Warren Buffett and Ken Griffin Have One Thing in Common: They Both Like These 2 “Strong Buy” Stocks

Following in the footsteps of one of Wall Street’s investing giants is a well-known strategy for those looking for alpha in the markets.

But is there a better blueprint out there? There is! Tracking the moves of not one, but two investing legends. And when two stock pickers with almost unrivaled success are seen leaning into the same names, surely investors are keen to find out why they are piquing the interest of the leaders in the field.

In this case, we’re talking about Warren Buffett and Ken Griffin, two proponents of different styles, yet both wildly successful. The former is known for his adherence to value investing while the latter has a proclivity for quantitative investment techniques. But having different styles does not mean they don’t reach the same conclusion at times.

With this in mind, we opened up the TipRanks database to check the details on two equities that both investing giants have made room for in their respective portfolios. Looks like these two are not alone in their support – both stocks claim a Strong Buy consensus rating. Let’s check the details.

T Mobile US (TMUS)

For our first Buffett/Griffin-backed name we’ll look at telecoms giant T-Mobile US. The wireless network operator is second-largest wireless carrier in the US and has managed to capture a significant portion of the industry’s expansion. It has done this by greatly enhancing its network and implementing creative marketing strategies to reach neglected areas in both urban and rural regions. The company also touts its credentials as a 5G leader, by boasting of the biggest, fastest and most lauded 5G network in the country.

Obviously, we’re talking about a huge operation, with a workforce numbering ~71,000 and a market cap over $159 billion. As of the end of Q1, the company’s total customer count stood at a record 114.9 million.

That said, it wasn’t all plain sailing in the quarter. Revenue fell by 2.4% year-over-year to $19.63 billion, while missing the Street’s call by $430 million. There was better luck on the bottom-line, as EPS of $1.58 trumped the $0.48 forecast.

The shares put in a decent performance during last year’s bear but have been excluded from this year’s rally, down by 5% year-to-date.

Buffett and Griffin are evidently keen on this mobile giant. Buffett holds a big TMUS position, owning 5,242,000 shares. These are currently worth north of $705 million. Meanwhile, it looks like Griffin has been using the depressed price to pick up shares. He bought most of his holdings in Q1 – 4,416,305 shares, to be exact. His total now stands at 5,014,198 shares, currently worth $675 million.

Mirroring these investing sages’ confidence, Oppenheimer’s Timothy Horan is keeping the faith even in the face of rising 5G competition. The 5-star analyst writes, “We maintain our positive outlook on TMUS as the network and value leader which has driven outperformance vs peers in the 5G-era, however, we see its lead beginning to narrow as VZ/T wrap up their C-Band deployments. TMUS is making headway in rural and enterprise sectors where it is underpenetrated. The company now claims 16.5% market share in rural, up from low double-digit share 2-years ago and approaching its 2025 target of 20%, and outpaced VZ in business phone net adds and churn in 1Q.”

These comments underpin Horan’s Outperform (i.e., Buy) rating while his $190 price target implies shares will push ahead by 41% over the coming months. (To watch Horan’s track record, click here)

There’s full agreement on the Street regarding this one. The stock’s Strong Buy consensus rating is based on Buys only – 17, in total. At $179.53, the average target makes room for 12-month returns of ~34%. (See TMUS stock forecast)

Visa (V)

Let’s turn now to another giant and one of the world’s biggest brands. Visa is a name known by all, a global financial services firm that operates one of the world’s largest electronic payment networks. It connects millions of merchants and financial institutions across the globe, offering a reliable and efficient platform for electronic payments whilst facilitating secure digital transactions between consumers, businesses, financial institutions, and governments. With a market cap north of $470 billion, it claims a spot among the top 15 most valuable companies in the world.

Visa is a giant yet one also consistently posting steady growth and that was the case again in the most recently reported quarter – for the fiscal second quarter of 2023 (March quarter). Revenue reached $8 billion, amounting to an 11.1% YoY uptick, whilst outpacing the Street’s call by $210 million. At the other end of the equation, EPS of $2.09 came in ahead of the $2.01 expected by the analysts. The company saw Q2 total payments volume of $2.96 trillion, just edging ahead of consensus at $2.95 trillion.

Looking ahead, for F3Q23, net revenue is anticipated to increase by low double digits while adj. operating expenses are expected to drop by 2-3 ppts each quarter through F4Q23.

These results must have been pleasing to Buffett and Griffin. Buffett holds a significant V position, owning 8,297,460 shares worth approximately $1.9 billion, while Griffin doubled his holdings in Q1 by adding 1,190,831 V shares. He currently holds a total of 2,251,070 shares, valued at over $514 million.

For Evercore analyst David Togut, Visa’s value proposition makes it a stock to own whatever the macro backdrop.

“Our Top 3 Pick for 2023, V’s resilient business model and sizable moat around its network offers best-in-class risk/reward with downside protection in an uncertain macro environment and material upside opportunity in a rising economy,” the analyst explained. “And while management’s FY2023 guidance and our estimate does not incorporate a recession, we see minimal downside risk to guidance given several potential macro and secular tailwinds: A) rebound in Asia Pacific travel; B) further digitization of payments; and C) robust value-added services revenue growth of 20%+ constant currency in FY2023 and beyond.”

Quantifying this stance, Togut rates Visa shares an Outperform (i.e., Buy) backed by a $300 price target. The implication for investors? Upside of ~32% from current levels. (To watch Togut’s track record, click here)

Overall, there’s plenty of love for Visa on the Street. Barring one skeptic, all 19 other recent reviews are positive, making the consensus view here a Strong Buy. At $272.55, the average target implies shares will be changing hands for ~20% premium a year from now. (See Visa stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.