Warren Buffett and his firm Berkshire Hathaway have made some fascinating moves in late 2020 and early 2021. Meanwhile, the Oracle of Omaha’s favourite market measurement has flashed warning signs. The Buffett indicator, which takes the combined market cap of a given nation and pits it against GDP, has soared to a record high in February. In late February, investors have been treated to a bout of volatility that has harassed the crypto space and hurt technology stocks. Today, I want to look at four TSX stocks that Warren Buffett would look to buy and sell in this market. Let’s dive in.
In the third quarter of 2020, Berkshire unveiled its growing stake in several top pharmaceutical firms. It added shares in stocks like Merck and Pfizer. This came as no surprise ahead of the much-anticipated vaccine rollout. Canada is light on vaccine-focused stocks, but there are top TSX stocks that are well-positioned to thrive in the months ahead.
NorthWest Healthcare REIT (TSX:NWH.UN) has proven to be a dependable defensive stock during the COVID-19 pandemic. This real estate investment trust offers access to a portfolio of high-quality global healthcare real estate. Shares of Northwest have climbed 1.9% in 2021 so far. Investors can expect to see its final batch of 2020 results in early March.
This TSX stock last had a favourable price-to-earnings ratio of 14. Better yet, it offers a monthly dividend of $0.067 per share. That represents a strong 6.3% yield.
Warren Buffett ditched his shares of Restaurant Brands (TSX:QSR)(NYSE:QSR) in the summer of 2020. However, I’m going to play the part of Buffett from early 2020 and recommend RBI today. The restaurant industry is in a great position to bounce back as Canada and the United States reopen. Canada is on a slower track, but it has ramped up its vaccine rollout into late February.
Shares of RBI have climbed 1.1% in 2021 so far. The TSX stock is down 6.2% year over year. Popeyes and Burger King have been robust sources of growth, while Tim Hortons continues to lag. RBI stock last paid out a quarterly dividend of $0.53 per share, representing a 3.5% yield.
Warren Buffett has hurled some ferocious criticism bitcoin’s way in recent years. He went as far to call the top digital currency “rat poison” in an interview. Bitcoin enjoyed a massive bull run in the latter half of 2020 into the early part of 2021. However, it suffered a steep retreat from its perch this week. Bitcoin officially entered a bear market in late February.
Investors should avoid crypto miners like the TSX stock Hut 8 Mining in this environment. Shares of Hut 8 Mining have shot up over 860% in the past year. The crypto space is frothy right now, and stocks linked to bitcoin’s valuation are poised to suffer in this bear market.
Warren Buffett has historically strayed from gold investments. Berkshire Hathaway shed much of its new gold stake in Q3 2020. The spot price of gold has fallen sharply in the face of rising bond yields. Yamana Gold, a Toronto-based gold producer, has seen its stock plunged 16% month over month. Time will tell whether this is a correction or a renewed bear market for gold. Investors should beware of TSX stocks in the precious metals space right now.
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Fool contributor Ambrose O’Callaghan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares). The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS and RESTAURANT BRANDS INTERNATIONAL INC and recommends the following options: short January 2023 $200 puts on Berkshire Hathaway (B shares), short March 2021 $225 calls on Berkshire Hathaway (B shares), and long January 2023 $200 calls on Berkshire Hathaway (B shares).
The post Warren Buffett: 4 TSX Stocks to Buy and Sell Today appeared first on The Motley Fool Canada.
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