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4 Stocks for Buffett Enthusiasts to Consider

These four firms have wide moats, strong profitability, and reasonable valuations today.

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The best investors operate with a healthy dose of humility. And that’s certainly true of  Berkshire Hathaway’s (BRK.B) Warren Buffett and partner Charlie Munger. For example, the pair has said that many investment opportunities that come their way fall into what Munger has dubbed the “too hard” pile, meaning they can’t be analyzed with any degree of certainty. In essence, they admit what they don’t know and move on. That’s a valuable lesson for individual investors, too. If an investment is opaque or hard to get your head around, rest assured that you can skip it and do just fine investing in what you understand.

Also illustrating a healthy sense of humility, Buffett has been forthright about what Berkshire’s size could mean for its future results. Whereas in the past the firm could more readily get a pop from smaller businesses it took stakes in, Berkshire’s size today means that it can only take meaningful positions in larger businesses, which aren’t likely to grow as rapidly as small or midsize firms. In  his most recent analyst report on Berkshire Hathaway, Morningstar senior equity analyst Greggory Warren gave plaudits to the firm’s growth from 2014, but asserts that “given the current size of its operations, ...the firm will struggle to generate similar levels of growth longer term.”

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Christine Benz does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.