Warren Buffett Stocks: ANET, ELF Among 23 Names On This Screen

With names ranging from artificial intelligence and cloud computing firm Arista Networks (ANET) to cosmetics and skin care specialist ELF Beauty (ELF), 23 companies make this screen emulating Warren Buffett stocks based on the investing strategy of the Berkshire Hathaway CEO.


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.

Other top tech and AI stocks joining Arista Networks include Epam Systems (EPAM) and Globant (GLOB). From the semiconductor industry, Monolithic Power Systems (MPWR), Axcelis Technologies (ACLS) and Lattice Semiconductor (LSCC) have also etched their names on this stock screen.

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From the world of fashion, ELF stock, which has soared to record highs, joins Lululemon Athletica (LULU). Ready for its close-up with earnings due Feb. 6, ELF was just featured on IBD Sector Leaders, our most stringent screen.

Several homebuilders have also crafted a spot on the list, including PulteGroup (PHM), Toll Brothers (TOL) and Taylor Morrison Home (TMHC).

Energy sector firms Enerplus (ERF) and Daqo New Energy (DQ) have also powered their way to the top of this screen.

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Sustainable Earnings Growth In Focus

Canadian oil & gas exploration firm Enerplus tops the list with a sustainable earnings growth rate of 72%. (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.)

DQ stock, which has seen its Composite Rating go dark with a dismal 15, still sports a 61% sustainable earnings growth rate.

This screen of Warren Buffett stocks showcases four other companies sporting a sustainable growth rate over 40%. Lattice Semiconductor, Sociedad Quimica (SQN), Wabash National (WNC) and LULU stock also hit that benchmark.

Lululemon was featured as the IBD Stock Of The Day on Jan. 30.

ANET, ELF Stock 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 (BRKB).

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 Alphabet and Lululemon in sync with Buffett’s focus on management quality and long-term growth.

Created in MarketSmith, 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.

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Warren Buffett Stocks: MarketSmith Screen

Screen created using MarketSmith data as of Feb. 2, 2024.

Company Symbol Sustainable Growth % ROE 5-Yr Avg Comp Rating EPS Rating RS Rating SMR Rating
Enerplus ERF 72 39.8 24 54 18 B
Daqo New Energy DQ 61 30.1 15 49 6 B
Lattice Semiconductor LSCC 55 36.2 69 97 18 A
Sociedad Quimica SQM 51 36.2 17 61 10 B
Wabash National WNC 45 15.7 88 92 76 B
Lululemon Athletica LULU 44 41.2 98 98 86 A
Arista Networks ANET 33 26 99 98 96 A
Mueller Industries MLI 33 29.4 88 79 90 B
Axcelis Technologies ACLS 30 17.4 86 98 34 A
ExlService EXLS 28 21.9 86 97 66 A
Camtek CAMT 27 20.3 90 87 98 B
STMicroelectronics STM 27 22.1 52 81 37 B
ELF Beauty ELF 25 23.6 98 98 97 A
Old Dominion Freight Line ODFL 25 28.3 68 83 57 B
PulteGroup PHM 25 24.3 94 88 94 B
Taylor Morrison Home TMHC 25 17.1 90 74 88 B
Epam Systems EPAM 24 20.6 81 88 66 B
Monolithic Power Systems MPWR 23 29.3 93 83 89 B
Mosaic MOS 22 17 17 53 14 B
Nucor NUE 21 32.2 80 67 81 C
Rush Enterprises RUSHA 20 15.9 81 77 86 A
Toll Brothers TOL 20 17.6 92 87 94 B
Globant GLOB 15 14 99 96 94 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, Arista and Globant sport the highest-possible 99 Composite Rating. Lululemon and ELF Beauty 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.


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