Warren Buffett gets plenty of respect. And it's well earned. Buffett is a living legend and one of the greatest investors of all time.

However, not all of the stocks in Buffett's Berkshire Hathaway (BRK.A -0.76%) (BRK.B -0.69%) portfolio get as much respect as they deserve. Some of them seem to fly under the radar for many investors. Here are three underrated Buffett stocks that are smart buys right now (listed in alphabetical order).

1. D.R. Horton

Shares of D.R. Horton (DHI 0.78%) have fallen more than 20% below the high set in July 2023. Some investors appear to be bailing on the housing stock because of concerns about high mortgage rates.

I suspect, though, that Buffett could see the pullback as a great buying opportunity. After all, he loaded up on D.R. Horton shares in the second quarter of 2023, a period when the stock price was generally higher than it is now. 

Why is D.R. Horton a smart buy right now? Valuation is a top factor. D.R. Horton's forward price-to-earnings ratio is only 8.2 times. That's dirt cheap compared to most stocks on the market.

The company also has exceptional long-term growth prospects. D.R. Horton ranks as the No. 1 homebuilder in the U.S. based on volume. There's still a housing shortage in many parts of the country. Americans are increasingly turning to adjustable-rate mortgages in anticipation that interest rates will fall in the future, a trend that should boost D.R. Horton's business. 

2. Markel Group

Most investors know about Berkshire Hathaway thanks in large part to Buffett's personal fame. However, there's a "baby Berkshire" that doesn't gain as much attention. I'm referring to Markel Group (MKL -1.00%).

Markel's core business is insurance just as Berkshire's is. In this case, though, the company focuses on specialty insurance, which underwrites risks that traditional insurers won't cover. Markel's underwriting expertise makes it a leader in the specialty insurance market.

Also like Berkshire, Markel owns stakes in other businesses. Its Markel Ventures segment owns a growing family of 19 companies, including a crane manufacturer, a homebuilder, and a concierge primary healthcare provider. Markel Group's investment portfolio features positions in over 100 stocks. Many of them are also owned by Berkshire. In fact, Markel's biggest holding is Berkshire Hathaway itself. 

Markel Group is reasonably valued with a forward-earnings multiple of 15.5 times. It should perform well as the overall U.S. economy grows.

3. Mitsubishi

Buffett has become a big fan of Japanese trading houses. Berkshire's portfolio includes five of them. Its biggest holding in the group, though, is Mitsubishi (MSBHF 0.55%). Berkshire owns 8.3% of the Japanese conglomerate. 

One reason why American investors might be less familiar with Mitsubishi is that its shares are only available on over-the-counter (OTC) markets. However, there's a lot to like about this stock.

First of all, Mitsubishi is a bargain right now. Its shares trade at 10.3 times trailing-12-month earnings and less than 0.5 times sales. This attractive valuation played a key role in Buffett's decision to invest in the stock.

Mitsubishi also offers an impressive level of stability. It's been in business since 1870. The conglomerate owns nearly 1,700 companies spread across 10 industries. That kind of diversification is better than what many exchange-traded funds (ETFs) offer.