SmartMoney: What Would Warren Buy?

THESE ARE SCARY TIMES on Wall Street. There's fear of inflation. Fear of Middle East tumult. Fear of slowing economic growth. But savvy investors have a different view: They call it Buffett Time.......

Berkshire Hathaway
......Based on his estimate of profit growth at the various companies in the conglomerate, plus Berkshire's $42 billion cash hoard, Tilson believes the stock is undervalued by 30%. That's what we call a margin of safety.......

HSBC
......As they have with the other megabanks, investors have dismissed HSBC as stodgy and boring. But Buffett acolytes know that a conservative culture and straightforward style usually lead to lasting returns. "There are no glossy photographs in their annual report," Winters says.....

American Express
.....AmEx also has a wealthier customer base than Visa, MasterCard and Discover, and a virtual lock on the corporate sector. "If you are going to do any business with corporations, you really need to accept the American Express card," says Greenblatt......

UPS
.....UPS has been developing its extensive logistics network, which includes every address in the United States, for nearly 100 years, and it's expanding around the world. "It's basically a proxy on global trade," Auxier says......

Scotts Miracle-Gro
.......Scotts's stable of brands is impeccable. Each one is the leader in its category, with a collective market share of more than 50%.........

Mohawk Industries
........A mainstay of Buffett's investment strategy is to buy simple businesses that make things people can easily understand. A prime example is Mohawk Industries, which has a duopoly on the flooring business alongside Buffett holding Shaw Industries........

Wal-Mart
......Based on 7% to 9% in new-store growth and 1% to 3% in same-store sales, Tilson estimates Wal-Mart can deliver about 10% sales growth over the next five years and 12% annual earnings-per-share growth. Last year Wal-Mart earned $11.2 billion, or $2.68 per share, on sales of $316 billion. At 14 times earnings estimates — near its lowest P/E in a decade — Wal-Mart stock might just be as much of a bargain as its merchandise........

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