{"id":8326,"date":"2022-06-16T19:29:40","date_gmt":"2022-06-17T00:29:40","guid":{"rendered":"http:\/\/blog.jlbn.net\/?p=8326"},"modified":"2022-06-19T14:42:07","modified_gmt":"2022-06-19T19:42:07","slug":"2-warren-buffett-stocks-to-buy-and-hold-forever","status":"publish","type":"post","link":"http:\/\/blog.jlbn.net\/?p=8326","title":{"rendered":"2 Warren Buffett Stocks to Buy and Hold Forever"},"content":{"rendered":"\n<ul><li>Higher costs have weighed on Amazon&#8217;s profitability, but this will likely prove temporary.<\/li><li>Moody&#8217;s rating and analytics business should continue to prove a powerful combination.<\/li><\/ul>\n\n\n\n<h2>Patient investors will likely do well holding on to these two stocks for a very long time.<\/h2>\n\n\n\n<p>When looking for long-term stock holdings, following multi-billionaire Warren Buffett&#8217;s investments is a good place to start. He&#8217;s certainly built a long-term track record, but he&#8217;s also known for his patient approach. One of his sayings is, &#8220;Our favorite holding period is forever.&#8221;<\/p>\n\n\n\n<p>It&#8217;s tempting to follow Buffett&#8217;s stock picks blindly, but you still should do your own homework. After all, he&#8217;s not infallible. These two stocks have been a part of\u00a0<strong>Berkshire Hathaway<\/strong>&#8216;s portfolio for some time. While their prices are down for the year, both offer excellent long-term growth prospects, presenting a wealth-creating opportunity.<\/p>\n\n\n\n<h2>1. Amazon<\/h2>\n\n\n\n<p><strong>Amazon<\/strong>&#8216;s\u00a0<strong>(<a href=\"https:\/\/www.fool.com\/quote\/nasdaq\/amzn\/\">AMZN<\/a>\u00a0-3.72%)<\/strong>\u00a0stock investors have become a little skittish this year.\u00a0<a href=\"https:\/\/www.fool.com\/investing\/2022\/06\/12\/amazon-just-split-its-stock-heres-what-comes-next\/\">The stock has dropped<\/a>\u00a0by more than 37% since the start of 2022, making this a good time to evaluate the company&#8217;s long-term growth prospects. Fortunately, these look solid.<\/p>\n\n\n\n<p>Looking at Amazon&#8217;s first-quarter results, sales grew 9% to $116.4 billion, excluding foreign currency exchange translations, but operating income was down by over 58% to $3.7 billion. While this isn&#8217;t great, it looks likely that Amazon will get back to growing profits down the road. That&#8217;s because higher costs weighed on profitability as management increased staffing and capacity to meet surging demand, but management has pledged to focus on higher productivity and efficiency.<\/p>\n\n\n\n<p>Even better, its fast-growing, high-margin Amazon Web Services (AWS) business still has bright prospects. In the latest period, AWS&#8217; sales increased by 36.6% to $18.4 billion, driving operating income 56.6% higher to $6.5 billion. It was the only segment to report a profit in the latest period.<\/p>\n\n\n\n<p>With an over 35% operating margin, this dwarfs the North American and International segments, which are typically single-digit figures. AWS, the leader in the fast-growing cloud computing business with a 33% market share, faces little competition. Its main rivals are&nbsp;<strong>Microsoft<\/strong>&#8216;s Azure and&nbsp;<strong>Alphabet<\/strong>. Better still, the business has significant barriers to entry due to the high cost and space needed for data centers.<\/p>\n\n\n\n<p>The&nbsp;<a href=\"https:\/\/www.fool.com\/investing\/how-to-invest\/stocks\/price-to-earnings-ratio\/\">price-to-earnings ratio (P\/E)<\/a>&nbsp;of 50.4 is well below the 80 times it was selling for in April. While Amazon&#8217;s P\/E is higher than the&nbsp;<strong>S&amp;P 500<\/strong>&#8216;s 20 times, as Warren Buffett has stated, &#8220;It&#8217;s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.&#8221;<\/p>\n\n\n\n<h2>2. Moody&#8217;s<\/h2>\n\n\n\n<p><strong>Moody&#8217;s\u00a0(<a href=\"https:\/\/www.fool.com\/quote\/nyse\/mco\/\">MCO<\/a>\u00a0-3.30%)<\/strong>\u00a0stock may have fallen by about 31% this year, but the company&#8217;s long-term competitive position remains strong. So this looks like an opportune time to purchase shares.<\/p>\n\n\n\n<p>The company has become known for providing ratings on debt instruments issued by corporations and countries, among other entities. Along with\u00a0<strong>S&amp;P Global<\/strong>, it has a dominant share of the market, with Fitch Ratings coming in a distant third place. Last year, this business produced revenue of $3.8 billion, accounting for over 61% of the total.<\/p>\n\n\n\n<p>There&#8217;s also its analytics business, which represented the balance of Moody&#8217;s revenue. While the rating business&#8217; results can fluctuate, depending on the economic cycle and debt issuance, this business is steadier since it charges subscription fees for items like data and information.<\/p>\n\n\n\n<p>Moody&#8217;s first-quarter revenue fell by 4.9% to $1.5 billion. However, the period showed the benefit of having the fee-based analytics business. While the rating business&#8217; revenue declined by 20% to $827 million, analytics increased by 9% after excluding the impact of acquired businesses.<\/p>\n\n\n\n<p>The stock currently has a 26 P\/E multiple, much lower than the roughly 32 times when 2022 began. With a strong ratings business that will certainly rebound when the markets recover and a growing analytics segment, the stock looks like a bargain for long-term stock investors.<\/p>\n\n\n\n<h2>Two stocks to celebrate down the road<\/h2>\n\n\n\n<p>Amazon has a strong brand in retailing, but it&#8217;s become so much more than an online seller. It generates considerable revenue and profits from its AWS business, which looks like it can continue growing quickly for a considerable period. Moody&#8217;s franchise includes ratings, which debt issuers pay for and many people rely on, plus a steadily growing analytics business.<\/p>\n\n\n\n<p>When you add in that these two stocks currently sell at a much lower valuation than earlier in the year, long-term investors who purchase them likely will have a lot to celebrate when looking back to this moment.<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Higher costs have weighed on Amazon&#8217;s profitability, but this will likely prove temporary. Moody&#8217;s rating and analytics business should continue<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[254,3421,3422],"tags":[3434,888,3425],"_links":{"self":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts\/8326"}],"collection":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8326"}],"version-history":[{"count":1,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts\/8326\/revisions"}],"predecessor-version":[{"id":8327,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts\/8326\/revisions\/8327"}],"wp:attachment":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8326"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8326"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8326"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}