2 No-Brainer Warren Buffett Stocks to Buy Right Now!!

 

POINT

  • Berkshire Hathaway owns over 40 stocks, many of which are excellent long-term investments.
  • Ally Financial (ALLY) is an undervalued bank stock with a strong auto loan business.
  • SiriusXM (SIRI) holds a monopoly in satellite radio and is pursuing new growth strategies.

1. Ally Financial (ALLY) – Buffett’s Only Small Bank Stock


Image source: 
Ally Financial 


Warren Buffett has long been a fan of the banking industry, with Bank of America (BAC) and American Express (AXP) among his largest holdings. However, the only small bank stock in Berkshire Hathaway's portfolio is Ally Financial (ALLY).

Ally Financial specializes in auto lending and was originally spun off from General Motors (GM). Today, it operates as a large retail bank with over $140 billion in customer deposits.


Recent Developments – Business Restructuring

Recently, Ally has streamlined its business, selling off its credit card division and discontinuing mortgage lending. Instead, it has focused on its core strengths: auto loans, auto insurance, and consumer banking.

  • Auto Loan Yield: Average 9.09%, making it a highly profitable sector.
  • Strong Loan Portfolio: Low risk of loan defaults.
  • Interest Rate Expectations: As the Fed lowers rates, Ally’s funding costs should decline, boosting profit margins.

Ally is currently trading at just 10 times expected 2025 earnings and offers a 3.2% dividend yield. With the possibility of lower interest rates improving its profit margins, Ally is an attractive stock for long-term investors.


2. SiriusXM (SIRI) – A Market Monopoly with Growth Potential

SiriusXM - Logo


SiriusXM is more than just another stock in Berkshire Hathaway’s portfolio. Buffett has been actively increasing his stake in the company over recent quarters. Berkshire Hathaway now owns 35.4% of SiriusXM.

However, SiriusXM’s stock has plunged by 50% in the past year.


Recent Developments – Business Model Shifts and Subscriber Growth

  • Declining Subscriber Base – Growth peaked six years ago and has been on a downward trend.
  • Revenue Decline Expected – Analysts project a drop in revenue for 2025.
  • Advertising Expansion – Introducing a freemium ad-supported tier to drive ad revenue.
  • New Subscription Model – A three-year dealer-paid plan for new car buyers to increase user acquisition.

SiriusXM is shifting its focus from traditional satellite radio to ad-supported streaming services. The company aims to add 10 million new subscribers by 2027 and increase free cash flow by 30% compared to 2025 levels.


Current Undervaluation

  • Trades at 7.6 times expected 2025 free cash flow – making it significantly undervalued.
  • 4.1% dividend yield – attractive for income investors.
  • Improving balance sheet and debt reduction – strengthening financial stability.

Despite competition from Spotify and Apple Music, SiriusXM maintains a strong position in in-car entertainment. If its new subscription strategy proves successful, the stock has significant rebound potential.


3. Conclusion – Should You Invest Now?

Warren Buffett’s investment strategy is focused on long-term value.

  • Ally Financial (ALLY): An undervalued financial stock that should benefit from falling interest rates and a recovering auto lending market.
  • SiriusXM (SIRI): A market leader in satellite radio with new strategies to drive growth.

Both stocks offer strong long-term potential, and Buffett’s growing stake in them suggests confidence in their future. For investors with a multi-year horizon, these stocks could be great buy-and-hold candidates.



Source: Motley Fool, Ally Financial & SiriusXM Official Websites

Comments

Post a Comment

Popular posts from this blog

Rivian Stock Surged – Is Now the Time to Buy?

Image
  📌 Key Points Rivian stock jumped 6.6% following reports of U.S. State Department EV procurement plans. The company is still posting large losses, requiring increased production and cost reductions. Political uncertainties and slowing EV demand pose risks, but long-term growth potential remains with new vehicle platforms.
Read more

3 Tech Defense Stocks That Could Be the Next Palantir

Image
  POINTS Palantir (PLTR) surged 368% over the past 12 months , reflecting strong market demand for companies that integrate advanced technology with defense applications. Three emerging companies— BlackSky, Redwire, and Archer Aviation —have demonstrated significant market validation, with stock gains ranging from 40% to 690% in the past year. These companies possess strong strategic capabilities and solid financial positioning , resembling Palantir’s early fundamentals and making them potential industry leaders. The U.S. Department of Defense (DoD) and global governments are rapidly adopting AI, satellite technology, space infrastructure, and electric aviation in their defense strategies. DETAILS 1. BlackSky Technology (BKSY) - Real-time Space-based Intelligence Provider BlackSky Technology BI Stock performance: +40% over the past 12 months Provides AI-powered real-time satellite image analysis , delivering actionable insights within 90 minutes. Spectra Platform: Uses AI and ma...
Read more

Best AI Stock for 2025: AMD vs. Nvidia – Where to Invest?

Image
  POINT Nvidia (NVDA) : The undisputed leader in the data center market, a key player in AI infrastructure development. AMD (AMD) : Rapidly growing, but its data center revenue is only one-tenth that of Nvidia . Both companies have similar valuations , but Nvidia maintains a higher growth rate . For AI investors, Nvidia is likely the superior choice . DETAILS Nvidia: The Unchallenged Leader in AI Data Centers Image source: nvidia Nvidia dominates the AI data center market and is the biggest beneficiary of the ongoing AI investment boom . ✅ Competitive Edge: CUDA Software Ecosystem : Nvidia's AI GPUs have become the industry standard, thanks to the dominance of CUDA software. High Switching Costs : Even if AMD releases competitive AI GPUs, companies are unlikely to switch from Nvidia’s infrastructure. Revenue Disparity : AMD Q3 2024 Data Center Revenue: $3.5B (YoY +122%) Nvidia Q3 2024 Data Center Revenue: $30.8B (YoY +112%) → Over 10 times that of AMD 📈 Future Performance Outlook...
Read more