Saturday, October 12, 2013

Searching for Bargains from Warren Buffett's Portfolio

Stocks have moved a long way in five years, making it a challenge for the world’s best living investor to find undervalued situations. “[Stocks] are probably more or less fairly priced now. We don’t find bargains around,”Warren Buffett told CNBC last week. “But we don’t think things are way overvalued either. We’re having a hard time finding things to buy.” 

Perhaps Buffett will elect to purchase more of some of his current holdings. One such current holdings is Coke [KO]. Buffett has a 9% stake, or 400 million shares, which comprises 18% of his portfolio and makes him the company’s top shareholder. Buffett appeared at Coke’s annual meeting in April and said he would “never sell a share of Coke stock.” Coke shares have declined 2% over the past year, to a price of $37.77 on Thursday, which is 6.1% above their 52-week low of $35.58. Coke has recorded annual revenue growth of 10.9% and annual EBITDA growth of 9.6% rates over the past 10 years, and 13.8% and 9% respectively over the past five years. 

With the decline in price, Coke has also caught the attention of another value investor. David Winters, CEO of Wintergreen Advisors, explains why Coca-Cola is his favorite stock in the U.S. “You can get rich if you’re patient” he says in the video below.

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