Many investors closely follow Berkshire Hathaway's (BRK.A +0.51%) (BRK.B +0.76%) stock portfolio, which is currently worth $312 billion, for fresh investment ideas.
That's because most of those stocks were approved by Warren Buffett, Berkshire's longtime CEO and one of the world's most successful investors. Even though Buffett will step down by the end of the year, his successor, Greg Abel, probably won't abruptly prune those top stocks.
So if you're looking for some stocks to accumulate even as the S&P 500 hovers near its all-time highs, Berkshire's portfolio is still a great starting point for most investors.
I believe these three Buffett-approved stocks are worth buying hand over fist right now: Chubb Limited (CB 0.07%), Moody's (MCO 0.87%), and VeriSign (VRSN 1.82%).
Image source: The Motley Fool.
1. Chubb Limited
Chubb, which is based in Switzerland, is the world's largest publicly traded provider of property, supplemental, health, and casualty insurance policies. It was known as ACE Limited until 2016, when it acquired the original Chubb and inherited its brand.
Chubb's insurance business is well-insulated from economic downturns, because most of its customers won't cancel their crucial policies just to save a few dollars. Its combined property and casualty (P&C) ratio, which should stay below 100% (to indicate its claims aren't exceeding its premiums earned), came in at just 86.6% at the end of 2024. That's far below the industry average of 96.6% for P&C insurers in the United States.
NYSE: CB
Key Data Points
That might be why Berkshire Hathaway, which already owns insurance giants like Geico and Gen Re, initiated a position in Chubb in 2023 and bought more shares in 2024. That $7.5 billion position now accounts for 2.4% of Berkshire's entire portfolio, and it didn't trim that stake even as it sold some of its other top holdings over the past year.
From 2024 to 2027, analysts expect Chubb's earnings per share (EPS) to grow at a steady compound annual growth rate (CAGR) of 9%. It also looks like a bargain at 10 times next year's earnings, so it's definitely worth accumulating even if the broader market seems overheated.
2. Moody's
Moody's is one of the largest providers of financial data, analytics, and credit rating services in America. It shares a near-duopoly in that market with S&P Global. Both companies serve a wide range of businesses, financial institutions, and other major organizations.
Moody's runs an evergreen business which thrives through bull and bear markets. Regardless of the market's overall direction, its customers rely on its services to make informed financial decisions. Berkshire initially invested in Moody's in 2000, and it hasn't sold a single share since 2013. That $11.9 billion stake now accounts for 3.8% of its portfolio.
NYSE: MCO
Key Data Points
Moody's is still sensitive to higher interest rates, which can throttle new debt offerings and the market's demand for their credit rating services. But as those rates decline, that demand should warm up as fresh debt offerings hit the market. That's why it raised its full-year guidance in October. It's also been upgrading its platform with new AI features.
From 2024 to 2027, analysts expect S&P Global's EPS to grow at a CAGR of 15%. Its stock might not seem like a bargain at 32 times next year's earnings, but the company's reputation as a safe haven play could easily justify that higher valuation.
3. VeriSign
VeriSign runs the domain name registries for the internet's two most popular top-level domains: .com and .net. It's also the top subcontractor for the .edu and .jobs domains. It sells its domain names to registrars like GoDaddy, which then sell them to website operators.
That's a simple and evergreen business model. As long as businesses, organizations, governments, and individuals keep registering and renewing those domains, its profits will keep rising. From 2014 to 2024, its year-end .com and .net registrations rose from 130.6 million to 169 million as its renewal rate stayed in the low 70s.
NASDAQ: VRSN
Key Data Points
Like Chubb and Moody's, VeriSign's business can grow in both bull and bear markets. Its customers probably won't shut down their websites unless their businesses go under, and its constant growth in new registrations can easily offset its loss of older websites.
That's probably why Berkshire started to invest in VeriSign in 2012. It sold nearly a third of its shares earlier this year, but it still holds a $2.2 billion stake which accounts for 0.7% of its portfolio. From 2024 to 2027, analysts expect VeriSign's EPS to grow at a CAGR of 8%. Its stock still looks reasonably valued at 25 times next year's earnings, and it should be a safe long-term play even if the broader market cools.
