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3 No-Brainer Warren Buffett Stocks to Buy for 2022

By Neha Chamaria – Dec 29, 2021 at 7:25AM

Key Points

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These Buffett stocks look primed for huge things in the near future.

A quick look at the top 10 stocks that legendary investor Warren Buffett owns through his company, Berkshire Hathaway (BRK.A -1.05%) (BRK.B -1.36%), reveals that seven of them gained at least 25% in 2021, five at least 35%, and the top performer almost 48%, as of this writing. The S&P 500 index, in comparison, is up 27% so far this year. While Berkshire owns a large number of stocks and not just these 10, these numbers show why so many investors follow Buffett's stock-picking style, or often simply buy the stocks he does.

I don't quite recommend putting your money in a stock just because Buffett has, but Berkshire's portfolio is an excellent hunting ground if you're looking for stock ideas. Here are three Buffett stocks that I think are no-brainer buys before the year ends.

The fears are overrated, and catalysts underrated

Visa (V -0.86%) shares have hugely disappointed in the second half of 2021, partly because of its ongoing feud with Amazon (AMZN -1.90%) and renewed fears of COVID-19 shutdowns that could hit consumer spending. While the latter is a risk that's not going to affect Visa alone, the company is eager to resolve issues with Amazon, and that could just be one of the big triggers for Visa stock in 2022.

Gold colored numerical 2022 placed over dollar bills.

Image source: Getty Images.

Amazon intends to ban payments using Visa cards on its platform beginning Jan. 19 because of high transaction fees. Visa has expressed surprise over Amazon's decision, saying such transaction fees are regulated in the U.K., and is already negotiating with the e-commerce giant. There's a good chance Amazon might retreat, as the move could cost Amazon U.K. nearly 1.4 billion British pounds, according to British newspaper The Independent.

So while it strives to settle its dispute with Amazon, Visa hasn't lost focus on innovation and growth. For example, it just acquired CurrencyCloud for nearly $925 million. While CurrencyCloud's cloud-based platform allows cross-border foreign currency exchange services across 180 countries and even has access to RippleNet under its partnership with Ripple, which owns the popular namesake cryptocurrency, Visa has also reportedly partnered with 60 crypto platforms to launch cards that facilitate digital currency spending.

Visa's operational performance doesn't leave much room for complaint, either -- its payments volume rose 16%, and revenue and net income grew 10% and 13%, respectively, in the fiscal year ended Sept. 30. With Visa also increasing its dividend by 17% and the world increasingly switching from cash to digital payments in this pandemic, this Buffett stock is a must-own for any long-term investor.

No longer the boring auto stock

Shares of legacy automaker General Motors (GM -2.99%) rallied roughly 37% this year as of this writing, but the stock is still trading significantly below its five-year average price-to-earnings ratio. Given the pace at which GM is going all out to exploit the electric-vehicle (EV) boom, the stock looks primed for stronger days ahead.

In mid-2021, General Motors outlined ambitious plans to invest $35 billion on electric and autonomous vehicles between 2020 and 2035. By 2030, GM projects its EV revenue to jump to nearly $90 billion, from an estimate $10 billion in 2023.

On Dec. 17, GM delivered its first GMC Hummer EV pickup. The same day, GM's wholly owned subsidiary BrightDrop also delivered the first of its 500 all-electric EV600 vehicles to FedEx. Days later, GM announced plans to expand its EV technology beyond its own brands by supplying EV components and solutions to help others electrify their fleet, including in the marine industry. GM's majority-owned subsidiary Cruise also expects the automaker to start manufacturing a driverless vehicle called Origin in 2023.

In short, there's a lot happening at GM that should excite auto investors and pique the interest of any investor looking to buy a Buffett stock right now.

A top bet on the world's largest EV market

For several months now, I've been pounding the table on another auto stock Buffett owns: BYD (BYDDY 1.01%). Several investors have been wary of investing in Chinese stocks, given the potential risk of delisting from the U.S. that they face, but BYD is also already listed on the Hong Kong stock exchange. And the company is firing on all cylinders from an operational point of view.

BYD is one of the world's largest EV manufacturers as well as one of the largest lithium-ion battery manufacturers in China, which is also the world's largest EV market. BYD is currently the largest seller of new energy vehicles (NEVs) in China, with its monthly sales approaching the 1 million mark. At this pace, BYD could corner 25% of China's NEV market in 2022.

Notably, BYD is also rapidly expanding its footprint outside China, particularly in Europe. BYD already builds and sells electric buses in the United States. There's a lot more happening at BYD, too: In December alone, BYD announced that it'll launch its second model in Singapore in 2022 and will increase its stake in its joint venture with Daimler to 90%. BYD is also entering the autonomous-driving space through a joint venture, which could pave the way for much bigger things for the automaker. On top of all that, BYD is reportedly in talks with Toyota to help launch the latter's electric cars in China.

With China's NEV sales growing at a torrid pace and the lithium-ion battery market exploding, BYD is positioned stronger than ever to cash in on the boom, making it a no-brainer Buffett stock to own.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool owns and recommends Amazon, BYD, Berkshire Hathaway (B shares), FedEx, and Visa. 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), short January 2022 $1,940 calls on Amazon, short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

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