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Warren Buffett's 4 Favorite Stocks for 2016

The Oracle of Omaha made some large purchases heading into 2016 and it looks like he s pivoting his investments into safe dividend stocks. Plus, many of these stocks are now available for even cheaper than what Buffett paid back in the fourth quarter of 2015.

Warren Buffett has been having a tough go of late. His biggest bets have been in decline over the last year. This includes all his big name holdings in American Express (NYSE: AXP), International Business Machines (NYSE: IBM), Wells Fargo (NYSE: WFC), Wal-Mart (NYSE: WMT) and USB (NYSE: USB) which are all down more than 10% over the last year. This has pushed Buffett s Berkshire Hathaway (NYSE: BRK-A) down 11% in the last year, underperforming the S&P 500.

Berkshire also lagged in 2015; in fact, it lagged the S&P 500 by the most since 2009. As it is, Buffett appears to be shaking up his portfolio and making a flight to safety. Warren Buffett s annual letter came out on Saturday. In it, as always, he offers a lot of wisdom and insight. However, one thing he won t tell you is how he s positioning himself for a rocky year.

Still, we ve combed through his portfolio to find what Buffett was buying in the fourth quarter. Here are the four stocks that Buffett s buying:

Buffett s Biggest Buy No.

1: Wells Fargo

BWarren Buffett's 4 Favorite Stocks For 2016uffett added, ever so slightly, to his Wells Fargo position last quarter buying over 9 million shares. It remains his largest holding and has been a core position for decades. Buffett s buy comes as Wells Fargo has been a laggard of late. Shares are already down 12% in 2016.

However, it s now offering a 3.25% dividend yield and its business will strengthen with rising interest rates and improved credit quality. Its dominant position gives it quite the advantage. However, there are growth opportunities, with Wells Fargo looking into smaller branches that are half the size and cost. As Wells Fargo is less focused on the volatile capital markets and more on credit cards and core banking.

Buffett s Biggest Buy No.

2: Deere & Co. (NYSE: DE)

Warren Buffett's 4 Favorite Stocks For 2016He has been upping his Deere & Co. stake nicely. He bought up almost 6 million shares last quarter, increasing his stake by 34%. Buffett has been a Deere owner since 2012.

Deere is down 14% over the last year and is now offering a dividend yield above 3%. It s a big bet on the fact that the world will continue to eat, plus the idea that protein consumption will rise in emerging markets. This would spur the demand for Deere s agriculture equipment, where Deere generates over 80% of its sales. It s also becoming more of a bet on growth markets like Brazil, Russia, India, and China. This comes as Deere is building its dealer network in these areas. It also has a financial services business that remains resilient.

Buffett s Biggest Buy No.

3: Liberty Global Inc. (NASDAQ: LBTYA)

Warren Buffett's 4 Favorite Stocks For 2016Buffett added 600,000 shares to its Liberty Global position during the fourth quarter. This comes as shares of the media conglomerate are down 30% for the last twelve months.

Despite the weakness, the company is still a diversified play on international cable. The company, ran by dealmaker John Malone, has been buying and selling assets to best position the company. It formed a joint venture recently with Vodafone for its Dutch assets. Already the largest cable operator in Europe, the goal is to expand its broadband customer base and footprint.

Related: How to earn $5,179.80 in extra income by Tax Day (April 15th).1

Buffett s Biggest Buy No.

4: Axalta Coating Systems (NASDAQ: AXTA)

Warren Buffett's 4 Favorite Stocks For 2016This is one of Buffett s mid-cap stock picks. He bought up roughly 125,000 shares last quarter and first bought into Axalta during the second quarter of 2015. Axalta is a $6 billion market cap paints company for the transportation industry. It s a bet that the car market will continue to grow, which goes hand-in-hand with Buffett s investment in the largest private auto dealership last year.

Axalta operates in the high-margin auto refinish business, which is a key part of the auto repair market that can grow even with a weak economy. But, more interesting is that Buffett could be using this as a way to play the Asian and Latin American markets. Axalta is leveraged to the growing fleets of new cars and refinish demand in these countries. Axalta wins regardless of which automakers take the most market share there. In the end, it appears that Buffett is buying up more of his safe picks, perhaps looking to position his portfolio for a rough 2016.

He added four stocks to his portfolio last quarter, all of which look to be bets that the economy will continue to weaken this year. Finding stable companies that regularly increase their dividends is the strategy Warren Buffett uses himself to produce superior results, no matter if the market moves up or down in the shorter term. The combination of a high yield and regular dividend growth is what has given him consistent gains throughout his decades-long investing career. And, there are currently over twenty of these stocks to choose from in the Monthly Paycheck Dividend Calendar2, an income system used by thousands of dividend investors enjoying a steady stream of cash.

The Monthly Dividend Paycheck Calendar3 is set up to make sure you receive a minimum of 5 paychecks per month and in some months 8, 9, even 12 paychecks per month from stable, reliable stocks with high yields.

If you join the calendar by Friday, March 4th you will have the opportunity to claim an extra $5,179.80 in dividend payouts by Tax Day (April 15th).4

The Calendar tells you when you need to own the stock when to expect your next payout, and how much you can make from stable, low-risk stocks paying upwards of 12%, 13%, even 15% in the case of one of them. I ve done all the research and hard work; you just have to pick the stocks and how much you want to get paid.

The next critical date is Friday, March 4th (it s closer than you think!), so you ll want to take action before that date to make sure you don t miss out.

This time, we re gearing up for an extra $5,179.80 in payouts by April 15th, but only if you re on the list before the 4th. Click here to find out more about this unique, easy way of collecting monthly dividends.5

References

  1. ^ How to earn $5,179.80 in extra income by Tax Day (April 15th). (www.investorsalley.com)
  2. ^ Monthly Paycheck Dividend Calendar (www.investorsalley.com)
  3. ^ The Monthly Dividend Paycheck Calendar (www.investorsalley.com)
  4. ^ an extra $5,179.80 in dividend payouts by Tax Day (April 15th). (www.investorsalley.com)
  5. ^ Click here to find out more about this unique, easy way of collecting monthly dividends. (www.investorsalley.com)