April showers bring May flowers, according to the old adage. But April also brings new opportunities for investors.
One place to look for ideas is in the holdings of one of the greatest investors of all time — Warren Buffett. You can find out which stocks the multibillionaire likes by checking out Berkshire Hathaway‘s (NYSE: BRK.A) (NYSE: BRK.B) portfolio. Some of those stocks are better picks now than others, so here are three Buffett stocks that are screaming buys in April (listed in alphabetical order).
1. Bank of America
Buffett has been a fan of bank stocks for years. Although his enthusiasm has cooled somewhat in recent years, he obviously still likes Bank of America (NYSE: BAC). It’s the second-largest position in Berkshire’s portfolio.
Shares of BofA plunged earlier this year in the aftermath of the crisis resulting from problems at multiple banks. Despite what could be the start of a rebound, the stock remains down more than 30% below its 52-week high.
Because of the sell-off, BofA trades at only 7.6 times expected earnings. I think this stock is a bargain at that valuation.
BofA’s balance sheet is strong. It’s one of several so-called “too big to fail” banks with plenty of liquidity. The company is also well positioned for the technological advances impacting the banking industry. It won’t surprise me one bit if we find out soon that Buffett added to Berkshire’s stake in BofA during the first quarter of 2022.
2. Occidental Petroleum
Occidental Petroleum (NYSE: OXY) arguably ranks as Buffett’s favorite oil stock these days. It’s currently the sixth-largest position in Berkshire’s portfolio. And the legendary investor continues to buy Occidental hand over fist.
One reason Buffett likes Occidental so much is its valuation. Shares of the oil producer trade at only 5 times expected earnings. That’s well below the 9.1 forward earnings multiple for the energy sector.
It’s possible that Occidental could enjoy a near-term boost if oil prices rise. That could easily happen with Russia and, potentially, OPEC reducing their oil production. As oil prices go, so goes Occidental’s share price. The company also has tremendous long-term opportunities with its carbon capture and sequestration efforts. Occidental believes this could be a multitrillion-dollar market over time.
Buffett is likely to buy a lot more Occidental shares going forward. Berkshire secured regulatory approval last year to acquire up to 50% of the company. It currently owns a 23.1% stake.
3. US Bancorp
BofA isn’t the only bank stock Buffett has held on to. Berkshire still maintains positions in several banks, including owning over eight million shares of US Bancorp (NYSE: USB). Granted, that’s far fewer shares than the conglomerate held in the past. However, I suspect Buffett will be glad he didn’t exit the position completely.
US Bancorp has been hit even harder than BofA by the banking crisis. The stock plunged more than 30% at one point this year. It’s still down close to 35% below the 52-week high.
But amidst the regional bank turmoil, US Bancorp is a bank stock you can confidently buy right now. It’s not one of the “too big to fail” banks. However, the company’s financial position is stronger than many of its peers.
US Bancorp’s recent acquisition of Union Bank expands its presence on the West Coast. The company also is an innovator in digital banking. Once the dust settles, this beaten-down stock should bounce back nicely.
10 stocks we like better than US Bancorp
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and US Bancorp wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of March 8, 2023
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Keith Speights has positions in Bank of America and Berkshire Hathaway. The Motley Fool has positions in and recommends Bank of America and Berkshire Hathaway. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
