Warren Buffett is regarded as one of the greatest stock pickers in the world. However, not even his selections are without flaw. Buffett’s holding firm, Berkshire Hathaway (BRK.A -1.74%), has occasionally hit a wall with one of its holdings. And sometimes, that barrier is clearly too high for far too long.
With that in mind, let’s see two Buffett/Berkshire equities that are down but not out.
Stock to buy: Citigroup
55.1 million shares, valued at $2.9 billion, are owned by Warren Buffett’s Berkshire Hathaway (NYSE:BRK-B).
Citigroup (C -1.32%) is the fourth-largest bank in the United States based on assets. The last several months have been difficult for all banking industry’s stocks. The increasing interest rates are causing more would-be borrowers to refuse new loans. Demand for mortgages dropped to its lowest level since 2018 during the final full week of May, according to the Mortgage Bankers Association.
Yes, Citigroup will face difficulties in the future. It may do so, especially because CEO Jane Fraser is certain that a recession is on the way, and she has already taken steps to prevent any damage. Even better, if Citigroup just meets its targets this year and 2023’s projected per-share earnings, there’s plenty of room for the stock to rise.
Stock to buy: Paramount Global
Berkshire Hathaway’s stake: 2.6 billion dollars worth of 68.9 million shares.
Why invest in a dying industry like television when you can get the same thing for much less money through streaming? Because Paramount is not only poised to profit from cord-cutting, but also helped cause it. The media group’s name is Pluto TV, and it has significant popularity with on-demand streaming service Paramount+.
According to the most recent statistics, Pluto TV is utilized by 68 million individuals each month, while Paramount+ has around 40 million paying subscribers. The firm has 62.4 million on-demand streaming customers, who have driven Paramount’s direct-to-consumer revenue up 82% year over year during the first three months of 2022. Given all of this, it’s surprising that stock prices aren’t increasing more.