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Validea's Top Consumer Discretionary Stocks Based On Warren Buffett - 5/7/2024

The following are the top rated Consumer Discretionary stocks according to Validea's Patient Investor model based on the published strategy of Warren Buffett. This strategy seeks out firms with long-term, predictable profitability and low debt that trade at reasonable valuations.

MCDONALD'S CORP (MCD) is a large-cap growth stock in the Restaurants industry. The rating according to our strategy based on Warren Buffett is 68% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: McDonald's Corporation is a foodservice retailer with over 40,000 locations in over 100 countries. The Company's segment includes United States, International Operated Markets and International Developmental Licensed Markets & Corporate. The International Operated Markets segment is comprised of markets, or countries in which the Company operates and franchises restaurants, including Australia, Canada, France, Germany, Italy, Poland, Spain and the United Kingdom. This segment is over 89% franchised. The International Developmental Licensed Markets & Corporate segment is comprised of developmental licensee and affiliate markets in the McDonald's system. This segment is around 98% franchised. Its menu features hamburgers and cheeseburgers, the Big Mac, the Quarter Pounder with Cheese, the Filet-O-Fish, and several chicken sandwiches like the McChicken, McCrispy and McSpicy. Approximately 95% of McDonald's restaurants worldwide are owned and operated by independent local business owners.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

Detailed Analysis of MCDONALD'S CORP

TOLL BROTHERS INC (TOL) is a large-cap value stock in the Construction Services industry. The rating according to our strategy based on Warren Buffett is 68% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Toll Brothers, Inc. is a builder of luxury homes. The Company designs, builds, markets, sells and arranges financing for an array of luxury residential single-family detached home, attached home, master-planned, and urban low-, mid-, and high-rise communities. The Company operates its own architectural, engineering, mortgage, title, land development, insurance, smart home technology and landscaping subsidiaries. It also develops master-planned and golf course communities as well as operate, in certain regions, its own lumber distribution, house component assembly and manufacturing operations. The Company also caters to urban and suburban renters under the brand names Toll Brothers Apartment Living and Toll Brothers Campus Living. It designs, builds, markets, and sells high-density, high-rise urban luxury condominiums with third-party joint venture partners through Toll Brothers City Living (City Living). The Company operates in approximately 24 states and in the District of Columbia.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

Detailed Analysis of TOLL BROTHERS INC

O'REILLY AUTOMOTIVE INC (ORLY) is a large-cap growth stock in the Auto & Truck Parts industry. The rating according to our strategy based on Warren Buffett is 68% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: O'Reilly Automotive, Inc. is a specialty retailer of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, serving both the do-it-yourself and professional service provider markets. The Company's stores carry various product line, including new and remanufactured automotive hard parts and maintenance items, such as alternators, batteries, brake system components, belts, chassis parts, driveline parts, engine parts, fuel pumps, hoses, starters, temperature control, water pumps, antifreeze, appearance products, engine additives, filters, fluids, lighting, oil and wiper blades, and accessories, such as floor mats, seat covers and truck accessories. Its stores offer various enhanced services and programs to its customers, such as battery diagnostic testing; battery, wiper and bulb replacement; custom hydraulic hoses, and drum and rotor resurfacing. It operates approximately 6,157 stores across 48 states in United States, Puerto Rico and Mexico.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

Detailed Analysis of O'REILLY AUTOMOTIVE INC

About Warren Buffett: Warren Buffett is considered by many to be the greatest investor of all time. As the chairman of Berkshire Hathaway, Buffett has consistently outperformed the S&P 500 for decades, and in the process has become one of the world's richest men. (Forbes puts his net worth at $37 billion.) Despite his fortune, Buffett is known for living a modest lifestyle, by billionaire standards. His primary residence remains the gray stucco Nebraska home he purchased for $31,500 nearly 50 years ago, according to Forbes, and his folksy Midwestern manner and penchant for simple pleasures -- a cherry Coke, a good burger, and a good book are all near the top of the list -- have been well-documented.

About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.