Please ensure Javascript is enabled for purposes of website accessibility

3 Warren Buffett Stocks I'd Buy in December Without Any Hesitation

By Keith Speights – Dec 2, 2021 at 5:52AM

Key Points

  • Amazon is poised for record holiday sales and has multiple long-term growth drivers.
  • Apple should continue to profit from the iPhone supercycle.
  • Mastercard might face short-term tailwinds but has a huge opportunity in e-commerce.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

All three should be surefire winners over the long term.

Warren Buffett isn't as big of a winner as he once was. The legendary investor routinely beat the S&P 500's performance throughout much of his career. So far this year, though, Berkshire Hathaway's (BRK.A -0.64%) (BRK.B -0.45%) gains are lagging behind the index.

Many of the stocks in Berkshire's portfolio have generated strong year-to-date returns, but not all of them. Regardless of how they've performed recently, some Berkshire holdings remain especially attractive over the long term. Here are three Buffett stocks I'd buy in December without any reservations.

Warren Buffett with people in the background.

Image source: The Motley Fool.

1. (AMZN 0.01%) belongs in the group of Buffett's laggards. Shares of the internet giant have risen only around 8% this year, well behind Berkshire's overall performance. However, there are few stocks of large companies that have as clear of a growth runway as Amazon does.

Let's start with the near term. Amazon expects record holiday sales in the fourth quarter of $135 billion. Twelve-digit quarterly revenue has become standard fare for the company. Amazon is investing heavily in adding capacity to support its fulfillment operations. That's an obvious sign that the company anticipates significant growth in the future.

This isn't a surprise. E-commerce sales in the U.S. made up only 13% of total retail sales in the third quarter. Amazon still has a huge growth opportunity in this core market. 

But e-commerce is just one growth driver for the company. Amazon Web Services remains the biggest cloud hosting business in the world and continues to grow rapidly. The company's advertising business is picking up major momentum. Amazon's healthcare moves in online pharmacy and telehealth could also pay off nicely. I don't see this stock staying a laggard for very long.

2. Apple

Not all of the FAANG stocks are underperformers this year. Shares of Apple (AAPL 0.70%) have soared more than 20%. And that impressive gain came despite the company posting disappointing Q3 results.

Investors are focusing on the future with Apple -- just as they should be. The company continues to ride the wave of 5G adoption. Its iPhone sales seem likely to reach record levels this holiday season unless supply chain issues serve as a damper. The 5G "supercycle" could keep going throughout 2022 and even beyond.

Apple could enjoy even stronger growth going forward. The company could unveil its augmented reality (AR) headset next year, and it's working on AR glasses. Apple is also reportedly developing a self-driving electric car.

Buffett likes Apple so much that it's the largest holding in Berkshire's portfolio. I fully expect that the stock will keep up its winning ways for years to come.

3. Mastercard

You might be at least a little surprised that I've included Mastercard (MA 0.95%) on this list. After all, the stock has fallen more than 10% so far in 2021. But there's still a lot to like about Mastercard.

The company makes money from transaction fees every time one of its credit cards is used to make a purchase. With the rise of e-commerce and the shift away from cash with in-store purchases, Mastercard's credit cards will almost certainly be used a lot more in the future.

Although Mastercard is already a global company, it still has plenty of growth opportunities in developing regions. For example, Mastercard's recent acquisition of fintech company Arcus FI should help boost its presence in the Latin American market. 

Two potential growth drivers for Mastercard might not receive as much attention as they deserve. The company's "buy now, pay later" program is picking up momentum. Mastercard is also expanding its cryptocurrency support, partnering with three cryptocurrency providers in the Asia Pacific region to launch crypto-funded Mastercard payment cards. 

It's possible that the emergence of the omicron variant could create some temporary headwinds for Mastercard if businesses experience disruptions. However, this Buffett stock should be a big winner over the long run.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Speights owns shares of Amazon, Apple, Berkshire Hathaway (B shares), and Mastercard. The Motley Fool owns shares of and recommends Amazon, Apple, Berkshire Hathaway (B shares), and Mastercard. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.