While the “Oracle (NYSE:) of Omaha’s” company underperformed the market last year, Berkshire Hathaway (NYSE:) (BRK.B) has rebounded in 2021. However, that doesn’t mean investors should run out and buy shares. Target (TGT), Foot Locker (NYSE:), and Williams-Sonoma (NYSE:) are three Buffet inspired stocks are better buys right now.With tech stocks leading the market last year, shares of Berkshire Hathaway (BRK.B) underperformed. The stock gained a paltry 2.4% in 2020, compared with a 16.3% gain for the S&P 500. But this year, the BRK.B has performed much better, up 18% so far year to date. While investors might think it’s time to jump into BRK.B, there are better options.
While things are improving for Warren Buffet’s company, BRK.B has a Neutral Rating in our POWR Ratings system. Investors would be better off with stocks that fit his philosophy and are rated a Strong Buy or Buy in our POWR Ratings system. To find these stocks, I used the investment strategy outlined in Buffettology, a book written by Buffett’s ex-daughter-in-law, Mary Buffett.
These stocks have a 10-year track record of generally increasing EPS, long-term debt not more than five times annual earnings, average ROE over the past ten years of at least 15%, average ROIC over the last ten years of at least 12%, and earnings yield higher than the long-term Treasury yield. When we filter for stocks with Buy ratings or higher, we get companies such as Target Corporation (NYSE:), Foot Locker, Inc. (FL), and Williams-Sonoma, Inc. (WSM).
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