Warren Buffett Stocks: MSFT, GOOGL Among 26 Names on This Screen


As the recent bear market has shredded technology stocks, IBD Long-Term Leaders Alphabet (GOOGL), Microsoft (MSFT), Monolithic Energy Systems (MPWR) and Cadence Design Systems (CDNS) retain their spot on this Warren Buffett stock screen, which is based on the investment strategy of Berkshire Hathaway’s CEO.


In addition to GOOGL, MSFT, CDNS and MPWR from the tech sector, retail stocks Lululemon Athletica (LULU) and boots shed (BOOT) also create this stock screen with 26 companies.

Steel dynamics (STLD) tops the list with sustainable earnings growth of 59%. (The rate is calculated by multiplying the company’s ROE by the profit retention ratio, which is the percentage of earnings that are not paid out as dividends.)

Colleague steel stock Nucor (NUE) has also forged a position on the list.

Playing solar energy Daqo New Energy (DQ), seen in the Sept. 9 IBD stock analysis before it was sold as market indices fell again, also makes the list with sustainable growth of 52%.

Homebuilders DR Horton (DHI), PulteGroup (PHM), Green Brick Partners (GRBK) and Lennar (LEN) joins patio materials company Trex (TREX) on the screen.

Since the Oracle of Omaha has never written a book detailing its investment strategy, there is no definitive buying checklist. But parts of its stock selection strategy can be gleaned from the annual reports of Berkshire Hathaway (BRKB).

Highlighting Warren Buffett Shares

The list below highlights Warren Buffett stocks such as Microsoft, Alphabet, Lululemon, Daqo New Energy, Cadence Design Systems and Steel Dynamics that are in sync with its focus on management quality and long-term growth.

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Looking at the closely monitored Berkshire Hathaway portfolio, Buffett and his team added to the top spot Apple (AAPL) in the second quarter. The conglomerate also increased its interests in Chevron (CVX) and Occidental Petroleum (OXY).

Created in MarketSmith, the screen below focuses on metrics to use when looking for companies with long-term past growth and potential future growth. To be on the list, each stock must meet a variety of criteria, including:

  • Top 25% of all stocks in terms of annual EPS growth every five years.
  • sustainable earnings growth of 15% or more.
  • 12% or better over five years average return on equity.

Build your watchlist with the IBD stock screener

Warren Buffett Stocks: MarketSmith Screen

Screen made with MarketSmith | Data as of September 23, 2022

Company Symbol Sustainable Growth % ROE 5-Yr Gem Comp Rating EPS rating RS Rating SMR assessment
Steel dynamics STLD 59 30.3 90 98 91 A
Evercore EVR 55 51.2 54 83 27 B
Daqo New Energy DQ 52 17 98 99 75 A
Nucor NUE 52 25.4 74 97 72 A
QuidelOrtho QDEL 46 40 65 99 15 A
Expeditors International EXPD 40 31.5 61 95 33 A
Kulicke & Soffa Industries KLIC 39 22.8 55 91 28 A
boots shed BOOT 38 21.7 62 92 15 A
Lululemon Athletica LULU 38 33.8 90 97 63 A
Trex TREX 38 34.2 58 98 13 A
Cadence Design Systems CDNS 35 33.5 95 97 79 A
Microsoft MSFT 33 36.2 59 91 40 A
Winnebago Industries WHO 30 23 92 97 68 A
DR Horton DHIA 29 22.9 81 99 57 A
Alphabet GOOGL 29 20.3 52 89 28 A
Old Dominion Freight Line ODFL 27 22.8 77 98 43 A
copart CPRT 26 28.2 80 92 40 A
Green Brick Partners GRBK 25 16.6 92 99 86 A
PulteGroup PHM 25 21.4 75 99 48 A
Meridian Bioscience VIVO 25 20 90 83 97 B
Epam Systems EPAM 24 20 89 96 65 A
Monolithic Energy Systems MPWR 23 25.8 71 99 40 A
saia SAIA 23 16.1 74 99 33 A
Lennar LEN 18 14.7 84 99 63 A
Triton International TRTN 18 16.6 89 96 89 A
danaher DHR 16 13 87 91 65 A
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Assessing Potential Oracle Of Omaha Stocks

For example, while using criteria other than those for this list of Warren Buffett stocks, DQ scores a Composite Rating of 98. Lululemon earns a rating of 90, meaning it outperforms 90% of all companies in key stock-selection characteristics.

GOOGL stocks currently have a composite rating of 52 in stock control.

Including Microsoft and Alphabet, many of the companies on the list meet Warren Buffett’s typical criteria, but fail certain benchmarks that CAN SLIM investors look for in the other stock ratings that measure a company’s fundamental and technical strength.

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The Composite Rating, ranging from 1 (worst) to 99 (best), shows how strongly a company displays the seven characteristics of winning stocks. For example, a rating of 95 means the company outperforms 95% of all other stocks in key fundamental and technical criteria for stock selection.

The EPS Rating tracks a company’s annual and quarterly earnings growth, then measures how the numbers compare to those of all other stocks. So like the Composite Rating, a score of 95 means the company’s EPS growth is in the top 5% of all stocks.

The SMR Rating identifies stocks with strong fundamentals and 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 these fundamental performance metrics. Because it ties in with the legendary investor’s focus on a company’s fundamentals, this can be a particularly helpful review for investors looking for potential Warren Buffett stock.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.

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