Some of Warren Buffett's stocks have been absolute stinkers. There, I said it. But I still think Buffett ranks as one of the greatest investors of all time and is a genuine national treasure.
I also believe that the Oracle of Omaha has quite a few winners in Berkshire Hathaway's (BRK.A 3.75%) (BRK.B 4.02%) portfolio as well. Here are three Buffett stocks that are especially worth buying right now.
1. Buffett's second-favorite stock: Apple
Everyone knows that Berkshire Hathaway itself ranks as Buffett's favorite stock. But his second-favorite is definitely Apple (AAPL 2.45%). Buffett has referred to the tech giant as "probably the best business I know in the world." With that kind of endorsement, it's no surprise that Apple is Berkshire's largest holding.
Some might think that Apple stock is near a nosebleed level with shares trading at 31 times expected earnings. However, my view is that there's plenty of room to run. I'm not alone: Wedbush analyst Daniel Ives thinks Apple could jump at least 27% over the next year and maybe even skyrocket over 60%.
Ives and I share the same bullish view about the prospects for iPhone demand. The "G" in 5G (which the new iPhone models support) could stand for ginormous instead of generation. I expect sales for iPhones and the ecosystem of services built around it will continue to soar.
As Steve Jobs used to say, there's also one more thing. I'm cautiously optimistic about Apple's plans for a self-driving car. The company is reportedly teaming up with Hyundai and Kia to manufacture the cars. Apple doesn't have to win a huge share of the self-driving car market to turbocharge its growth.
2. A great addition in 2020: Bristol Myers Squibb
I viewed the purchase of Bristol Myers Squibb (BMY 1.64%) shares as one of Berkshire's best additions to its portfolio last year. My take is that the big pharmaceutical stock has several things going for it.
For one thing, BMS is dirt cheap. Its shares trade at only eight times expected earnings. Granted, there's a reason behind this discount valuation. The company's blockbuster blood cancer drug Revlimid faces generic competition beginning in 2022.
However, BMS' lineup includes several other growth drivers. Blood thinner Eliquis, autoimmune disease drug Orencia, and cancer immunotherapies Opdivo and Yervoy have solid prospects. Newer drugs including Reblozyl and Zeposia should be rising stars for the company. So should just-approved cell therapy liso-cel and another promising pipeline candidate ide-cel.
As an added bonus, BMS offers an attractive dividend that currently yields more than 3%. I think this big pharma was a great pick for Buffett in 2020 and remains a great pick for investors now.
3. Charging ahead: Mastercard
Mastercard (MA 4.34%) isn't a new holding in Berkshire's portfolio. The fintech giant has been a big winner for Buffett for quite a while. I expect it to keep up its winning ways.
Of course, some might think that Mastercard looked like a loser based on its Q4 results. Net revenue and earnings fell year over year. The COVID-19 pandemic hurt travel spending, which caused Mastercard's cross-border volume to plunge 29%.
However, Mastercard should see its business rebound nicely as worries about COVID-19 subside. I'm hopeful that's exactly what will happen as more people across the world receive vaccinations over the next few months.
Over the longer term, Mastercard stands to benefit from the shift away from cash. I think it's one of the best growth stocks that Buffett owns.