TheBadPlaceYahoo Finance | The Best-Value Warren Buffett Stock You Can Buy Right Now
Warren Buffett, the former CEO of Berkshire Hathaway, is known as one of the greatest value investors of all time. The portfolio he built at Berkshire Hathaway has changed over the past several decades, but it has always included stocks that Buffett targeted as great values. Buffett is no longer running Berkshire, but the portfolio is filled with the stocks that were picked during his tenure as CEO -- and many of them are great values, especially now with the recent market pullback. The absolute cheapest stock in the Buffett portfolio right now is Charter Communications, trading at just 6x earnings and 5x forward earnings. However, the best value stock in the Buffett portfolio right now is Bank of America (NYSE: BAC).
Bank of America is the fifth-largest holding in the Berkshire portfolio, representing a roughly 9% stake. Until two years ago, it had been the second-largest holding, but Buffett and his team have been paring back on shares in recent quarters. Right now, though, it appears to be in the buy zone. The stock is down about 12% year to date and is trading at around 12 times earnings, the lowest it has been in a year. Its forward price-to-earnings ratio (P/E) is only 11, and its five-year price/earnings-to-growth ratio (PEG), based on projected earnings, is 0.93. A PEG below 1.0 means it is undervalued. And its price-to-book value is relatively low at 1.2.
Wall Street analysts have established a median price target of $61 for Bank of America, which would suggest 26% upside for the stock over the next 12 months. And 83% of analysts rate it as a buy. Last year, Bank of America increased its revenue by 7% and lowered its provision for credit losses compared to the previous year. The revenue gains and provisions numbers were even better in the fourth quarter, a source of momentum heading into 2026. The bank also lowered its efficiency ratio by 194 basis points to 61% in the fourth quarter. That means it is making more for every dollar it spends. That shows up in the earnings, which increased 18% in the quarter to $0.98 per share. Its net interest income grew about 7% in 2025 to $60.1 billion. Management expects it to grow by a similar amount in 2026, projecting a range of 5% to 7%. Also, with its net charge-off ratio down in the fourth quarter and lower provisions for credit losses, that suggests its credit quality is improving. Charge-offs are loans that won't be repaid. While the interest rate picture is a bit murky right now, Bank of America, as a premier lender in the United States, is well-positioned in either scenario. If rates come down, it should spur more lending activity, which would likely boost net interest income as deposit rates drop. If rates hold where they are, it will likely maintain its solid increase in net interest income and its current higher spreads. Combine that with its cheap valuation, and this Buffett stock looks like a good buy right now.
Read more: https://finance.yahoo.com/markets/stocks/articles/best-value-warren-buffett-stock-115500994.html
#warrenbuffett #berkshirehathaway #chartercommunications #bankofamerica #nyse
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