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Warren Buffett Stocks: GOOGL Among 46 Names On This Screen

IBD Long-Term Leader Cadence Design Systems (CDNS) and Monolithic Power Systems (MPWR) join Lululemon Athletica (LULU) and Google parent Alphabet (GOOGL) on this screen of Warren Buffett stocks, based on the investing strategy of the Berkshire Hathaway CEO.


Highlighting Warren Buffett Stocks

Including GOOGL stock, CDNS and MPWR, which has returned to the IBD Long-Term Leaders watchlist, 46 companies make this stock screen.

Building materials manufacturer Atkore (ATKR) tops the list with an impressive sustainable earnings growth rate of 90%. (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.)

Meanwhile, including Atkore, Builders FirstSource (BLDR) and Steel Dynamics (STLD), six companies on this screen had sustainable growth rates above 50%. Pool (POOL), Cross Country Healthcare (CCRN) and solar energy play Daqo New Energy (DQ) also earned that distinction.

Lululemon and Nucor (NUE) both just miss that distinction with a 44% sustainable growth rate. LULU stock gapped up in huge volume after reporting earnings on Tuesday.

Meanwhile, Reliance Steel (RS) and Brazilian steel producer Gerdau (GGB)  join NUE and STLD stock in forging a spot on this screen of Warren Buffett stocks.

Retail stocks Boot Barn (BOOT) and Buckle (BKE) find shelf space on the list alongside Lululemon.

Led by D.R. Horton (DHI), homebuilders have fabricated a strong presence on this screen. PulteGroup (PHM), Lennar (LEN), Meritage Homes (MTH), and Tri Pointe Homes (TPH) also make the screen.

GOOGL Joins Tech Names Among 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).

The list below highlights Warren Buffett stocks like Alphabet, Cadence Design Systems and Monolithic Power Systems in sync with Buffett’s focus on management quality and long-term growth.

Additionally, reflecting improvement in the tech sector following the trouncing it took in last year’s bear market, the screen also picks up a number of other tech names. The latest list of Warren Buffett stocks also includes STMicroelectronics (STM), Super Micro Computer (SMCI), PTC (PTC), Epam Systems (EPAM) and Chinese online gaming platform NetEase (NTES).

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 March 29

Company Symbol Sustainable Growth % ROE 5-Yr Avg Comp Rating EPS Rating RS Rating SMR Rating
Atkore ATKR 90 72.1 94 92 96 A
Builders FirstSource BLDR 63 45.1 94 97 96 A
Daqo New Energy DQ 62 22.6 89 99 74 A
Steel Dynamics STLD 54 38.4 93 82 94 B
Cross Country Healthcare CCRN 52 27.4 50 82 48 B
Pool POOL 50 60.4 67 86 41 B
Lululemon Athletica LULU 44 36.9 97 97 74 A
Nucor NUE 44 32 89 67 90 B
Cadence Design Systems CDNS 43 36.1 98 97 93 A
Mueller Industries MLI 40 29.4 91 88 92 B
Clearfield CLFD 39 22.7 42 99 6 A
Boot Barn BOOT 38 26.4 81 75 85 B
Winnebago Industries WGO 36 26.6 82 64 80 B
Old Dominion Freight Line ODFL 34 28.3 95 97 91 A
STMicroelectronics STM 34 22.1 98 98 95 A
Commercial Metals CMC 33 23.7 91 93 86 A
Expeditors Intl of Washington EXPD 33 36.2 85 83 74 B
D.R. Horton DHI 32 25.8 94 91 92 B
Monolithic Power Systems MPWR 30 29.3 99 99 92 A
PulteGroup PHM 30 21.4 98 99 95 A
Evercore EVR 28 45.7 79 57 84 C
Meritage Homes MTH 28 21 99 97 96 A
UFP Industries UFPI 27 22.4 75 93 70 B
Saia SAIA 26 18.7 94 91 94 A
PTC PTC 25 22.6 90 92 84 A
Regeneron Pharmaceuticals REGN 25 35 87 66 91 B
Reliance Steel RS 25 19.6 91 81 95 B
Super Micro Computer SMCI 25 23.4 99 99 99 A
EPAM Systems EPAM 24 20.6 60 95 25 A
Alphabet GOOGL 24 22 77 73 53 B
West Pharmaceutical Svcs WST 24 22.5 93 83 92 B
Perion Network PERI 23 15.7 98 98 98 A
Shutterstock SSTK 23 25.5 92 97 92 A
Westlake WLK 23 17.4 74 50 85 B
Gerdau GGB 22 15.7 84 79 62 B
Tri Pointe Homes TPH 22 16.7 98 97 95 B
Lennar LEN 21 17.3 96 87 92 B
NetEase NTES 21 21.7 88 88 86 B
Diamondback Energy FANG 17 16.4 76 96 58 A
Quanta Services PWR 17 14.5 93 94 91 B
Buckle BKE 16 53.3 79 83 62 A
Danaher DHR 16 14.7 56 89 33 B
Triton International TRTN 16 19.4 79 90 58 A
United Microelectron UMC 16 12.1 95 93 92 A
Globant GLOB 15 14.4 69 98 20 A
Lab Corp. of America LH 15 21.3 45 63 36 C

Warren Buffett Stocks In Demand By Top Funds

The latest list of new buys by the best mutual funds features several names also highlighted in this screen of Warren Buffett stocks.

On the tech side, Cadence Design Systems, Monolithic Power Systems and STMicroelectronics make both lists.

Also, from the building sector, Atkore, Builders FirstSource, Meritage Homes, and PulteGroup all make the cut.

IBD Stock Ratings Vs. The Oracle Of Omaha

IBD uses different criteria than those used for this list of Warren Buffett stocks. MPWR and SMCI, for example, score the highest-possible 99 Composite Rating. The rating means the stock is outpacing 99% of all companies in terms of key stock-picking traits. Cadence Design Systems (98) and LULU stock (97) earn very strong ratings in IBD Stock Checkup.

As GOOGL stock continues to rebound following all the carnage in the tech sector last year, its Composite Rating has improved to 77.

Including Alphabet, 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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