Both like these 3 stocks

Some people's achievements in their chosen profession transcend the industry they work in and make them a household name. It's safe to say that even those unfamiliar with the world of investing are familiar with Warren Buffett.

Buffett embodies the term “legendary investor” perhaps more than anyone else, and given his decades of near-unrivaled stock-picking success, that's a well-deserved nickname.

For those looking to emulate a fraction of Buffett's success and want to stay ahead of the game, it makes sense to see what stocks are currently in the Oracle of Omaha's portfolio. And when some of these stocks are also backed by a top Wall Street bank like Goldman Sachs, it sends an even stronger message that the time may be right for a top-up.

With that in mind, we scoured the TipRanks database for information on three stocks currently recommended by both Buffett and the banking giant. Let's look at the details.

Occidental Petroleum (OXY)

For our first Buffett/Goldman-backed name, we turn to the energy sector and multinational Occidental Petroleum. Based in Houston, Texas, the company is engaged in the exploration, production and marketing of oil and gas. Occidental has been in business since 1920 and has grown into one of the largest independent oil and gas producers in the United States. The company also has global operations, with significant operations not only in the United States, but also in the Middle East and Latin America.

With its expertise and global reach, the company benefited enormously from rising energy prices last year, and like many names in one of the few thriving sectors, OXY stock had a stellar 2022, posting a 117% gain. But his performance has been more muted this year.

Due to lower volumes and prices for crude oil, liquid natural gas and domestic natural gas, first-quarter revenue fell 14.9% year over year to $7.26 billion, missing Street's guidance by $110 million. Profits also fell, with adj. Earnings per share fell 48% to $1.09, just below the consensus estimate of $1.37.

Though free cash flow fell 33% to $1.69 billion in the first quarter, that hasn't halted the company's stock-buying activity. During the quarter, Oxy repurchased $752 million of stock, staying on track to fulfill its $3 billion 2023 buyback program.

Despite the poor performance, to say that Buffett remains an OXY fan is a bit of an understatement. OXY stocks make up a large portion of his portfolio, and Buffett bought an additional 17,355,469 shares during the first quarter. Notably, he proved his confidence again in May by buying about 5.62 million more shares. As it stands, Buffett's ownership of roughly 217.3 million shares of OXY equates to a staggering $12.73 billion, which translates to an impressive 24.4% stake in the company.

Buffett's unwavering belief in OXY is backed by Goldman Sachs analyst Neil Mehta, who shares a positive view of the company. Mehta, a 5-star analyst, cites some key reasons why OXY looks promising: “We remain positive on OXY for its attractive FCF generation potential (13% FCF yield vs. 9% for diversified peers), encourage robust share buybacks and enable the company to redeem its preferred stock and simplify its corporate structure (a focus of the company this year). Our positive FCF outlook is supported by mid-cycle chemical cash flows and we continue to expect positive upstream results from OXY's Permian operations.”

Those comments support Mehta's buy rating, while its $77 price target leaves room for a 31% 12-month yield. (To view Mehta's track record, click here)

Elsewhere on Wall Street, the stock receives an additional 7 each of “buy” and “hold” for a consensus rating of “moderate buy.” The forecast calls for a 22% year-over-year gain with the average target at $71.67. (See OXY stock forecast)

charter communication (CHTR)

Now let's move from the energy sector to a major player in the telecommunications industry. Charter Communications is one of the largest telecommunications and mass media companies in the United States. In fact, it's the country's second largest cable operator in terms of subscribers. Charter offers a wide range of offerings to private and business customers, including cable television, high-speed Internet and telephone services. Under the Spectrum brand name, the company serves millions of customers in 41 states.

In addition to its core services, Charter has also entered the streaming market with its video-on-demand platform, Spectrum TV, which offers subscribers a wide selection of movies and TV shows.

Despite a lack of expectations on the earnings profile in last month's 1Q23 report, investors seem to have preferred to focus on the positives. Earnings per share of $6.65 came in below consensus expectations of $7.50, but revenue rose 3.4% year over year to $13.65 billion, beating Street's guidance $40 million. Additionally, Adjusted EBITDA increased 2.6% year-over-year to $5.4 billion. The company also reported a record 686,000 new mobile subscriptions during the quarter.

As for Buffett's holdings, he owns a portion of CHTR stock. His total holding of 3,828,941 shares is currently worth over $1.27 billion.

The telecom giant also has the support of Goldman Sachs analyst Brett Feldman, who expects some progress to be encouraging for shareholders.

“We remain confident of CHTR's ability to deliver LSD EBITDA growth in 2023, with growth accelerating in the second half of 2023 as operating expenses ease… We continue to expect CHTR to continue its share buybacks over the next five.” years to come and incrementally increase.” at a time of heightened capital spending, based on our forecast of sustained EBITDA growth, which should generate additional borrowing capacity that we believe CHTR will use to fund buybacks. As such, we expect CHTR to repurchase nearly $40 billion worth of stock over the next five years, which is nearly 60% of its market cap,” Feldman said.

Accordingly, Feldman rates CHTR stock with a buy rating and a price target of $450. The implications for investors? Possible 35% upside from current levels. (To view Feldman's track record, click here)

Goldman Sachs' view represents the bulls here; the Street shows a clear split in reviews for CHTR. Out of the 16 current analyst ratings, there are 7 “buy”, 8 “hold” and 1 “sell”, which corresponds to a consensus rating of “moderate buy”. Given the average target of $469.65, investors will see a 41% return in one year. (See CHTR stock forecast)

Marsh & Mclennan Company (MMC)

Now, let's revisit a globally recognized professional services firm that has been recommended by both Buffett and Goldman Sachs. Marsh & McLennan is a leading player in this field, specializing in risk management, insurance brokerage and advisory services. The Company operates through its four principal subsidiaries: Marsh, Guy Carpenter, Mercer and Oliver Wyman. With its expertise in these diverse sectors, Marsh & McLennan is well positioned to provide comprehensive solutions to its clients on a global scale.

Marsh provides insurance brokerage and risk management solutions to its clients, helping them manage complex risks while protecting their assets. Guy Carpenter focuses on reinsurance brokerage and strategic advisory services, helping insurers to manage their reinsurance needs. Mercer specializes in executive search and offers a wide range of services related to employee benefits, talent management and retirement planning. Finally, Oliver Wyman provides management consulting services and assists clients in various industries with strategic planning, risk assessment and operational improvement.

MMC has been in business for more than 150 years and has established itself as a trusted global name. This was also evident in the company's most recent reporting quarter — Q1 2023. Supported by a strong performance of its risk and insurance services, revenue rose 6.3% year over year to $5.9 billion, beating guidance by $40 million. Adj. Earnings per share of $2.53 improved from $2.30 in the prior-year period while exceeding Street's expectations by $0.06. During the quarter, the company repurchased 1.8 million shares for $300 million.

Buffett enters the frame over the 404,911 MMC shares he currently holds. At the current price, these are worth over $70.58 million.

The global services company also has a fan: Goldman analyst Robert Cox. As Cox reads through the Q1 printout, he finds many reassuring points that keep him going.

“We view MMC's Q1 2023 results as further evidence that the company is capitalizing on strong P&C broker terms, talent investments are delivering results and margins are expected to continue to grow significantly as further cost savings are identified,” stated the analyst. “The broad-based RIS organic growth topped this quarter, combined with our expectation of a slight deceleration in P&C price and exposure growth, prompts us to lower our estimate for FY23 organic RIS growth by 50 basis points to +9.7% (+7.1% excluding fiduciary investment income).”

Converting those thoughts into notes and numbers, Cox categorizes MMC stock as a “buy,” backed by a $202 price target. Should that figure be reached, investors expect upside potential of 16% from current levels. (To view Cox's track record, click here)

Looking at the consensus breakdown, 3 analysts join Cox in the bull camp and with another 6 hold and 1 sell, the stock earns a consensus rating of Moderate Buy. At $189.80, the average target suggests the stock has room for about 9% growth in the coming months. (See MMC Stock Forecast)

For great stock trading ideas at attractive valuations, visit TipRanks' Best Stocks to Buy, a newly launched tool that brings together all of TipRanks' stock insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is for informational purposes only. It is very important to do your own analysis before investing.

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