world, its pricing power and volume is expected to improve over time.

At less than 4 times Wall Street’s estimated earnings per share in 2022, Teva looks like a bargain.

A person placing their credit card over a portable point of sale card reader.

Image source: Getty Images.

Visa and Mastercard

Don’t worry, growth investors, I haven’t forgotten you! The obvious third and fourth Buffett stocks to pick up for Q4 are the payment processors Visa (NYSE: V) and MasterCard (NYSE: MA). I chose to combine them in the same section for simplicity given the similarities in their operating model.

The beauty of Visa and Mastercard is that they allow patient investors to take advantage of the natural expansion of the US and global economy. While recessions are inevitably part of the business cycle, they typically only last a few months to a few quarters. By comparison, booms often last for years. In fact, the last economic expansion lasted 11 years in the United States. These long periods of economic growth encourage consumers and businesses to spend, which increases the income and profits of this dynamic duo.

It should be noted that Visa and Mastercard are the two most dominant players in the United States, the largest consumer market in the world. In 2018, Visa held a 53% share of the purchasing volume of the US credit card network, while Mastercard held 22%. Between the opportunities for organic organic growth and the ability to expand their infrastructure into emerging markets, there is a seemingly endless avenue of potential for both companies.

And did I mention that Visa and Mastercard stick strictly to the processing side of the equation? While some of their peers lend and are able to reap the rewards of interest and loan fees, these lenders are also exposed to potential defaults during an economic downturn. Since Visa and Mastercard don’t lend, neither company has to set aside cash to cover loan losses. This is what helps both companies rebound faster than most financials after a recession.

The two companies having notably reached their historic highs, the time has come for investors to strike.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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