Warren Buffett’s investment portfolio continues to be a point of interest for investors seeking new opportunities. His strategy has consistently outperformed the market, making his choice of stocks a potentially beneficial starting point for enhancing a portfolio.
Currently, two stocks within Buffett’s portfolio stand out as compelling investments.
Consider This Established Blue Chip Stock
Buffett acquired shares of Visa (NYSE: V) in 2011 at approximately $40 per share. Despite the company’s current valuation exceeding $250 per share, Buffett has retained his holdings, even in the wake of a recent antitrust lawsuit filed by U.S. regulators. Visa operates one of the largest payment processing networks globally, where scale is crucial. This network facilitates smooth and instant transactions with minimal errors across billions of nodes.
As of the last quarter, Visa maintained over 4 billion active credit and debit cards, processing more than $3 trillion in payment volume over the last year. According to Statista, Visa has more market control than its three closest competitors combined. The company’s dominance in the industry is attributable to natural market dynamics, despite facing lawsuits over the years. After a recent share price correction due to the lawsuit concerns, Visa’s stocks are trading at about 25 times forward earnings. This presents an attractive opportunity for a profitable company with significant brand recognition and economic leverage, bolstered by Buffett’s direct investment.
While short-term risks exist, the current conditions suggest a favorable entry for investors willing to navigate near-term volatility.
Embrace Growth with This Fintech Leader
For those seeking growth opportunities, fintech stocks offer a promising avenue. These companies combine rapid growth rates with expansive financial markets, enabling substantial growth potential.
Nu Holdings (NYSE: NU), a fintech company, attracted Buffett’s interest with an investment in 2021, now valued at around $1.4 billion. Operating in several Latin American countries, Nu Holdings started in Brazil a decade ago and has expanded into Mexico and Colombia. The company delivers financial services directly to consumers via smartphones, bypassing traditional bank branches.
Since its inception in 2013, Nu Holdings has gained significant traction, with over half of Brazilian adults as customers. This success indicates the company’s capacity for swift market penetration and expansion. Given that Latin America’s population exceeds 600 million, Nu Holdings’ growth potential remains robust for the foreseeable future.
Despite a $60 billion market cap, Nu Holdings continues to achieve revenue growth surpassing 50% year over year, alongside maintaining profitability. Its shares currently trade at 31 times forward earnings. Though Buffett was an early investor, this valuation suggests there is still an opportunity for others to invest in this high-potential fintech company.
