As 2024 winds down, investors continue to look to Warren Buffett’s legendary investment philosophy for guidance, rooted in value and long-term growth.
Despite Berkshire Hathaway (NYSE: BRK.A, BRK.B) making headlines for reducing significant stakes in Apple (NASDAQ: AAPL) and Bank of America (NYSE: BAC), the core of Buffett’s strategy remains steadfast, identifying and holding onto “forever” stocks.
With the fourth quarter edging to a close against a backdrop of economic uncertainty, two standout equities from Buffett’s portfolio present compelling opportunities for investors seeking stable and attractive returns.
Picks for you
Among his holdings, Pool Corporation (NASDAQ: POOL) and Coca-Cola (NYSE: KO) emerge as prime candidates for long-term growth heading into 2025.
Pool Corporation (NASDAQ: POOL) stock
Pool Corporation has been a noteworthy addition to Buffett’s portfolio. Although the stock has underperformed the broader market in 2024 with a year-to-date (YTD) decline of 2.85%, recent developments suggest a turnaround may be on the horizon.
The company’s Q3 earnings report, released on October 24, exceeded expectations, sparking a 7.6% surge in the stock. This rally was driven by robust private-label chemical sales and consistent demand for essential maintenance products, even as overall sales dipped 3% year-over-year due to a slowdown in pool construction.
Notably, Pool maintained a steady gross margin of 29.1% and delivered adjusted earnings per share (EPS) of $3.27, surpassing Wall Street forecasts by 3.5%.
Buffett’s confidence in Pool’s long-term potential is reflected in his purchase of 404,057 shares valued at $152 million as of September 30, 2024. Even with a slight decline in valuation to $146 million by mid-November, the investment seems well-timed.
Currently trading at $377, POOL has gained 3% over the past five days and 4% over the last month, suggesting momentum is building.
With innovative initiatives like its Pool360 technology and a focus on essential product demand, Pool Corporation positions itself as a promising recovery play for 2025.
Coca-Cola (NYSE: KO) stock
Coca-Cola, a stalwart in Buffett’s portfolio, continues to deliver stability and growth. With a 3.03% dividend yield and an unmatched 62-year streak of consecutive dividend increases, the company remains a go-to option for income-seeking investors.
However, near-term challenges persist. Coca-Cola’s latest earnings report highlighted a decline in unit case volumes and a reliance on price hikes to drive revenue growth. Additionally, the strengthening U.S. dollar presents a currency risk, given Coca-Cola’s significant international exposure.
Despite these hurdles, the company’s forward price-to-earnings (P/E) ratio suggests it remains attractively valued, making it an appealing choice during market dips.
Currently trading at $64, Coca-Cola’s stock has dropped 1.8% over the past month but has posted a modest 1.8% gain over six months. While short-term volatility is likely, Coca-Cola’s strong balance sheet and proven resilience solidify its reputation as a reliable long-term investment.
As investors gear up for 2025, these two stocks stand out as the best examples of Buffett’s enduring investment approach, finding value, betting on longevity, and holding for the long haul.
For risk-averse investors, directly investing in Berkshire Hathaway stock could also provide diversified exposure to these and other Buffett picks.
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