Warren Buffett Stocks: Google Among 26 Names On This Screen

After disappearing from this list last month, Google parent Alphabet (GOOGL) has bounced back onto this screen emulating Warren Buffett stocks based on the investing strategy of the Berkshire Hathaway CEO. The search and artificial intelligence leader continues to rebound from a post-earnings gap down that yanked GOOGL stock below its 50-day moving average in massive volume.

In recent days, Alphabet shaken off Wall Street’s concerns surrounding cloud growth, lifting it back above its 50-day line. Showing its strength as one the Magnificent Seven stocks, it is also looking to retake its 21-day exponential moving average.




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While still facing their own set of troubles induced by the Federal Reserve and geopolitical turmoil, Arista Networks (ANET), Lululemon Athletica (LULU) and STMicroelectronics (STM) remain on this screen highlighting 26 stocks.

Note that inclusion on this screen does not necessarily mean the Oracle of Omaha owns shares in these companies. Rather, it identifies stocks in sync with Buffett’s focus on sustainable earnings growth and other factors.

After the market indexes flashed a follow-through day on Nov. 1 to spark a new uptrend, other notable names on this screen for Warren Buffett stocks include Daqo New Energy (DQ), Nucor (NUE), Super Micro Computer (SMCI), Old Dominion Freight Line (ODFL), Boot Barn (BOOT) and Diamondback Energy (FANG).

Monolithic Power Systems (MPWR), Axcelis Technologies (ACLS) and Onto Innovation (ONTO) join STM stock on the list from the semiconductor sector. Other tech names include Synopsys (SNPS) and Epam Systems (EPAM).

Homebuilders PulteGroup (PHM), Lennar (LEN) and Taylor Morrison Home (TMHC) have also built a spot on the list.


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Sustainable Earnings Growth In Focus

Canadian oil & gas exploration firm Enerplus (ERF) has replaced solar energy firm Daqo New Energy as the top name on the list with a sustainable earnings growth rate of 76%. (The rate is computed by multiplying the company’s ROE by the earnings retention ratio, which is the percentage of earnings not paid out as dividends.)

DQ stock, which has seen its Composite Rating drop to a far-from-sunny 31, still sports a 61% sustainable earnings growth rate.

In addition to Enerplus and Daqo, this screen of Warren Buffett stocks showcases five companies sporting a sustainable growth rate over 40%. Lululemon, Nucor (NUE), ANET and SMCI stock also hit that benchmark.

GOOGL, LULU Among Those In Sync With Warren Buffett Stocks

Since the Oracle of Omaha has never written a book detailing his investment strategy, there’s no definitive buying checklist. But parts of Buffett’s stock-picking strategy can be gleaned from the annual reports of Berkshire Hathaway (BRKB).

In Q2, Berkshire opened positions in Lennar and D.R. Horton (DHI), as well as NVR (NVR), for the first time. The company just reported Q3 earnings, surprising Wall Street to the upside as its insurance business — Geico in particular — delivered again.

To track Warren Buffett’s latest moves, take a look at what’s inside Berkshire Hathaway’s portfolio.

While the computer-generated stock screen below is not a list of companies necessarily owned by Buffett or Berkshire, it highlights Warren Buffett stocks like Alphabet and Lululemon in sync with Buffett’s focus on management quality and long-term growth.

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

  • In the top 25% of all stocks in terms of five-year annual EPS growth rate.
  • 15% or greater sustainable earnings growth.
  • 12% or better five-year average return on equity.

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Warren Buffett Stocks: MarketSmith Screen

Screen created using MarketSmith data as of Nov. 21, 2023.

Company Symbol Sustainable Growth % ROE 5-Yr Avg Comp Rating EPS Rating RS Rating SMR Rating
Enerplus ERF 76 39.8 59 54 46 B
Daqo New Energy DQ 61 30.1 31 49 13 B
Lululemon Athletica LULU 44 37.8 98 98 90 A
Nucor NUE 43 32.1 73 65 56 B
Super Micro Computer SMCI 40 25.3 99 91 99 A
Mueller Industries MLI 35 29.4 82 80 85 B
STMicroelectronics STM 34 22.1 78 89 68 A
Arista Networks ANET 33 26 98 97 96 A
Old Dominion Freight Line ODFL 32 28.3 85 78 89 B
Axcelis Technologies ACLS 30 17.4 88 98 74 A
PulteGroup PHM 30 24.3 93 95 97 A
ExlService EXLS 28 21.9 71 97 27 A
Monolithic Power Systems MPWR 28 29.3 88 82 91 B
Synopsys SNPS 26 20.8 98 95 96 A
Boot Barn Holdings BOOT 25 23.3 70 78 34 B
ELF Beauty ELF 25 23.6 97 98 95 A
Taylor Morrison Home TMHC 25 17.1 81 75 90 B
EPAM Systems EPAM 24 20.6 71 88 36 B
Alphabet GOOGL 24 22 97 97 92 A
ICL Group ICL 24 23 28 46 17 B
Perion Network PERI 23 15.7 75 99 30 A
Commercial Metals CMC 22 21.8 48 75 24 C
Lennar LEN 20 17.3 87 72 93 B
Diamondback Energy FANG 18 16.4 83 67 84 B
Onto Innovation ONTO 18 12.1 79 67 96 B
Gerdau GGB 16 20.7 60 56 36 C

IBD Stock Ratings Vs. The Oracle Of Omaha

IBD uses different criteria to build this screen emulating certain characteristics of Warren Buffett stocks than those Buffett generally uses. For example, SMCI sports the highest-possible 99 Composite Rating, while Lululemon and ANET stock are just behind with a 98. Showing strength after its post-earnings sell-off, Google stock continues to hold a strong 97 Composite Rating.

Many companies on the list do meet typical Warren Buffett criteria but do not meet some benchmarks that CAN SLIM investors seek in the other stock ratings that gauge a company’s fundamental, as well as technical, strength.

Ranging from 1 (worst) to 99 (best), the Composite Rating reveals how strongly a company is showing the seven telltale traits of winning stocks. For example, a rating of 95 means the company is outperforming 95% of all other stocks in terms of the most important fundamental and technical stock-picking criteria.

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

Similarly, identifying stocks with strong fundamentals, the SMR Rating 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 those key fundamental performance metrics. Since it ties in with the legendary investor’s focus on a company’s fundamentals, this can be a particularly useful rating for investors looking for potential Warren Buffett stocks.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.

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