3 Warren Buffett Stocks That Are Smart Buys Now

Warren Buffett, popularly known as the “Oracle of Omaha,” is one of the most successful and admired investors of all time. With a net worth of $148.30 billion, Buffett has built his fortune by investing in high-quality businesses with strong fundamentals and long-term growth potential.

Given his track record, it’s no surprise that some of his stock holdings present compelling investment opportunities right now. In this article, we’ll take a closer look at three fundamentally sound stocks from Berkshire’s portfolio: Visa Inc. (V), VeriSign, Inc. (VRSN), and DaVita Inc. (DVA), which are poised to deliver robust returns over the long term.

Buffett’s strategy focuses on identifying companies with durable competitive advantages, solid financials, and the ability to compound value over time. Berkshire Hathaway’s (BRK.A) portfolio is packed with well-established companies that have consistently delivered strong returns.

The conglomerate itself is one of the world’s most closely watched investment firms, with a market capitalization of more than $1 trillion. Its Class A shares, being the most expensive stocks, are currently trading at $714,869 per share. As a result, many investors closely follow Buffett’s stock picks, eager to replicate his proven strategy of compounding wealth.

With that in mind, let’s evaluate the fundamental aspects of the above-mentioned stocks in detail:

Visa Inc. (V)

V is a leading payment technology company that facilitates digital payments among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. The company offers its products and services under Visa, Visa Electron, Interlink, VPAY, and PLUS brands. It is currently the 17th largest holding in Berkshire’s massive $300 billion portfolio.

On December 19, 2024, the company acquired Featurespace, an AI-driven payments protection firm, to strengthen its fraud prevention capabilities. This integration will enhance Visa’s risk-scoring and fraud detection services, providing real-time protection against financial crimes while ensuring a seamless user experience.

V’s trailing 12-month gross profit margin of 97.82% is 66.5% higher than the 58.74% industry average. Likewise, its 54.27% trailing-12-month net income margin is 142.8% higher than the 22.35% industry average. Furthermore, its trailing-12-month ROCE of 52.19% is considerably higher than the industry average of 10.35%.

During the first quarter (ended December 31, 2024), V’s net revenue increased 10.1% year-over-year to $9.51 billion. Its operating income amounted to $6.23 billion, indicating a 4.7% growth from the prior year quarter. The company’s non-GAAP net income and EPS came in at $5.46 billion and $2.75, up 10.6% and 14.1% year-over-year, respectively.

Street expects V’s revenue for the second quarter (ending March 2025) to increase 8.8% year-over-year to $9.55 billion. Its EPS for the same period is expected to grow 6.8% from the prior year to $2.68. Moreover, it topped the consensus EPS estimates in each of the trailing four quarters, which is excellent.

The stock has surged 34.6% over the past six months to close the last trading session at $347.48.

V’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

V has a B grade for Momentum, Stability, Sentiment, and Quality. It is ranked #7 out of 48 stocks in the Consumer Financial Services industry. Click here to see the additional V ratings for Growth and Value.

VeriSign, Inc. (VRSN)

VRSN provides domain name registry services and internet infrastructure that enables internet navigation for various recognized domain names. The company ensures the security, stability, and resiliency of internet infrastructure and services. As of Q4 2024, Buffett holds a 14% stake in VRSN, owning 13.3 million shares valued at approximately $2.7 billion.

VRSN's trailing 12-month gross profit margin of 87.58% is 74.3% higher than the industry average of 50.25%. Likewise, its trailing 12-month EBIT and net income margins of 68.12% and 55.69% compare favorably to their respective industry averages of 5.60% and 4.14%.

VRSN’s revenues for the fourth quarter ended December 31, 2024, increased 3.9% year-over-year to $395.40 million. The company’s operating income grew 2.9% from the year-ago value to $263.80 million. Meanwhile, its net income and EPS for the quarter came in at $191.50 million and $2, respectively. Also, its cash flow from operating activities increased 5.7% year-over-year to $902.60 million.

Analysts expect VRSN’s EPS and revenue for the first quarter ending March 2025 to increase 8.3% and 3.2% year-over-year to $2.08 and $396.52 million, respectively. It surpassed the consensus revenue estimates in each of the trailing four quarters.

Over the past nine months, the stock has gained 30.4%, closing the last trading session at $220.18.

VRSN’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which translates to a Buy in our proprietary rating system.

It has an A grade for Quality and a B for Sentiment. Within the Internet – Services industry, it is ranked #7 out of 25 stocks. To see VRSN’s ratings for Growth, Value, Momentum, and Stability, click here.

DaVita Inc. (DVA)

DVA provides kidney dialysis services for patients with chronic kidney failure. The company operates various kidney dialysis centers and offers related lab services in outpatient dialysis centers. In addition, it provides outpatient, hospital inpatient, and home-based hemodialysis services and disease management services. Buffett owns a 44% stake in DVA.

DVA’s trailing 12-month net income margin of 6.53% compares to the negative industry average of 4.38%. In addition, its trailing-12-month EBIT and levered FCF margins of 15.10% and 8.80% are considerably higher than their respective industry averages of 2.71% and 2.53%.

For the third quarter of 2024, which ended on September 30, DVA’s total revenues increased 4.6% year-over-year to $3.26 billion. Its operating income grew 7.8% from the year-ago value to $534.88 million, while its attributable net income and EPS for the quarter amounted to $214.69 billion and $2.50, respectively. Also, its free cash flow came in at $555 million, up 22.5% year-over-year.

The consensus revenue estimate of $3.27 billion for the fiscal fourth quarter (ending December 2024) represents a 3.8% increase year-over-year. The consensus EPS estimate of $2.15 for the same period indicates a 14.8% improvement year-over-year. The company has an impressive surprise history; it surpassed the consensus revenue estimates in each of the trailing four quarters.

Shares of DVA have gained 53.5% over the past year and 15.1% year-to-date to close the last trading session at $172.07.

It is no surprise that DVA has an overall rating of B, which translates to a Buy in our proprietary rating system. It also has a B grade for Quality and is ranked #13 among 63 stocks in the Medical – Services industry.

Beyond what we’ve stated above, we’ve also rated DVA for Growth, Value, Momentum, Stability, and Sentiment. Get all DVA ratings here.

What To Do Next?

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V shares were trading at $347.80 per share on Friday afternoon, up $0.32 (+0.09%). Year-to-date, V has gained 10.05%, versus a 2.63% rise in the benchmark S&P 500 index during the same period.

Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.

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