Warren Buffett isn’t just the greatest investor of our time: he’s one of the best investment teachers of all-time.
Whether you’re a new investor seeking to enter the markets for the first time or a seasoned investor looking to improve their skills further, it literally pays dividends to listen to Buffett and the words of wisdom he shares with the world for free.
There are a tonne of Buffett tenets that many Buffettarians (disciples of Buffett) incorporate into their own investment philosophy. With a wealth of Buffett books out there that can help you invest and become more like the man they call the Oracle of Omaha, I’m not going to reivew any specific teachings from Buffett in this piece.
Rather, I’m going to show you two TSX stocks that I believe are a great start for those looking to invest just like Buffett. So, if you’ve got patience and a genuinely long-term time horizon, then you have what it takes to invest like Buffett, consider the following attractively-valued gems:
Leon’s Furniture
Leon’s Furniture (TSX: LNF) is a “boring” Canadian stock that trades in the depths of the TSX. The business of furniture sales is dull, but that’s precisely how Buffett likes his businesses: simple, easy-to-understand businesses that lie within one’s circle of competence.
Through Berkshire Hathaway, Buffett gets furniture exposure from Nebraska Furniture Mart, a local furnishing store that receives a lot of love around the time of the Berkshire Hathaway shareholder meetings in Omaha.
Leon’s has been under a considerable amount of pressure over the years, thanks in part to the rise of e-commerce-leveraging furniture and home-goods companies.
While buying large big-ticket items online makes sense to many, ultimately, I do believe that it makes more sense to try such items out before purchasing, even with attractive no-string-attached return policies.
At the time of writing, Leon’s is one of the cheapest stocks out there at 11 times forward earnings, 6.6 times EV/EBITDA, and 0.5 times sales. The stock sports a nice dividend that’s just shy of the 4% mark, making the name a dirt-cheap income play.
IA Financial
IA Financial (TSX: IAG) is a highly underrated insurer that I’ve been pounding the table on over the past year. The stock was unsustainably undervalued, but has since corrected to the upside, with shares soaring over 62% from their December lows to make a new all-time high.
Berkshire isn’t just an investment fund run by the Oracle of Omaha. It’s an insurer at heart, but more important, it’s an insurer with an impeccable underwriting track record.
IA Financial is one of the best insurers on the TSX. In prior pieces, I praised IA for its “aura of conservative practices.” I also highlighted the fact that investors haven’t been giving the stock the respect it deserved due to the lower-than-average dividend yield, the result of management’s move to not overextend itself like many of its peers.
“Management knows that the insurance and financial services businesses can be fickle in times of economic recession, so they’re just playing it safe by maintaining a higher degree of financial flexibility. That’s a shrewd decision if you ask me.” I wrote in a prior piece.
Fast forward to today and the stock now trades at 10 times next year’s expected earnings and 0.48 times sales. While it’s certainly not the steal of a few months ago, it’s still a cheap bet that could continue to pay out big dividends.
Stay hungry. Stay Foolish.
