1 cheap Warren Buffett stock to buy now

Berkshire Hathawayit is (BRK.A -0.09%) (BRK.B 0.26%) CEO Warren Buffett undoubtedly has a strong sense of value. Berkshire’s book value per share, which is often used as an indicator of the intrinsic value of the diversified holding company, has grown at a meteoric compound annual growth rate of 18.7% over the period from 1965 to 2021.

And as a direct result of Buffett’s laser focus on owning big chunks of high-value companies, Berkshire shares have generated a whopping 3,641,613% total capital return for shareholders from 1964 to 2021. Buffett , in short, is the undisputed king of bargain hunting.

Which Berkshire farms are the hottest bargains right now? I think the titan of e-commerce Amazon (AMZN 0.16%) is easily Buffett’s most undervalued stock right now. Here’s why.

Image source: Getty Images.

Pandemic headwinds have hurt the tech giant’s core business

E-commerce giant Amazon has lost about a third of its value in the previous 12 months. Amazon shares have come under heavy pressure lately due to the company’s decision to consolidate in order to meet the surge in demand during the early days of the pandemic.

As consumers have gradually migrated to shopping in physical stores, Amazon has been forced to scale its bloated online retailer operation. The net result of this error is that Amazon posted its first net loss in seven years in the first quarter of 2022.

However, lackluster performance from Amazon’s core business segment was arguably overstated by the bears. After all, the company is still seeing healthy levels of revenue growth in other key segments such as its advertising unit, cloud computing division and subscription services. In line with this theme, Amazon is expected to return to double-digit revenue growth as early as next year.

Amazon’s healthcare unit is grossly underrated

The real reason to hoard Amazon shares at these levels, however, hasn’t even debuted in most analyst reports. In short, Amazon’s steady move into the $800 billion US healthcare business has the potential to be a major catalyst for the company’s stock price within a few years.

In 2018, Amazon launched its plan to disrupt the beleaguered US healthcare space into high gear with its acquisition of online pharmacy PillPack. Since then, the company has developed a telemedicine program known as Amazon Care. His fledgling telemedicine business recently received additional support through a partnership with Teladoc Health aimed at providing access to healthcare through Alexa-enabled devices. Amazon’s nearly $4 billion acquisition 1Life Health carealso known as One Medical, will also expand its virtual and in-person primary healthcare capabilities earlier this month once the deal closes later this year.

The bottom line is that Amazon’s premier logistics platform, integrated digital ecosystem, unparalleled access to consumer data, and vast financial resources place it in an ideal position to revolutionize healthcare in the United States. United. Now, the market clearly hasn’t given much weight to this possibility – as evidenced by Amazon shares which are currently trading at a meager forecast of twice 2023 revenue. Savvy investors, however, will want certainly consider the enormous growth prospects of Amazon’s steady march into healthcare.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. George Budwell has no position in any of the stocks mentioned. The Motley Fool holds and recommends Amazon, Berkshire Hathaway (B shares) and Teladoc Health. The Motley Fool recommends the following options: $200 long calls in January 2023 on Berkshire Hathaway (B shares), $200 short puts in January 2023 on Berkshire Hathaway (B shares) and short calls of $265 in January 2023 on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

About Robert Wright

Check Also

MGM Resorts and Others Urge FERC to Reject Incentives for NV Energy’s $2.5 Billion Greenlink Transmission Project

Diving brief: Nevada taxpayers’ attorney Public Citizen and MGM Resorts International and Caesars Enterprise Services …