This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Stocks Warren Buffett Loves

Investors shouldn't ignore the fact that Deere owns its own captive finance arm, not unlike many car companies. The key difference is the fact that the machines financed through Deere are substantially bigger-ticket, and they're the lifeblood of commercial farming operations. That's helped keep defaults lower than many analysts expected in the wake of the Great Recession. And now, Deere's finance unit is another major ace in its pocket: in this environment, the firm has access to exceedingly cheap capital, and it should be able to stoke the growth fires as a result.

As Deere expands its international reach, the firm should be able to turn out impressive growth numbers. That growth isn't priced into shares right now.

Precision Castparts

The business may be boring at Precision Castparts (PCP - Get Report), but Berkshire Hathaway is proof positive that boring stocks can produce some truly exciting returns. PCP manufactures metal castings and fasteners for aerospace and industrial customers, churning out everything from the rivets used on assembly lines to the structural castings that give jet engines their strength. Berkshire Hathaway initiated a position of 1.25 million shares of PCP in the latest quarter, buying up a stake worth $204 million right now.

Even though Precision Castparts may not have the houshold name status of Deere, this metal products firm is every bit as dominant in its key markets. PCP's jet engine components, for instance, are used by every major turbine manufacturer on the market -- that lack of competition is a big defense for PCP's income statement. With orders for more efficient next-generation commercial aircraft on the upswing, orders should continue to climb for PCP over the foreseeable future. The firm's scale is also important. Because PCP is bigger than competitors in the forged metal business, its able to produce larger single pieces than many other firms are capable of making.

Cost is critical for PCP's success, but most of the firm's capital expenditures are modest at this point, and much of the capital-intense parts of the business are already paid for. On the balance sheet, Precision Castparts is essentially debt-neutral, with cash and investments offsetting the firm's relatively small debt load. A deal announced this month to acquire Titanium Metals (TIE) for $2.9 billion should dramatically increase PCP's capabilities in supplying its customers with titanium products, an important metal in the aerospace business.

2 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
DE $88.89 0.57%
GM $35.89 0.84%
MEG $17.00 0.77%
PCP $202.58 1.00%
WBC $128.89 2.20%

Markets

DOW 18,130.19 +50.05 0.28%
S&P 500 2,121.66 +3.97 0.19%
NASDAQ 5,103.3630 +11.2780 0.22%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs