Led by Arista Networks, Lululemon Athletica, ELF Beauty and four names from the semiconductor sector, 23 companies make this screen emulating Warren Buffett stocks based on the investing strategy of the Berkshire Hathaway CEO.
After climbing 18% this year and 81% over the last year, ANET stock just got featured as the IBD Stock Of The Day.
Note that inclusion on this screen does not necessarily mean the Oracle of Omaha owns shares in these companies. Rather, it identifies stocks in sync with Buffett's focus on sustainable earnings growth and other factors.
Chip stocks etching their names on the list include Lattice Semiconductor, ON Semiconductor, STMicroelectronics and Monolithic Power Systems.
Tech services provider Globant and digital advertising optimization firm Perion Network also makes the list.
More Warren Buffett Stocks To Watch
Homebuilders PulteGroup and Taylor Morrison Home have also crafted a spot on this list.
Steel stocks Steel Dynamics and Nucor have also forged their names on this screen alongside Commercial Metals.
Yes, Top Funds Adore Nvidia. But They Love This Non-AI Sector.
Sustainable Earnings Growth In Focus
Lattice Semiconductor has climbed to the top of the screen in terms of sustainable earnings growth rate. (The rate is computed by multiplying the company's ROE by the earnings retention ratio, which is the percentage of earnings not paid out as dividends.)
Including LSCC stock, this screen of Warren Buffett stocks showcases a total of seven companies sporting a sustainable growth rate over 30%. LULU stock, ON and ANET also hit that benchmark.
Arista, Lululemon In Sync With Warren Buffett Stocks
Since the Oracle of Omaha has never written a book detailing his investment strategy, there's no definitive buying checklist. But parts of Buffett's stock-picking strategy can be gleaned from the annual reports of Berkshire Hathaway.
In addition to the annual reports, take a look at what's inside Berkshire Hathaway's portfolio to track Warren Buffett's latest moves.
However, while the computer-generated stock screen below is not a list of companies necessarily owned by Buffett or Berkshire, it highlights Warren Buffett stocks like ANET, LULU and ELF in sync with Buffett's focus on management quality and long-term growth.
Created in MarketSurge, the screen below emphasizes metrics to use when looking for companies with long-term past, and potential future, growth. To make the list, each stock must meet a wide range of criteria, including:
- In the top 25% of all stocks in terms of five-year annual EPS growth rate.
- 15% or greater sustainable earnings growth.
- 12% or better five-year average return on equity.
Build Your Watchlist With The IBD Stock Screener
Warren Buffett Stocks: MarketSurge Screen
Screen created using MarketSurge data as of March 15, 2024.
| Company | Symbol | Sustainable Growth % | ROE 5-Yr Avg | Comp Rating | EPS Rating | RS Rating | SMR Rating |
|---|---|---|---|---|---|---|---|
| Lattice Semiconductor | LSCC | 48 | 39.4 | 82 | 91 | 27 | A |
| Lululemon Athletica | LULU | 44 | 41.2 | 99 | 98 | 83 | A |
| Arista Networks | ANET | 36 | 27.4 | 98 | 98 | 94 | A |
| Enerplus | ERF | 35 | 39.8 | 76 | 60 | 85 | B |
| Axcelis Technologies | ACLS | 32 | 22.1 | 66 | 98 | 11 | A |
| ON Semiconductor | ON | 32 | 28 | 50 | 77 | 21 | B |
| Terex | TEX | 31 | 22.2 | 73 | 89 | 50 | A |
| ExlService | EXLS | 29 | 24.3 | 79 | 96 | 44 | A |
| Old Dominion Freight Line | ODFL | 27 | 28.3 | 80 | 82 | 81 | B |
| STMicroelectronics | STM | 27 | 22.1 | 62 | 80 | 30 | B |
| Perion Network | PERI | 26 | 15.7 | 63 | 98 | 9 | A |
| Steel Dynamics | STLD | 26 | 36.7 | 77 | 62 | 84 | C |
| E.L.F. Beauty | ELF | 25 | 27.1 | 98 | 98 | 97 | A |
| PulteGroup | PHM | 25 | 25 | 93 | 88 | 93 | B |
| Nucor | NUE | 22 | 32.2 | 68 | 66 | 76 | C |
| AAON | AAON | 21 | 19.6 | 97 | 96 | 87 | A |
| Arch Capital Group | ACGL | 21 | 13.3 | 98 | 96 | 87 | A |
| Commercial Metals | CMC | 21 | 23.4 | 74 | 74 | 71 | C |
| Magnolia Oil & Gas | MGY | 21 | 35.5 | 72 | 60 | 73 | B |
| Monolithic Power Systems | MPWR | 20 | 29.5 | 94 | 82 | 88 | A |
| Sociedad Quimica | SQM | 20 | 36.2 | 19 | 51 | 13 | C |
| Taylor Morrison Home | TMHC | 17 | 17.2 | 88 | 68 | 86 | C |
| Globant | GLOB | 15 | 14 | 90 | 96 | 66 | A |
IBD Stock Ratings Vs. The Oracle Of Omaha
IBD uses different criteria to build this screen emulating certain characteristics of Warren Buffett stocks than those Buffett generally uses. For example, Lululemon sports the highest-possible 99 Composite Rating. ANET and ELF are just behind with a 98.
Many companies on the list do meet typical Warren Buffett criteria but do not meet some benchmarks that CAN SLIM investors seek in the other stock ratings that gauge a company's fundamental, as well as technical, strength.
Ranging from 1 (worst) to 99 (best), the Composite Rating reveals how strongly a company is showing the seven telltale traits of winning stocks. For example, a rating of 95 means the company is outperforming 95% of all other stocks in terms of the most important fundamental and technical stock-picking criteria.
The EPS Rating tracks a company's annual and quarterly earnings growth, then measures how its numbers stack up against those of all other stocks. So, just like the Composite Rating, a score of 95 means the company's EPS growth is in the top 5% of all stocks.
Similarly, identifying stocks with strong fundamentals, the SMR Rating tracks sales growth, profit margins and return on equity as a whole. An A rating means the company is in the top 20% of all stocks in terms of those key fundamental performance metrics. Since it ties in with the legendary investor's focus on a company's fundamentals, this can be a particularly useful rating for investors looking for potential Warren Buffett stocks.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
