2 No-Brainer Warren Buffett Stocks to Buy Right Now

Source The Motley Fool

Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) has a stock portfolio worth about $300 billion, with many of its positions selected by legendary investor Warren Buffett himself. To be fair, there's a solid long-term investment case to be made for most, if not all, of them.

Having said that, some look more attractive than others right now. Here are two that trade for exceptionally cheap valuations, despite having excellent growth potential in 2025 and beyond.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Buffett's only small bank stock

Warren Buffett has been a fan of the banking industry for many years, and some of his largest stock investments are banks, including Bank of America (NYSE: BAC) and American Express (NYSE: AXP). However, there's only one relatively small U.S. bank stock you'll find in the portfolio: Ally Financial (NYSE: ALLY).

Ally is primarily an auto lender and was spun off from General Motors (NYSE: GM). It also has a large retail banking platform, with over $140 billion in customer deposits.

Recently, Ally decided to simplify its business. It has agreed to sell its credit card business, and it stopped making mortgage loans in January, choosing to focus on what it does best -- auto lending, auto insurance, and consumer banking.

Because auto loans have relatively high interest rates (9.09% yield on average), there's the potential for excellent margins. Ally does a great job of maintaining strong loan quality, and it could be a big winner as interest rates gradually come down and its deposit cost starts to decrease. With shares trading for just over 10 times forward earnings, and with a 3.2% dividend yield, Ally could be a no-brainer Buffett stock to look at more closely.

A legal monopoly with an eye on growth

SiriusXM (NASDAQ: SIRI) isn't just a Berkshire stock holding -- it's one of the few stocks Berkshire has actually been buying in recent quarters. After a series of additions to its position, Berkshire now owns a staggering 35.4% of the satellite radio leader.

SiriusXM has fallen by about 50% over the past year, and for some good reasons. There are major worries about a declining subscriber base and lack of growth. The company's subscriber base peaked nearly six years ago, and revenue is expected to decline in 2025.

However, SiriusXM's management is well aware of the issues and is making big moves to turn things around. It is leaning into its advertising business in a few ways, including the launch of a free ad-supported product tier. It's also taking steps to capitalize on its core market of new car buyers, such as with its three-year, dealer-paid subscription program that is gaining traction. Management hopes to add 10 million new subscribers and to grow free cash flow by 30% by 2027, compared to expected 2025 levels.

With a valuation of just 7.6 times its expected 2025 free cash flow, a 4.1% dividend yield, and an improving balance sheet, SiriusXM makes a lot of sense from a risk-reward standpoint at the current price.

Buy for the long term

To be perfectly clear, I think both of these stocks look like excellent opportunities in 2025, but I have no idea what their stock prices are going to do over the next few weeks or months. Instead, I'm saying that the current valuations look like attractive entry points for patient investors who plan to hold their stocks for several years at a minimum. That's why Warren Buffett and his portfolio managers choose stocks, so keep this in mind when deciding if they're right for you.

Should you invest $1,000 in Ally Financial right now?

Before you buy stock in Ally Financial, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ally Financial wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $850,946!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

Learn more »

*Stock Advisor returns as of February 7, 2025

American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Ally is an advertising partner of Motley Fool Money. Matt Frankel has positions in Ally Financial, American Express, Bank of America, Berkshire Hathaway, and General Motors. The Motley Fool has positions in and recommends Bank of America and Berkshire Hathaway. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold Price Forecast: XAU/USD drifts lower below $2,800   after Trump imposes tariffsGold price (XAU/USD) edges lower to around $2,795 during the early Asian session on Monday.
Author  FXStreet
Feb 03, Mon
Gold price (XAU/USD) edges lower to around $2,795 during the early Asian session on Monday.
placeholder
U.S. March Nonfarm Payroll Preview: Even If Data Aligns with Expectations, Financial Markets May Not Escape the Fate of VolatilityOn 4 April 2025, the United States will release its March Nonfarm Payrolls (NFP) data. The market consensus currently anticipates job growth of 128,000, a decline from February’s 151,000 (Figure 1). W
Author  TradingKey
Apr 02, Wed
On 4 April 2025, the United States will release its March Nonfarm Payrolls (NFP) data. The market consensus currently anticipates job growth of 128,000, a decline from February’s 151,000 (Figure 1). W
placeholder
What Crypto Whales are Buying For May 2025Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
Author  Beincrypto
Apr 21, Mon
Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
placeholder
Gold Price Forecast: XAU/USD attracts some sellers below $3,250 on firmer US DollarThe Gold price (XAU/USD) extends the decline to around $3,245 during the early Asian session on Thursday. The precious metal edges lower to near a two-week low amid easing US-China trade tensions and stronger US Dollar (USD) demand. 
Author  FXStreet
Yesterday 02: 14
The Gold price (XAU/USD) extends the decline to around $3,245 during the early Asian session on Thursday. The precious metal edges lower to near a two-week low amid easing US-China trade tensions and stronger US Dollar (USD) demand. 
placeholder
Ripple Price Forecast: XRP builds bullish momentum as Ripple eyes Circle with $5B acquisition bidRipple’s (XRP) price is consolidating at $2.21 at the time of writing on Thursday, reflecting sideways trading in the wider cryptocurrency market. There is a growing need for XRP to hold above the immediate $2.20 confluence support to validate the potential breakout targeting $3.00.
Author  FXStreet
18 hours ago
Ripple’s (XRP) price is consolidating at $2.21 at the time of writing on Thursday, reflecting sideways trading in the wider cryptocurrency market. There is a growing need for XRP to hold above the immediate $2.20 confluence support to validate the potential breakout targeting $3.00.
goTop
quote