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The following is a list of Warren Buffet’s Top Buys from the last quarter.

Stock

Symbol

Shares Held - 06/30/2011

Shares Held - 09/30/2011

Change in shares

International Business Machines

IBM

24854744

57348984

32494240

Wells Fargo & Company

WFC

352327608

361369808

9042200

Intel Corporation

INTC

0

9333000

9333000

Visa Inc.

V

0

2291708

2291708

CVS Caremark Corporation

CVS

0

5661000

5661000

Directv

DTV

0

4249400

4249400

General Dynamics Corp.

GD

0

3064422

3064422

Source: 13F filing

My favourites among the above stocks are IBM and Intel. IBM’s stock has been a consistent performer in the past few years outperforming S&P 500 in 5 out of the past 6 years. I like the defensive nature of the business given that its high visibility annuity business accounts for more than 50% of revenue and 70% of profits which will support the company during downturn. Trading at around 13x forward earnings, the stock does not look pricey.

Intel also looks attractive after its latest quarterly results. It positively surprised the Street, despite macro headwinds and sluggish industry PC unit growth. According to Gartner, global PC shipments grew 3.2% in Q3. Intel’s 19% revenue growth clearly represents a significant outperformance. The primary drivers were 10-12% higher chip prices from feature additions (graphics) and superior competitive position. I believe current year and next year consensus sell side estimates for Intel are likely to prove conservative given its strong product execution (for example: Sandy Bridge), pricing, and secular growth in servers. Trading at 10.8x forward earnings, the stock does not look expensive and there is a good chance of multiple expansion. A 3.3% dividend yield is an added benefit for investors looking to buy the stock.

Among other stocks, I like Visa, CVS and Wells Fargo. Visa Inc. is a very good long term investment as it will continue to benefit from the secular shift in spending from paper to plastic globally for next several years.

CVS reported better-than-expected results last quarter pointing to continued strength in its business. According to UBS analyst, CVS is likely to continue benefiting from multiple industry growth opportunities going forward including the Express Scripts (ESRX)/ Medco Health (MHS) merger, the Walgreen (WAG)/ Express Scripts dispute, and the generic wave. The company’s analyst day on Dec 20, can be a good catalyst for the stock.

Wells Fargo is one of the well capitalized banks available at low valuations (8x forward PE). It can prove to be a very good investment at current levels, if broader macro environment improves going forward.



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: A Closer Look At Warren Buffet's 7 Big Buys From Last Quarter