Among the rules for investing in the manner of billionaire investment tycoon Warren Buffett, is to invest cheap and for the long-haul. For those who subscribe to the book of Buffett but don’t have a checkbook to match, the Omaha-native has a couple of companies in his portfolio that are more appealing for a smaller budget.
Among these companies is Gannet Co., Inc. (NYSE: GCI) the international media and marketing solutions company. Gannet relied on multiple platforms to share information with consumers. They are engaged in internet, mobile, newspapers, magazines and television stations. Shares of Gannet were selling for $15.17 a share today which is in the middle of its year-long trading price. Shares have been as high as $19.69 for the year and as loq at $11.65. Gannet has a forward price to earnings ratio of 6.3 with a yield of 1.0 percent.
Bank of New York Mellon (NYSE: BK), the New York Financial institution currently selling at $28.25 on high volume has a yield of 1.2 percent with a P/E ration of 10.6. Again the company is down significantly from it’s 52-week highs after submitting less than impressive earnings, but to mention another Buffett strategy, go against the grain. Investing while the shares of a company are lower, but not entirely defeated allows for higher margins when it comes time to sell.
Finally, there’s Johnson & Johnson (NYSE: JNG), which isn’t cheap so-to-speak with share prices at $64.14 today. Still the stock seems primed to go higher and exceed the 52-week highs of $65 it’s currently narrowly beneath. The New-Brunswick-based Pharmaceutical company and has a number of deals in the works. A rumored Merger with Swiss Medical device maker Synthes (VTX:SYST) has been floating around Wall St. alongside positive chatter regarding the company’s Hepatitis C treatment which is currently being sold at exorbitant prices during a French trial. The stock has a 3.6 percent yield and a 11.6 P/E. The dividends on J&J increase consistently on an annual basis.
There are a number of other Buffett companies that are inexpensive, like USG Corp (NYSE: USG). for instance, but the likelihood that they will return or exceed 52-week highs this year is very low. USG is currently trading at $15 per shares, well beneath highs of $25.59 for the year. The company generated negative earnings and an investment in the company, which specializes in building materials and other products for use in new residential, new nonresidential, and residential and nonresidential repair and remodel construction, is unlikely to shoot back up in the near future. Chances are shares will return once the economic recovery finally engages the housing market, but the time line for that remains a mystery to analysts.
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