Warren Buffett has garnered a reputation as a legendary investor for his long-term value investing strategy. Value investing involves targeting securities that are fundamentally underpriced compared to their intrinsic value. Buffett has built his fortune by consistently targeting high-quality securities that meet those specifications. Moreover, Buffett has sought out companies that he has thoroughly researched and firmly believes in. Today, I want to look at two stocks that Warren Buffett owns or has owned that I’d look to snatch up today. Moreover, I want to look at one more stock that has the Buffett connection but I’d avoid right now. Let’s jump in.
Here’s a previously Buffett-owned Canadian energy stock I’m still stacking up on this summer
Back in 2021, Warren Buffett divested his portfolio of the remainder of his Canadian securities. Suncor Energy (TSX:SU) was one of the last holdouts. This Calgary-based integrated energy company has seen its stock jump 9.9% month over month as of early afternoon trading on August 10. That has pushed shares of Suncor into positive territory so far in 2023.
Investors can expect to see Suncor’s second batch of fiscal 2023 results on August 14. In the first quarter (Q1) of fiscal 2023, the company reported total upstream production of 742,100 barrels of oil equivalent per day (boe/d) – up from 766,100 boe/d in the previous year. Moreover, it reported adjusted operating earnings of $1.8 billion compared to $2.8 billion in Q1 2022.
Shares of this energy stock currently possess a very favourable price-to-earnings ratio of 7.1. Moreover, Suncor offers a quarterly dividend of $0.52 per share. That represents a very solid 4.8% yield.
Buffett may have sold this stock, but I’m still bullish on its prospects
Restaurant Brands (TSX:QSR) is another Canadian stock that was previously in Warren Buffett’s portfolio. He sold his shares of RBI back in the summer of 2020. At the time, the restaurant industry was reeling from the impacts of the COVID-19 pandemic. This Toronto-based quick-service restaurant company operates in North America and several worldwide locations. Its shares have climbed 12% in the year-to-date period.
The company unveiled its second quarter (Q2) fiscal 2023 earnings on August 8. RBI reported consolidated comparable sales growth of 9.6% and net restaurant growth of 4.1%. EBITDA stands for earnings before interest, taxes, depreciation, and amortization, aiming to give a better picture of a company’s profitability. In Q2, RBI reported adjusted EBITDA of $665 million – up 10% compared to Q2 2022.
RBI is geared up for strong earnings growth as its three main brands are all delivering impressive sales in recent months. The stock also offers a quarterly distribution of $0.55, which represents a 2.9% yield.
This is one Buffett-owned equity that I’m avoiding in August
Barrick Gold (TSX:ABX) is another Canadian stock that Warren Buffett recently retreated from. This Toronto-based company is engaged in the exploration, mine development, production, and sale of gold and copper properties. Shares of this gold stock have dropped 7.8% so far in 2023. The stock is still up 6.5% year over year.
In Q2 2023, Barrick Gold reported a realized gold price of $1,972 compared to $1,861 in the previous year. However, adjusted net earnings still fell to $336 million compared to $419 million in Q2 2022. Gold and silver prices have delivered solid momentum as investors have increasingly lost faith in the U.S. dollar. Gold may very well reward its faithful in the months ahead, but I’m more inclined to avoid its volatility in 2023.
