So, TheStreet's top minds in the newsroom uncovered several names for Buffett to consider spending $116 billion on. You're welcome, Warren.
Nelson Wang, Tech Editor
First of all, it's important to note that it's unlikely Buffett would make an outright acquisition of a tech company now, given his well-known avoidance of the sector until recently, and his current concerns about how highly-valued many companies are today. But if he did have to buy one, one possibility might be VeriSign (VRSN) - Get Report , the domain registrar that Berkshire already owns 13% of through its common stock.
As our tech columnist Eric Jhonsa pointed out, VeriSign (current market cap: $11.4 billion), along with Berkshire's other current tech holdings Apple (AAPL) - Get Report and Verisk (VRSK) - Get Report , has seen its free cash flow rise impressively over time, and its long-term contracts with customers gives its revenues plenty of predictability. On the flip side, though, VeriSign is by no means cheap, having appreciated about 50% in 2017, and it now sports a trailing price-to-earnings ratio of almost 32 times.
Still, if Buffett wanted to roll the dice and use up a little-over a tenth of Berkshire's current massive cash hoard to buy the rest of VerSign, the tech firm would seem to be a pretty good choice.
Michelle Lodge, Consumer Editor
Bright spots in retail do exist, and one company that Warren Buffett and his Berkshire Hathaway Inc. may look to is the off-price TJX Companies, Inc. (TJX) - Get Report , which reports fourth-quarter and full-year earnings on Wednesday, Feb. 28.
The Framingham, Mass.-based retailer, whose banners are TJMaxx, Marshall's, HomeGoods, HomeSense and Sierra Trading Post, is the leader in the off-price sector, with more than 4,000 stores in nine countries. It also has an experienced management team, including president and CEO Ernie Hermann, who has more than two decades at the company. TJ Maxx's merchandise buyers have long been considered its secret weapon (and competitive advantage) due to their extensive industry relationships.
Further, with the stock lagging the S&P 500 for more than a year, it's cheaper relative to historical norms.
While other retailers like Macy's Inc. (M) - Get Report , Sears Holdings Corp. (SHLD) and J.C. Penney Company Inc. (JCP) - Get Report have been closing stores, TJ Maxx has been building its stable across its various brands. With a market cap of $50 billion, Buffett could easily pay a 25% premium to become the off-price retail king and still have money left to burn.
Anders Keitz, Reporter
Using Berkshire's acquisition criteria, Bryan Adams, director of FactSet M&A, screened for companies that could be likely acquisition targets, even though attempting to read the mind of an Oracle can be a dubious task. Adams' screen includes some well-known Buffett favorites as consistent earnings power and high returns on equity.
In July 2017, Adams identified eight companies that meet Buffett's standards, including L'Oreal SA (LRLCY) which has been identified by TheStreet's sister publication, The Deal, as a takeover target.
The other acquisition targets Adams mentioned were Adidas AG (ADDYY) , BlackRock Inc. (BLK) - Get Report , Cognizant Technology Solutions Corp. (CTSH) - Get Report , Henkel AG & Co. (HENKY) , Nike Inc. (NKE) - Get Report , Public Storage (PSA) - Get Report and SAP SE (SAPGF) .
Actelion Ltd. was on Adams' initial 12-company list, but he eliminated it because it was too expensive on a relative basis as were Charles Schwab Corp. (SCHW) - Get Report Intuitive Surgical Inc. (ISRG) - Get Report and VMware Inc. (VMW) - Get Report , he said. Notably, Actelion was acquired by Johnson & Johnson (JNJ) - Get Report in a $30 billion all-cash deal in Nov. 2017.