The battle between short-sellers and retail investors has captured the attention of the investing world over the past two weeks. Warren Buffett, one of the most accomplished investors over the last century, has always maintained that he would not pursue a short-selling strategy. However, you can just about guarantee that he would never seek the chase a mania like we saw with GameStop in late January.
What sectors is the Oracle of Omaha looking at in early 2021? Today, I want to look at one stock that Buffett would want to buy and hold for decades.
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Warren Buffett: What is he buying and selling right now?
Warren Buffett has been ferociously opposed to cryptocurrencies when asked about their prospects. He has consistently recommended that investors look to blue-chip stocks over an alternative asset like gold or silver. However, Buffett surprised onlookers when Berkshire Hathaway added a $500 million stake in Barrick Gold back in the summer.
The love affair with gold did not last. In Q3 2020, Berkshire revealed that it had shed over 40% of its stake in the top gold producer. Warren Buffett turned his attention to another exciting sector in the second half of 2020.
Why Buffett is going into healthcare
For years, Warren Buffett has teased that he was looking for his spot in the pharmaceutical space. In 2020, Berkshire pulled the trigger on some top names in the healthcare sector. This came right ahead of the largest vaccine rollout that we have seen in the modern era. Berkshire added shares in Pfizer, Merck, and others in the vaccine race.
Back in December, I’d discussed why vaccine investment options were sparse for Canadians here at home. Indeed, Canada’s inability to break out as a vaccine producer has spurred anger and frustration. Canada has fallen behind many of its international peers in the race to vaccinate its citizens.
One TSX stock to snag in this space
Canadians should look to Warren Buffett’s moves as a guide to target some top equities on the TSX. VieMed Healthcare (TSX:VMD)(NASDAQ:VMD) is still one of my favourites in the healthcare space. This company provides in-home durable medical equipment and healthcare solutions to its clients in the United States. Shares of VieMed have climbed 77% year over year as of mid-morning trading on February 3.
Investors can expect to see VieMed’s fourth-quarter and full-year 2020 results in a few weeks. In Q3 2020, the company projected that its revenues and earnings would continue to see a multi-million-dollar boost due to the ongoing pandemic. Gross profit in the year-to-date period rose to $60.9 million — up from $41.7 million in the prior year.
Warren Buffett has been a vocal value investor over the course of his career. He seeks to invest in equities that are trading for less than their intrinsic value. Shares of VieMed possess a favourable price-to-earnings ratio of 14. It is worth jumping back into VieMed ahead of its last batch of earnings.
