Warren Buffett holds 49 stocks in the Berkshire Hathaway portfolio, and each one is scrutinized and pored over by investors each quarter as they look to gain insight into what one of the world's greatest investors is thinking. They want to know why he invests in those stocks and what -- if any -- changes he made (and why). 

Take the last quarterly report, for example. In Q4, he didn't add any new names to the portfolio and only increased his position in three stocks: Apple, Louisiana-Pacific, and Paramount Global. He trimmed his positions in several stocks, including big financial names like US Bancorp, Ally Financial, and Bank of New York Mellon.

Buffett doesn't typically elaborate on his moves, but one thing we do know by his actions is he loves financial stocks especially given one-third of his holdings reside in that sector. The finance arena, particularly the banking portion of it, has been knocked down this past quarter, but there are some bargains there. Here are two Buffett stocks that look like good buys, followed by one I'd avoid right now.

The good stocks

The two financial stocks that look like good buys right now are Bank of America (BAC 0.05%) and Visa (V -0.05%).

Let's start with Bank of America. This is the second-largest bank in the country and the second-biggest holding in Buffett's portfolio, representing about 11.2% of total assets. Only Apple has a greater weight in Buffett's portfolio.

Bank of America took a hit in March, when two banks, Silicon Valley Bank (a subsidiary of SVB Financial) and Signature Bank failed after a run on deposits. All banks saw their stock prices drop in the ensuing sell-off, including Bank of America, which is down about 11% year to date as of April 14. 

But the reality is, large banks, which are subject to stress testing and liquidity requirements because of the Dodd-Frank Act of 2010, were less affected by the bank failures. In fact, the mega banks, including Bank of America, saw a surge of new deposits, as there was a flight to stability among banking customers. 

What this did was bring down Bank of America's valuation to a very attractive level. It has a price-to-earnings ratio of just 9, down from 11.5 a year ago, and it's trading below its book value, with a price-to-book ratio of 0.94. These are both flashing lights that the stock is undervalued.

Analysts on average project a $36 price target for Bank of America stock, which would suggest a 22% gain from current levels. However, if there is a recession, Bank of America could struggle if lending decreases, credit quality deteriorates, and investment banking remains depressed. But long term, it is just too cheap, and too good a company to ignore.

Buffett has a more modest position in Visa, the credit card giant, at about 0.58% of the portfolio. But Visa has proven to be an all-weather stock over the past few years. While it has underperformed the S&P 500 during the past three years, with a 9.7% annual return versus a 13.7% annual return for the S&P 500, it has been much less volatile. In fact, over the past year, it's up 9.6%, while the benchmark is down 7.1%.

And Visa's long-term returns are stellar: It has posted an 18.7% annual gain over the past 10 years, almost double the S&P 500's 9.9% annual return during that span. 

As one of just two major credit processing networks, Visa is part of a duopoly, and with its highly efficient business model, it generates huge margins that allow it to outperform in good markets and bad.

The other benefit right now is Visa's attractive valuation. This has been one of the best growth stocks over the past decade, and it has a forward P/E of about 27, which is down from about 31 a year ago. With its duopoly, its efficiency, and its valuation, Visa is a good long-term buy right now.

The not-so-good stock

Buffett and his team have much more experience and knowledge than just about anyone, professionals included, so stocks they invest in are holdings for good reason. 

But if I were to whittle down the Buffett portfolio and lop off a few names, Citigroup (C -1.16%) would be on that list. He just added the stock last year, but Citigroup has long underperformed its megabank peers, including Bank of America.

It has been in turnaround mode, refocusing on its strengths, improving its controls, cutting costs, and shedding underperforming ventures, but these efforts are all underway and there's a great deal of uncertainty if they will work, and how long it will take.

It has outperformed Bank of America, up about 10% this year, and is very cheap, but if I'm investing in a bank stock, it's going to be Bank of America, JPMorgan Chase, or even US Bancorp, another Buffett holding. They have just been better, more efficient banks over the long haul.