Should You Buy Warren Buffett's Top 3 Stocks of 2026 So Far?

Buffett-linked holdings Mitsubishi and Marubeni are highlighted as major 2026 winners, with Mitsubishi up about 45% year to date and Marubeni benefiting from share repurchases and dividend growth. DaVita is also up around 30% YTD after beating Q4 revenue and earnings estimates and issuing strong full-year 2026 guidance, though Berkshire recently trimmed the position. The article is broadly positive on the companies' fundamentals and capital returns, but it is mainly commentary rather than new market-moving information.

Analysis

The common thread is not “Buffett stocks” per se, but capital discipline in cash-generative franchises at a point in the cycle where buybacks are becoming a larger driver of EPS than operating growth. That matters because repurchases at steady valuations can mechanically compress market-perceived earnings multiples even if end-demand is only mid-single digits, which is why these names can keep working in a tape that still rewards visible FCF over narrative. The real second-order beneficiary is any supplier ecosystem tied to LNG, copper, and outsourced healthcare services: investors are paying for pricing power plus duration of cash returns, not just headline growth.

DaVita is the most interesting setup because the market is implicitly underpricing the optionality from guidance credibility and capital returns. A low-teens forward multiple on a business with recurring utilization and reimbursement visibility creates room for a further rerating if execution remains clean over the next 2-3 quarters; the main risk is not demand but regulatory or reimbursement compression, which would hit the multiple before earnings show it. The Elara investment is a subtle tell: management is trying to extend the addressable care platform, which can support sentiment even if core dialysis growth stays modest.

For the Japanese trading houses, the move is increasingly self-reinforcing: stronger commodity linkage plus persistent buybacks reduces free float and amplifies price sensitivity to incremental positive macro prints. The contrarian risk is that investors may be extrapolating a structurally higher growth rate from what is still a diversified conglomerate model; if LNG/copper cools or FX moves against them, these names can de-rate quickly despite shareholder-friendly capital allocation. In that sense, the trade is less about commodity beta alone and more about whether management can keep converting balance sheet strength into per-share compounding for another 12-18 months.

Key Decisions for Investors

• Long DVA on pullbacks over the next 2-6 weeks; target a rerating to a mid-teens forward multiple if guidance holds, with downside centered on reimbursement/regulatory headlines rather than fundamentals.
• Use a DVA covered-call overlay for existing longs: sell 1-2 month out-of-the-money calls to monetize elevated sentiment while retaining core exposure to EPS revisions.
• Long BRK.B as a proxy for disciplined capital allocation, but size it as a lower-volatility compounder rather than a catalyst trade; expect slower upside, but better drawdown characteristics if the market rotates out of momentum.
• Pair trade: long DVA / short a basket of higher-multiple healthcare services names with weaker capital returns; thesis is that buybacks plus recurring cash flow should outperform in a de-risking tape over 3-6 months.
• Avoid chasing the Japanese trading houses after the move; if entered, use a 12-month horizon and treat them as commodity-and-FX-sensitive cash return stories, with stops if LNG/copper weaken or yen strength becomes persistent.