3 Warren Buffett Stocks to Buy Hand Over Fist in November

The article highlights three stocks—DaVita (DVA), Kraft Heinz (KHC), and Pool Corporation (POOL)—as undervalued opportunities with long-term growth potential, each having significant Berkshire Hathaway ownership. DaVita, trading at a discounted 10x forward earnings despite projected 11-17% earnings growth for 2025-2026, is seen as cheap due to current bearish sentiment. Kraft Heinz, offering a 6.5%+ dividend yield and trading at 9x forward earnings, is poised for value creation through a planned corporate split. Pool Corporation, a recent Berkshire acquisition, is expected to benefit from normalizing demand for pool maintenance products, supporting its valuation and dividend growth despite current earnings pressure.

Analysis

The article highlights DaVita (DVA), Kraft Heinz (KHC), and Pool Corporation (POOL) as undervalued investment opportunities, each with significant Berkshire Hathaway ownership, signaling a 'Buffett seal of approval.' These companies are currently out of favor on Wall Street, trading at attractive valuations despite their underlying quality and potential for future appreciation as market sentiment improves. This strategy focuses on identifying strong businesses facing temporary headwinds.

DaVita trades at a heavily discounted 10 times forward earnings, despite sell-side analysts forecasting 11% and 17% earnings growth for 2025 and 2026, respectively. This growth is supported by aggressive share repurchases and organic international expansion, contrasting with current bearish sentiment driven by recent disappointing quarterly results. Kraft Heinz offers a compelling 6.5%+ forward dividend yield and trades at just 9 times forward earnings, a substantial discount to peers like General Mills (14x) and Kellanova (21x), with a planned corporate split expected to unlock significant value.

Pool Corporation, a recent Berkshire acquisition, is valued at approximately 27 times forward earnings, anticipating a recovery from its trailing 12-month EPS of just under $11, which is below the $16 average from 2021-2023. Normalizing demand for new pools is expected to drive steady growth in its higher-margin maintenance product sales, supporting its valuation and potential for continued dividend growth. The common thread among these selections is their current market undervaluation relative to their long-term growth prospects and strategic catalysts.

Key Decisions for Investors

• Consider DaVita for its heavily discounted forward earnings multiple relative to strong projected growth and long-term industry tailwinds in chronic kidney disease.
• Evaluate Kraft Heinz for its high forward dividend yield and the potential for significant value creation from its planned corporate restructuring, which could narrow its valuation gap with peers.
• Monitor Pool Corporation for signs of demand normalization in the pool construction and maintenance sector, as this recovery is critical to validating its current forward valuation and supporting sustained earnings and dividend growth.