When this week started, I’d discussed why Warren Buffett’s recent moves may telegraph a coming storm. In the third quarter, Buffett’s company Berkshire Hathaway continued to sell stake in top bank stocks like Wells Fargo and JPMorgan. Meanwhile, it jacked up its stake in Pfizer and others who are in the thick of the COVID-19 vaccine race. The vaccine is gearing up to be the most lucrative in history, and it has proven that it will have a tremendous impact on the broader market.
Today, I want to look at three ways Canadians can emulate Warren Buffett’s investing strategy in late November.
Warren Buffett: Get in on the healthcare sector
Warren Buffett is seeking exposure to healthcare companies in the vaccine with good reason. Canada does not have a TSX-listed company in the race, but there are still quality healthcare stocks worth your attention. In the above article, I’d focused on exciting stocks like WELL Health and VieMed Healthcare. Both companies have reported record revenues largely due to conditions created by the pandemic. You can emulate Warren Buffett’s new strategy by adding these stocks.
Jamieson Wellness (TSX: JWEL) is a nutrition and supplements company that has garnered increased interest during the COVID-19 pandemic. Its shares have climbed 37% in 2020 as of close on November 19. However, the stock is down 14% month over month. In Q3 2020, Jamieson reported revenue growth of 19.2% to $105.6 million. Adjusted EBITDA increased 18.2% to $22.9 million.
The company achieved strong growth in all major segments. It posted 82% growth in its international business with consumers around the world flocking to supplements due to a renewed focus on personal health.
Canadians should also look to Savaria stock. This company designs, engineers, and manufactures products for personal mobility in North America and around the world. Its shares have dropped 1.2% in 2020. However, the personal mobility sector is positioned for big growth for the long-term. This is largely due to an aging population which is leading to growing demand.
Seek value in a volatile environment
Warren Buffett is one of the most prominent value investing advocates in the world. Value investors look for securities with prices that are trading below their intrinsic worth. Buffett hunts for quality companies that fit this mold.
Scotiabank (TSX: BNS)(NYSE: BNS) is a top Canadian bank stock that fits in this framework. Its shares have dropped 9.2% in 2020. However, the stock has climbed nearly 13% month over month. Fortunately, it still offers nice value as we look ahead to its looming Q4 2020 results.
Shares of Scotiabank last possessed a price-to-earnings ratio of 11 and a price-to-book value of 1.2. That puts Scotiabank in favourable value territory. It is one of the heavy hitters among its peers when it comes to income. This bank stock last paid out a quarterly dividend of $0.90 per share. That represents a strong 5.7% yield. Of course, Scotiabank also possesses a fantastic balance sheet.
Warren Buffett: Distance yourself from gold
Berkshire Hathaway added $500 million worth of Barrick Gold stock in the summer. At the time, the spot price of gold has soared to record levels. It reached above $2,000/ounce but has since retreated in the fall. Gold was trading at roughly $1,860 per ounce at the time of this writing. Meanwhile, shares of Barrick Gold are down 17% over the past three months.
Warren Buffett’s company shed over 40% of its Barrick Gold stake in the previous quarter. The loss of momentum for the yellow metal may be driving Buffett away. Canadian investors should also look for other opportunities. Silver looked like the better value play in the late summer and still has some potential for those looking for a hedge against the broader market.
The Oracle of Omaha has historically strayed from gold. However, he has even more disdain for digital currencies like bitcoin. That leaves out cryptos for those looking to emulate Warren Buffett right now.
