Thursday, December 1, 2011

Warren Buffet Highlights 7 Stocks for Investment Potential. Two Stocks Stand Out as Different from the Others.

Warren Buffet has highlighted 7 stocks in the last quarter as good investments in the current market climate. Of the 7 stocks, 2 represent substantial departures from his previous investment discipline.

1. Buffet recently acquired over 32 million shares of IBM. Such a large investment in a technology company is a first for Mr. Buffet, who generally sticks to bread and butter stocks like with little need for increased levels of research and development. The prime example here is his long-running, and very successful investment in Coca-Cola.

Buffet's investment in IBM is centred around the fact that IBM generates a lion's share of its revenues from repeat and subscription based maintenance and service contracts. IBM has shed its consumer business (hence the advent of Lenovo laptops in North America), and decided to concentrate on corporate clients that sign long service contracts and are often less fickle to changes in technological trends or fashion.

Buffet has also purchased over 9 million shares of Intel. This stock has a great dividend, high cash flow generation, and excellent prospects in the growth of its server business. Intel's revenue increased 19% last quarter, which is evidence to the company's ability to execute well for shareholders in a difficult economic climate.

Full Disclosure: Matthew J.W. Clarke owns or indirectly controls shares in Intel (INTC).

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