There are a few thousand stocks in the U.S. But a big part of the market value, the trading volume – in short, the action – is in the largest 20. Here are my ratings on the largest 20 stocks.
Berkshire Hathaway (BRK.B, $502 billion), Buy. Warren Buffett probably can’t live forever, but he has groomed an able team. And if Berkshire ever wanted to sell some of its subsidiaries, I believe it would find an eager market.
Johnson & Johnson
Procter & Gamble Co
General Electric (GE, $311 billion), Sell. In the past five years, this once-mighty stock has lost 74% of its value. Tempting though it is to bottom-fish, I think the company is too badly run.
United Health Group (UNH, $303 billion), Buy. This managed-care company boasts good growth, good profitability, and a reasonable valuation at 17 times earnings.
J.P. Morgan Chase (JPM, $285 billion), Buy. Banks are out of favor because loans may sour in this recession), but I like CEO Jamie Dimon, and the price is right at 12 times earnings.
Walt Disney Co
In 16 years of doing ratings on the largest companies, my buys have averaged 11.2%, my sells 11.8%. Both have done worse than the Standard & Poor’s 500 Index, at 13.2%. All figures include dividends.
Bear in mind that my column recommendations are theoretical and don’t reflect actual trades, trading costs or taxes. Their results shouldn’t be confused with the performance of portfolios I manage for clients. And past performance doesn’t predict future results.
Disclosure: I own Alphabet, Apple, Berkshire Hathaway and Disney personally and for clients. My wife and some of my firm’s clients own Adobe, Amazon.com, Microsoft and Nvidia. Some clients own Johnson & Johnson and J.P. Morgan. A fund I manage has a short position in Tesla.
John Dorfman is chairman of Dorfman Value Investments LLC. His firm or clients may own or trade securities discussed in this column. He can be reached at [email protected].