Want to Beat Warren Buffett? Look at These 2 Hot Stocks

Warren Buffett, arguably the greatest investor of all time, has bought companies across nearly every sector of the economy. The conglomerate he runs, Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B), holds a stock portfolio worth over $300 billion, as well as an array of wholly owned subsidiaries across the energy, railroad, retail, and insurance industries, among others.

One attribute that Buffett famously looks for in those investments is a strong economic moat — a clear competitive advantage that would be difficult for a rival to replicate.

Yet he missed the boat on recognizing two businesses that have just such moats: Chipotle Mexican Grill (NYSE:CMG) and PayPal Holdings (NASDAQ:PYPL). Both operate in industries Buffett is familiar with, and both stocks have crushed the returns of Berkshire Hathaway over the past one-, three-, and five-year periods. 

The case for Chipotle Mexican Grill

Having previously invested in Restaurant Brands International, Buffett is clearly familiar with the restaurant industry. But Berkshire never bought shares in fast-casual leader Chipotle, which has seen its stock price soar 326% over the past five years. 

Chipotle's ongoing success in large part comes from its scale. With 2,853 locations, the company is able to spend more on marketing, acquire better real estate, and secure favorable terms with food suppliers compared to independent restaurants and smaller chains. The brand is widely recognized for high-quality and affordable Tex-Mex items, and its reputation should serve the company for a long time. 

Even as most of the restaurant industry took a major hit due to the pandemic, Chipotle has thrived. Its revenue grew by double-digit percentages year over year in each of the past four quarters, including a 38.7% increase in the most recent period. And same-store sales, a key performance indicator for any retail-based business, jumped by 31.2% in Q2. It's worth pointing out that this is compared to a weak period in Q2 2020, when restaurants were temporarily closed. But even on a two-year basis, revenue grew at an annual rate of 14.9% while net income more than doubled, which is still impressive. 

Chipotle's digital prowess has been a key factor boosting its results over the past 18 months. Hungry customers can order up their favorite burritos or bowls via its mobile app, its website, or through third-party delivery services. In the second quarter, digital sales accounted for nearly half of all revenue. And the chain's rewards program now has 23 million members who provide it with an extremely valuable tool for driving customer engagement. 

CEO Brian Niccol believes that Chipotle can one day operate 6,000 locations in North America — more than twice as many as it operates today. This seems completely reasonable given the company's remarkable growth thus far, its proven pricing power, and its outstanding restaurant-level margin of 24.5% (a near six-year high). 

You'll want to consider adding this market-beating stock to your portfolio. 

The case for PayPal Holdings

Buffett is also familiar with the payments space: Berkshire Hathaway currently owns stakes in the two big payments networks, Visa and Mastercard, worth a combined $3.8 billion. But he missed out on PayPal. And in the years since it was spun off from eBay in July 2015, its stock is up more than seven-fold.

Full story on Fool.com

Buffett's #1 Investment

Revealed: Warren Buffett’s little-known $0.16 trade that could see gains of up to 183% in one day if action is taken quickly.
Enter your email address to receive this company’s name and ticker symbol for free. 

By submitting your email address, you give Profitable News and Morning Bullets permission to deliver the report or research you’re requesting to your email inbox. You can unsubscribe at any time. To review our privacy policy, click here: Privacy Policy | How it Works

#1 Stock To Beat The Upcoming Inflation Crisis

Whether you’re interested in turning a profit, or simply protecting your retirement, it’s critical you pay attention, now.

By submitting your email address, you give Profitable News and Morning Bullets permission to deliver the report or research you’re requesting to your email inbox. You can unsubscribe at any time. To review our privacy policy, click here: Privacy Policy | How it Works

#1 Taas Stock of The Decade

Investing legend Whitney Tilson says there’s a huge new tech trend coming – and he’s revealing his #1 pick for free.
Enter your email address to receive this company’s name and ticker symbol for free.

By submitting your email address, you give Profitable News and Morning Bullets permission to deliver the report or research you’re requesting to your email inbox. You can unsubscribe at any time. To review our privacy policy, click here: Privacy Policy | How it Works

Forget TSLA Buy This Supplier

Elon Musk’s Next Big Bet Could Send This Tiny Supplier Soaring.
Enter your email address to receive this company’s name and ticker symbol for free.

By submitting your email address, you give Profitable News and Morning Bullets permission to deliver the report or research you’re requesting to your email inbox. You can unsubscribe at any time. To review our privacy policy, click here: Privacy Policy | How it Works

The "Nano Powder" Battery Tech
Set To Soar

Revolutionary “Nano-Powder” to set off 20,300% market surge, and our top pick stands to soar as a result.
Enter your email address to receive this company’s name and ticker symbol for free.

By submitting your email address, you give Profitable News and Morning Bullets permission to deliver the report or research you’re requesting to your email inbox. You can unsubscribe at any time. To review our privacy policy, click here: Privacy Policy | How it Works

#1 Biotech Stock of This Generation

Set to disrupt global industries worth a total of $64 trillion, this tiny $2 stock could very soon be $5, $10 … even $20 or more!-

Enter your email address to receive this company’s name and ticker symbol for free.

By submitting your email address, you give Profitable News and Morning Bullets permission to deliver the report or research you’re requesting to your email inbox. You can unsubscribe at any time. To review our privacy policy, click here: Privacy Policy | How it Works

Grab 20,000 IPO's With $25

Investors who get in now could see a windfall from the opening of a $2.1 Quadrillion Economy.
Enter your email address to gain access on how you can get in on this investment before it ignites the biggest financial event since the birth of the stock market.

By submitting your email address, you give Profitable News and Morning Bullets permission to deliver the report or research you’re requesting to your email inbox. You can unsubscribe at any time. To review our privacy policy, click here: Privacy Policy | How it Works

#1 Stock of The Decade

Investors who get in on this tiny $5 stock stand to transform every $500 invested into $1.5 million.
Enter your email address to receive this company’s name and ticker symbol for free.

By submitting your email address, you give Profitable News and Morning Bullets permission to deliver the report or research you’re requesting to your email inbox. You can unsubscribe at any time. To review our privacy policy, click here: Privacy Policy | How it Works