Warren Buffett Stocks: Google Among 26 Names On This Screen

Google parent Alphabet (GOOGL), alongside other top AI firms, earns a spot on this screen emulating Warren Buffett stocks based on the investing strategy of the Berkshire Hathaway CEO. The search and artificial intelligence giant remains in buy range as it unveils the biggest update yet to its AI model.

Alone on this screen among the Magnificent Seven stocks, Google stock cleared a 139.42 buy point from a cup with handle at the end of last year. It currently trades near the top of its buy range.


Note that inclusion on this screen does not necessarily mean the Oracle of Omaha owns shares in these companies. Rather, it identifies stocks in sync with Buffett’s focus on sustainable earnings growth and other factors.

Other top tech and AI stocks joining Alphabet include Arista Networks (ANET), STMicroelectronics (STM), Epam Systems (EPAM), Globant (GLOB), Monolithic Power Systems (MPWR) and Lattice Semiconductor (LSCC).

Meanwhile, like Google, STM stock has built a cup with handle. The buy point is 51.27. STMicroelectronics has also tapped the AI boom with its work on Edge AI, as well as a collaboration with Nvidia (NVDA) on the STM32Cube. AI and Nvidia TAO Toolkit.

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Other notable names on this stock screen include fashionable firms ELF Beauty (ELF) and Lululemon Athletica (LULU).

Additionally, homebuilders PulteGroup (PHM), Lennar (LEN), Toll Brothers (TOL) and Taylor Morrison Home (TMHC) have also secured a spot on the list.

Energy sector firms Enerplus (ERF) and Daqo New Energy (DQ) have also powered their way onto this screen.

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Sustainable Earnings Growth In Focus

Canadian oil & gas exploration firm Enerplus tops the list with a sustainable earnings growth rate of 76%. (The rate is computed by multiplying the company’s ROE by the earnings retention ratio, which is the percentage of earnings not paid out as dividends.)

DQ stock, which has seen its Composite Rating drop to a far-from-sunny 19, still sports a 61% sustainable earnings growth rate.

This screen of Warren Buffett stocks showcases three other companies sporting a sustainable growth rate over 50%. Atkore (ATKR), Lattice Semiconductor and Sociedad Quimica (SQN) also hit that benchmark.

Google Stock In Sync With Warren Buffett Stocks

Since the Oracle of Omaha has never written a book detailing his investment strategy, there’s no definitive buying checklist. But parts of Buffett’s stock-picking strategy can be gleaned from the annual reports of Berkshire Hathaway (BRKB).

In addition to the annual reports, take a look at what’s inside Berkshire Hathaway’s portfolio to track Warren Buffett’s latest moves.

However, while the computer-generated stock screen below is not a list of companies necessarily owned by Buffett or Berkshire, it highlights Warren Buffett stocks like Alphabet and Lululemon in sync with Buffett’s focus on management quality and long-term growth.

Created in MarketSmith, the screen below emphasizes metrics to use when looking for companies with long-term past, and potential future, growth. To make the list, each stock must meet a wide range of criteria, including:

  • In the top 25% of all stocks in terms of five-year annual EPS growth rate.
  • 15% or greater sustainable earnings growth.
  • 12% or better five-year average return on equity.

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Warren Buffett Stocks: MarketSmith Screen

Screen created using MarketSmith data as of Jan. 19, 2024.

Company Symbol Sustainable Growth % ROE 5-Yr Avg Comp Rating EPS Rating RS Rating SMR Rating
Enerplus ERF 72 39.8 26 54 17 B
Daqo New Energy DQ 61 30.1 19 49 8 B
Atkore ATKR 56 78 86 79 82 B
Lattice Semiconductor LSCC 55 36.2 78 97 19 A
Sociedad Quimica SQM 51 36.2 22 61 11 B
Lululemon Athletica LULU 44 41.2 99 98 91 A
Nucor NUE 41 32.1 68 66 72 B
STMicroelectronics STM 34 22.1 66 89 41 A
Arista Networks ANET 33 26 99 98 97 A
Mueller Industries MLI 33 29.4 88 80 90 B
Axcelis Technologies ACLS 30 17.4 85 98 26 A
Old Dominion Freight Line ODFL 30 28.3 63 78 54 B
PulteGroup PHM 29 24.3 95 95 96 A
ExlService EXLS 28 21.9 85 97 58 A
Camtek CAMT 27 20.3 89 87 99 B
Boot Barn BOOT 25 23.3 59 78 22 B
E.L.F. Beauty ELF 25 23.6 98 98 98 A
Taylor Morrison Home TMHC 25 17.1 92 74 93 B
Epam Systems EPAM 24 20.6 92 88 82 B
Alphabet GOOGL 24 22 98 97 88 A
Monolithic Power Systems MPWR 23 29.3 93 82 93 B
Mosaic MOS 22 17 18 53 15 B
Commercial Metals CMC 21 23.4 69 74 64 C
Rush Enterprises A RUSHA 20 15.9 80 77 82 A
Toll Brothers TOL 20 17.6 94 87 95 B
Globant GLOB 15 14 99 96 92 A

IBD Stock Ratings Vs. The Oracle Of Omaha

IBD uses different criteria to build this screen emulating certain characteristics of Warren Buffett stocks than those Buffett generally uses. For example, ANET and LULU sport the highest-possible 99 Composite Rating. ELF and Google stock are just behind with a 98.

Many companies on the list do meet typical Warren Buffett criteria but do not meet some benchmarks that CAN SLIM investors seek in the other stock ratings that gauge a company’s fundamental, as well as technical, strength.

Ranging from 1 (worst) to 99 (best), the Composite Rating reveals how strongly a company is showing the seven telltale traits of winning stocks. For example, a rating of 95 means the company is outperforming 95% of all other stocks in terms of the most important fundamental and technical stock-picking criteria.

The EPS Rating tracks a company’s annual and quarterly earnings growth, then measures how its numbers stack up against those of all other stocks. So, just like the Composite Rating, a score of 95 means the company’s EPS growth is in the top 5% of all stocks.

Similarly, identifying stocks with strong fundamentals, the SMR Rating tracks sales growth, profit margins and return on equity as a whole. An A rating means the company is in the top 20% of all stocks in terms of those key fundamental performance metrics. Since it ties in with the legendary investor’s focus on a company’s fundamentals, this can be a particularly useful rating for investors looking for potential Warren Buffett stocks.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.


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