Many investors carefully follow Warren Buffett's stock moves since his holding company, Berkshire Hathaway, has outperformed the S&P 500 over many years. 

There are many popular Warren Buffett stocks that investors know and love, such as the ever-popular Apple and Coca-Cola. But there are others that have the Buffett stamp of approval that haven't caught on in the investment community despite being Buffett stocks.

Sometimes a Buffett stock fills a certain need for his company that wouldn't make sense for everyone. Investors each have their own goals. But other stocks look like they're underrated and merit more attention. Floor & Decor Holdings (FND -1.35%) and Kroger (KR 1.80%) are two I would recommend.

A niche market with a large opportunity

Floor & Decor is a relatively new Berkshire Hathaway holding, only added to the mix in November. Then again, it's only been public for five years, and its stock has gained 165% over that time.

The company operates flooring megastores with anything a person might need for any kind of hard-surface flooring. It has 174 stores that stock over 4,000 products, and it sees the potential for 500 stores over the next eight to 10 years. Its warehouse-style stores are typically much bigger than competitors', and the company strives to provide a customer-oriented experience with a focus on store design and customer service.

Aside from new store openings, its goals are to generate higher comparable sales (comps), build out its omnichannel network, expand its pro and commercial services, and develop its design services business. Sales have been growing briskly, and the company posted an exceptional earnings report on Thursday.

It was exceptional not only because sales growth was strong, but because comps were strong and net income had a very slight dip. Revenue increased 27% year over year in the second quarter to $1.1 billion, and comps increased 9%. The difference there is the amount that new stores contributed. It opened eight net new stores during the quarter and is planning to open 32 in 2022.

In this pressured environment, many stores are posting low or negative comps growth, and dramatically lower profits or losses. Floor & Decor's net income dropped 1.3% over last year to $82 million. CEO Tom Taylor noted that the company achieved this performance in an inflationary atmosphere, with rising interest rates and 10 months of declining existing home sales. However, management tweaked full-year guidance to slightly lower sales, comps, and earnings per share (EPS).

Floor & Decor shares are down 37% this year, and even at this price, they're not that cheap, trading at 32 times trailing 12-month earnings. But the potential here looks very solid, and this is a great opportunity to buy shares on the dip.

A disciplined strategy and reliable dividend

Kroger doesn't get much attention since as a supermarket it sits below Walmart, Amazon, and Costco in terms of sales. But it's still one of the biggest retailers in the world -- and growing -- with 2,800 stores in 35 states.

Kroger kind of missed the boat on digital, and that affected its sales in the years leading up to the pandemic. But it's since gotten on board, and it's now able to compete with an omnichannel experience. It also revamped its strategy and is focused on "leading with fresh" and "accelerating with digital."  This has helped it post double-digit comps growth throughout the beginning of the pandemic and to keep building on top of that pace.

In this year's first quarter, ended May 21, comps (without fuel) increased 4% year over year, and EPS rose from $0.18 last year to $0.90. Comps for the company's private label, Our Brands, increased more than 6%, and fresh department comps increased 5%. The company has invested in Our Brands as a cost-efficient label, and in this inflationary environment, shoppers are spending more of their money on off-label brands. In light of its top performance in the first quarter, management raised guidance for both comps and EPS for the 2022 full year.

As for digital, sales declined 6% in the first quarter after increasing 108% in the previous two years. Kroger is still rolling out delivery services in many areas and expanding its digital capabilities to pump up volume.

Kroger has a famous dividend that yields 2.2% at the current price and which management raised 24% in June. The shares trade at only 16 times trailing 12-month earnings, and so this cheap stock should provide years of stable, passive income.