Warren Buffett Stocks: Meta, GOOGL Among 25 Names On This Screen

Estimated read time 5 min read


While the recent bear market has mauled tech stocks, Alphabet (GOOGL) and Meta Platforms (FB) (formerly known as Facebook) maintain their spots on this screen of Warren Buffett stocks based on the investing strategy of the Berkshire Hathaway CEO.




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In addition to GOOGL and FB, retailers Williams-Sonoma (WSM), Sprouts Farmers Market (SFM), Five Below (FIVE), The Container Store (TCS), One-800Flowers.com (FLWS), and Boot Barn (BOOT) also make this stock screen.

Steel Dynamics (STLD) tops the list with a sustainable earnings growth rate of 59%. (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.)

Fellow steel stocks Nucor (NUE) and Reliance Steel & Aluminum (RS) have also forged a spot among the 25 names featured on this stock screen.

Homebuilders D.R. Horton (DHI), Green Brick Partners (GRBK) and Pulte Group (PHM) join decking materials firm Trex (TREX) on the list.

Along with Meta and GOOGL stock, Monolithic Power Systems (MPWR) and Epam Systems (EPAM) have also found a spot on this screen for Warren Buffett stocks even with the market taking its toll on the tech sector.

With their track records of sustainable growth, Monolithic Power Systems and GOOGL stock also earn a spot on IBD Long-Term Leaders, fitting many of the parameters of 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 his stock-picking strategy can be gleaned from the annual reports of Berkshire Hathaway (BRKB).

Highlighting Warren Buffett Stocks

The list below highlights Warren Buffett stocks like Alphabet, Nucor and Steel Dynamics that are in sync with his focus on management quality and long-term growth.

Looking at the closely watched Berkshire Hathaway portfolio, Buffett and his team exited Merck (MRK) in Q3 of 2021, but opened a new position in the Keytruda cancer-drug maker in Q1.

Berkshire also added to top holding Apple (AAPL) in Q1. The conglomerate also grew its stake in Chevron (CVX) and placed a big bet on Occidental Petroleum (OXY), perhaps with expectations for oil prices to stay elevated.

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:

  • Top 25% of all stocks in terms of five-year annual EPS growth rate.
  • 15% or greater sustainable earnings growth.
  • 12% or better 5-year average return on equity.

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Warren Buffett Stocks: MarketSmith Screen

Screen created using MarketSmith | Data as of June 10, 2022

Company Symbol Sustainable Growth % ROE 5-Yr Avg Comp Rating EPS Rating RS Rating SMR Rating
Steel Dynamics Inc STLD 59 30.3 97 98 93 A
Evercore Inc EVR 56 51.2 62 92 37 A
Williams Sonoma WSM 56 45.6 53 95 27 A
Daqo New Energy DQ 52 17 97 98 93 A
Nucor NUE 51 25.4 92 98 87 A
Quidelortho QDEL 47 40.3 61 92 35 A
Boot Barn Holdings BOOT 38 19.6 75 99 67 A
Trex TREX 38 34.2 66 98 19 A
Meta Platforms META 31 25.2 41 74 21 B
Winnebago Industries WGO 30 22.9 59 96 26 A
D.R. Horton DHI 29 22.9 71 99 33 A
Alphabet GOOGL 29 20.3 67 95 39 A
West Pharmaceutical Svcs WST 29 20.6 67 94 28 A
Five Below FIVE 28 20.7 52 74 26 B
One-800Flowers.com FLWS 27 18.2 17 60 8 C
Sprouts Farmers Market SFM 27 27 73 82 50 D
Green Brick Partners GRBK 25 16.6 92 99 75 A
Pulte Group PHM 25 21.4 85 98 47 A
Epam Systems EPAM 24 20 86 98 75 A
Monolithic Power Systems MPWR 23 25.8 97 98 88 A
Saia SAIA 23 16.1 67 99 30 A
Reliance Steel & Aluminum RS 22 15.5 97 98 92 A
The Container Store Grp TCS 21 13.1 38 64 23 B
Axon Enterprise AXON 17 12.9 51 90 20 A
Danaher DHR 16 13 89 90 59 A

Rating Potential Oracle Of Omaha Stocks

While using different criteria than that used for this list of Warren Buffett stocks, Daqo New Energy (DQ), for example, scores a 97 Composite Rating, as does Steel Dynamics. Epam’s 86 Composite Rating means it is outpacing 86% of all companies in terms of key stock-picking traits.

After plummeting earlier this month on earnings, FB stock has seen its Composite Rating in Stock Checkup fall to 41. GOOGL stock has slipped to a 67 rating.

Including FB and GOOGL stock, many companies on the list do meet typical Warren Buffett criteria, but do not meet some benchmarks CAN SLIM investors typically look for in the other IBD SmartSelect 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.

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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