Investing

These New Warren Buffett Stocks are Worth Checking Out in November

Joey Frenette

Published: November 21, 2024 12:55 pm

Warren Buffett’s Berkshire Hathaway (NYSE:BRK-B) has been quite the aggressive seller of stocks this year. The recent lack of buybacks and extreme level of profit-taking may make some investors nervous. And while Berkshire’s mountain of cash has only grown taller in recent quarters, it’s still noteworthy that Buffett has been buying something. Indeed, the recent 13F filing revealed some new buys, and while they are still dwarfed by the magnitude of selling Berkshire has made of late, I still find the new Buffett stocks to be noteworthy.

Indeed, any take Buffett or Berkshire make a new buy, there’s sure to be a large crowd itching to get into the stock upon the market’s opening. And while riding on Berkshire’s coattails while paying up a so-called “Buffett premium” to do so may not punch you a ticket to market-beating stock returns, I do think such moves are intriguing for Buffett followers. Further, if a new Buffett stock pulls back in the event of a market correction, perhaps there will be less of a Buffett premium.

As such, the following recent new buys of Berkshire are worth keeping tabs on or even stashing on your shopping list as we head into the holiday season.

Key Points About This Article

• Warren Buffett and Berkshire Hathaway haven’t just been selling. They’ve been buying a bit as well.
• Domino’s and Pool are two relatively small companies that look quite discounted.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Domino’s Pizza

I wasn’t all too surprised when it was announced that Berkshire started a position in the well-run pizza firm Domino’s Pizza (NYSE:DPZ). The quick-serve restaurant chain doesn’t just serve tasty pizzas; it has delivery down like few others in the industry. Further, Domino’s was also a former holding of another legendary billionaire investor, Bill Ackman (a man who some may refer to as “Baby Buffett”), who exited his position close to two years ago.

Either way, DPZ stock looks very interesting at these levels, even after spiking close to 8% during Thursday’s after-hours session when Wall Street learned of the news shortly after the market’s close. It’s been a tough slog for Domino’s stock so far this year, up around 5% (at least before the Buffett 13F filing came out).

So, what’s going on at Domino’s, and why has Berkshire taken a small slice (around 1.28 million shares)?

The company experienced a downward reset of sales expectations after clocking in a mediocre third quarter. Undoubtedly, a challenging macro was noted as the reason behind a downbeat sales forecast for the year.

In any case, DPZ stock fell back into a bear market, and the valuation, I believe, became too cheap for such a solid company. Even at north of 25 times forward price-to-earnings (P/E), the promising $15.1 billion pizza chain stands out as a great bargain as it looks to move on from a tough quarter. No wonder Berkshire picked up shares!

Pool Corp.

Pool Corp. (NASDAQ:POOL) is another unsurprising pick-up from Berkshire in the latest quarter. The stock has been punished and is still down close to 37% from its late-2021 all-time high. Indeed, pools and the equipment and supplies needed to maintain them are a pretty simple-to-understand and perhaps even wonderful business. Though I have no idea if the POOL stock purchase is a sign that tides are about to turn positive on housing, I am nonetheless intrigued by the new buy.

Like Domino’s, POOL stock popped on Thursday’s after-hours session, rising more than 6%. While the investment is rather small, I do view Pool as a terrific value for the type of wide-moat business you’re getting. The company stands to benefit from secular tailwinds in outdoor living and home improvement. Further, shares seem modestly priced at under 30 times forward P/E to go with a 1.37% yield.

Either way, POOL shares have not done anything for around two years now. As the economy picks up speed while rates fall, one has to think homeowners will have more to invest in home-related projects to increase their house’s selling price. In the case of pools, it’s arguably one of the most fun additions to any home.

Will it also be a fun investment? Only time will tell. Regardless, investors are sure to make waves in the stock following the Buffett buy news.