3 Warren Buffett stocks you should buy right away in July 2022.

Key Points

• Since becoming CEO in 1965, Warren Buffett has added more than $610 billion in value for shareholders.
• In a market that is erratic and unreliable, three Buffett equities stand out as extraordinary deals.

Few investors possess the same sense of opportunity for profit as billionaire Warren Buffett. The Oracle of Omaha, as he has come to be known, has served as CEO of the conglomerate Berkshire Hathaway (BRK.A 1.69 percent) (BRK.B 1.64 percent) since 1965.

Through December 31, 2021, he will have generated more than $610 billion in value for shareholders and delivered an aggregate return on his company's Class A shares (BRK.A) of 3,641,613 percent.

Although Buffett is not infallible, following in his footsteps has been a tried-and-true way to exceed the industry standard S & P 500 for more than 50 years.

As we enter the second half of what has been a particularly unpredictable and difficult year for investors, a number of Berkshire Hathaway stocks stand out as outstanding bargains. The next three Warren Buffett stocks can all be reliably purchased in July in large quantities.

Bank of America

Bank of America is the first Buffett investment that is asked to be purchased in July (BAC 1.38 percent).

Generally speaking, bank equities should be avoided when the overall market is experiencing a double-digit fall. But things are different this time. The U.S. central bank has never before aggressively increased interest rates in the face of a falling stock market.

Normal conditions would call for the Federal Reserve to reduce interest rates in order to encourage lending and support the American economy and stock market. This limits the ability for bank companies like BofA to earn net interest income. The Fed has raised its fed funds target rate by 150 basis points in only the last three meetings, however, and as a result, bank stocks are in a good position to gain from a big increase in net interest revenue.

Bank of America is the big bank stock that is most susceptible to interest rates. BofA stated it would produce an additional $5.4 billion in net interest income with a 100-basis-point parallel shift in the interest rate curve in April when it released its first-quarter operating results. The fed funds rate may increase by 300 basis points (or more) by the end of 2022.

The continual investments Bank of America has made in technology and digitization have also helped the company. The number of active digital users increased by 5 million to 42 million over a three-year period. More significantly, 53% of all loan sales in the first quarter were made online or through a mobile app, up from 30% at the same time in 2019. For businesses, digital sales are significantly less expensive than transactions over the phone or in person. This push toward digitization has enabled BofA to merge several of its branches in order to reduce noninterest costs.

Examine Bank of America's valuation in more detail if you need one more compelling reason to invest. While the majority of businesses are projected to experience a short-term fall in earnings, BofA's earnings per share may increase by about 20% in 2023. Bank of America may be Buffett's best investment in his whole portfolio, with shares trading at almost eight times Wall Street's anticipated earnings for the coming year and close to book value.

Activision Blizzard

Activision Blizzard, a gaming industry leader and a second Warren Buffett investment that investors can confidently buy in July (ATVI 0.91 percent).

Activision is under a cloud of uncertainty, like other IT firms. Beyond only historically high inflation, the growing likelihood of a domestic recession, and rising interest rates preventing access to historically low-cost finance, it does, however, have its own special set of worries. Activision has been the target of numerous lawsuits alleging sexual harassment and discrimination at work.

To make matters worse, the firm postponed the launch of many crucial games that were supposed to attract new customers to its ecosystem. The release dates of the action role-playing game Diablo IV and the first-person shooter Overwatch 2 were respectively delayed to the fourth quarter of 2022 and sometime in 2023.

These hiccups have, however, arguably put out the red carpet for shrewd investors. For example, the company's legal battles ought to be finished soon.

Activision had 372 million monthly active users at the end of March (MAUs). MAUs associated with its King subsidiary, the location of Candy Crush, have held up particularly well, despite being down from the same time last year. The second part of 2022 and into 2023 will see the release of several important titles, which should rekindle MAU growth in the Activision market.

Even more significant is the $68.7 billion all-cash offer made by Microsoft (MSFT 1.07%) to acquire Activision Blizzard at $95 per share. With this agreement, Microsoft not only increases its influence in the gaming industry but also intends to use Activision as a springboard for the advancement of its metaverse aspirations. The next generation of the internet, known as the "metaverse," enables connected users to engage with one another and their environment in three-dimensional virtual worlds.

Activision and Microsoft don't seem to have encountered any problems with American regulators so far over the merger. Given that Activision Blizzard's shares ended last week below $78 per share, this is remarkable. If Microsoft completes the transaction as expected in 2022, Activision shareholders may be able to take advantage of a quick 22 percent arbitrage opportunity. For this reason, Warren Buffett's company purchased a roughly 9.5 percent stake in Activision.

General Motors

General Motors was the third and last Warren Buffett stock to be bought en masse in July (GM 1.35 percent).

General Motors (GM), an automobile manufacturer, is the third and last Warren Buffett stock to be purchased this July (GM 1.35 percent).

You might say that in 2022, everything that could go wrong has gone wrong for the auto industry. Supply chains have been hampered by COVID-19 lockdowns and shortages of semiconductor chips in a few international markets, including China. Auto margins are being eroded by historically high inflation on raw materials. Nevertheless, GM is motivated to increase the wealth of long-term investors in spite of these obstacles.

The next significant organic growth opportunity for car stocks has finally materialized after many years of waiting. Consumers and businesses should continue to upgrade or change their vehicles as a result of the electrification of autos for decades to come.

General Motors, on the other hand, has not cut corners. Through 2025, the company plans to invest a total of $35 billion in electric vehicles (EVs), autonomous vehicles, and batteries. It aims to produce at least 1 million EVs annually in North America by the year 2025 and anticipates having two completely dedicated battery plants up and running by the end of the following year. By the end of 2025, 30 new EVs are anticipated to be introduced globally.

Initial data indicates that GM's EV offerings are receiving a lot of attention. About 140,000 retail reservations for the Chevy Silverado EV had already been made, CEO Mary Barra stated in her letter to shareholders when GM reported its first-quarter operating results on April 26. Barra just unveiled the Silverado EV in January 2022.

Additionally, General Motors has a good chance of dominating the Chinese EV market. The world's largest auto market is in China. In addition to having a well-established presence in China—delivering 2.9 million vehicles in both 2020 and 2021—GM also owns the Wuling Hong Guang Mini EV, the best-selling EV in the nation, together with its joint venture partners.

General Motors

is a great value at only five times Wall Street's projected earnings for 2022 and 2023, with a big growth opportunity right on its doorstep.

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