Investing like Warren Buffett doesn't mean you have to copy his moves. Instead, you just have to think like him and apply his investing principles. Buffett values simplicity and predictability. And that's precisely why the three stocks listed here could all be good fits for his portfolio. But even if they don't end up in Berkshire Hathaway's portfolio one day, they can still be great options for you to consider holding on to for the long haul.
Microsoft(NASDAQ: MSFT), Uber Technologies (NYSE: UBER), and Enbridge (NYSE: ENB)have tremendous businesses and while none of them are in Berkshire's portfolio today, here is why they could be excellent investments to consider loading up on right now.
Image source: Getty Images.
1. Microsoft
If not for Buffett's close relationship with Microsoft's co-founder Bill Gates, it seems a safe bet that Microsoft would already be a staple in Berkshire's portfolio. The business has excellent fundamentals and possesses a strong brand, which makes it difficult for companies to take market share from it.
Businesses around the world rely on Microsoft's software to conduct their day-to-day operations. It has been looking to artificial intelligence (AI) recently to enhance its growth prospects by offering AI-powered computers and upgrading its software capabilities.
CEO Satya Nadella says that "cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth." And with Microsoft focusing heavily on those two areas, there's little doubt about its ability to continue to grow along with the businesses that it serves.
In the trailing 12 months, Microsoft has generated more than $270 billion in sales. And of that, just under $97 billion was profit -- for an impressive margin of 36%. Microsoft's strong earnings and solid growth prospects make it a prototypical Buffett stock to own.
2. Uber Technologies
Buffett isn't big on investing in the latest tech, but if he was, Uber is a growth stock I believe he'd be buying. What's appealing about Uber is that it is an asset-light business. The value is in its app, which allows people to use their own vehicles as taxis to make money. Uber isn't in the business of making and maintaining a fleet of vehicles, and that can allow for healthy margins.
Over its past four quarters, the company's net income was north of $12 billion, which was about 27% of its top line ($45 billion). Just four years ago, in 2021, this was a company whose sales totaled less than $18 billion and which struggled with profitability. But with tremendous growth across the world and ride-sharing taking off in popularity, Uber has been scaling its operations at a fast and impressive pace.
While some investors are concerned that driverless vehicles could steal market share from Uber in the future, the reality is they could make for ideal partners by working together. Uber and Alphabet-owned Waymo have partnered together on the self-driving car's rollout in new cities this year.
Uber should tick off a lot of checkmarks for Buffett fans as this looks to be a no-brainer buy for the long haul.
3. Enbridge
Buffett is a fan of the energy sector, and a couple of Berkshire's top holdings are in oil and gas -- Chevron and Occidental Petroleum. The billionaire investor isn't going to own every single oil and gas stock, but he's clearly bullish on this area of the market. One company that would fit in well with those companies is Enbridge, which has a knack for consistency and reliability.
What stands out to me is how well the company hits its numbers. In February, Enbridge released its year-end numbers, where it pointed out that it met its financial guidance for a 19th straight year. The Canadian-based pipeline company has a lot of visibility into its earnings as it relies on long-term contracts, which reduce risk for investors.
For the next couple of years, the company is projecting between 4% and 6% growth in its adjusted earnings per share, which will help lead to more increases to its dividend. Enbridge has raised its payout for 30 consecutive years, and although Buffett may not like the idea of Berkshire paying dividends, he certainly loves collecting them from his investments.
Should you invest $1,000 in Microsoft right now?
Before you buy stock in Microsoft, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Microsoft wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider whenNetflixmade this list on December 17, 2004... if you invested $1,000 at the time of our recommendation,you’d have $598,613!* Or when Nvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,you’d have $753,878!*
Now, it’s worth notingStock Advisor’s total average return is922% — a market-crushing outperformance compared to169%for the S&P 500. Don’t miss out on the latest top 10 list, available when you joinStock Advisor.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Berkshire Hathaway, Chevron, Enbridge, Microsoft, and Uber Technologies. The Motley Fool recommends Occidental Petroleum and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
