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Top Stocks of the Forbes 400 Richest

James Altucher

09/25/07 - 06:42 AM EDT
Forbes magazine just released its Forbes 400 list, a rundown of the 400 richest individuals and families in the U.S. The question is, how can we invest on this list?

Obviously, many of these individuals made their fortunes by starting and running their own companies. If these companies are doing well and are publicly traded, then regular Joes like us have the opportunity to participate in the engines behind their wealth growth.

At Stockpickr we reviewed the list and culled the companies connected to the richest 20 Americans.

Microsoft(MSFT Quote), no surprise, makes the top of the list, as it has made the fortunes of some notable wealthy investors -- namely, Bill Gates, who is No. 1 on the Forbes 400 list with a net worth of $59 billion, Paul Allen at No. 11 and Steve Balmer, No. 16.

Microsoft recently dropped the price of its Xbox 360 game console in a move to take market share from Sony's(SNE Quote) PlayStation3. Microsoft has a price-to-earnings ratio price-to-earnings-ratio-p-e (P/E) of 19 and a P/E-to-growth ratio of 1.4. The tech company also pays a dividend of 1.5%.

Microsoft also appears in last week's list of the Top 10 Dividend Raisers by PEG, as it just increased its dividend by 10%. There, Microsoft keeps company with McDonald's(MCD Quote), which raised its dividend 50% and has a P/E of 32 and a PEG of 2.2. Another stock in the portfolio is Zenith National Insurance(ZNT Quote), which raised its dividend by 16% and has a P/E ratio of 6.

Next on the Stockpickr list is Warren Buffett's Berkshire Hathaway(BRK.A Quote). Buffett is No. 2 on Forbes' wealthiest list, with a net worth of $52 billion.

Berkshire, which already has a significant investment in railroads, recently reported that it purchased more options on Burlington Northern(BNI Quote) for almost 400,000 additional shares.

Berkshire's shares are trading not too far below their all-time high of $120,800, the most expensive shares -- in terms of dollar amount -- in the U.S. The stock has a P/E of 15.

Berkshire is part of Stockpickr's Stocks Over $100 portfolio, a list of such names as Toyota(TM Quote), which has a PEG of 1.4, and MasterCard(MA Quote), with a PEG of 1.7.

The third-wealthiest American, at a measly $28 billion net worth according to Forbes, is Sheldon Adelson, chairman, CEO and treasurer of Las Vegas Sands(LVS Quote), which is working on a large new resort in Macau. The stock has a P/E of 138 and a PEG of 2.4.

Las Vegas Sands is one of the holdings of the Vice Fund, which has generated an average annual return of more than 18%. The Vice Fund also owns Boeing(BA Quote), which has a PEG of 1.3, and International Game Technology(IGT Quote), which has a PEG of 1.9.

To see the rest of the companies connected to the richest 20 Americans, check out the Top Stocks of the Forbes 400 portfolio at Stockpickr.


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