Warren Buffett's Berkshire Hathaway has already made a substantial investment in Insurance Australia Group Ltd (ASX: IAG) and the famed investor has already declared that more significant ASX investments are to follow.
So what stocks might Buffett be attracted to?
Apart from the pre-requisites of having great management, rock-solid balance sheets and understandable business models that fit within his circle of competence, Buffett would also appear to be targeting leading established franchises that offer exposure to and growth potential in Asia.
Here are three more stocks that Buffett might consider:
Australia and New Zealand Banking Group (ASX: ANZ) – Buffett already noted that investors can expect one of the major banks to be on his buy list over the next few year. The lead candidate could be ANZ Bank considering its Asian region strategy leads all of its major banking peers.
Ansell Limited (ASX: ANN) – Buffett has always been a fan of the branded fast-moving consumer goods (FMCG) category having owned a range of companies including Gillette, Wrigley and The Coca-Cola Company.
Ansell is another leading global FMCG brand which also has a growing presence in Asia. In China, the industrials division experienced growth of 36%, while the sexual wellness division achieved growth of 14% growth in China.
Pact Group Holdings Ltd (ASX: PGH) – As a leading manufacturer of rigid plastics, Pact Group provides the packaging which is crucial to the FMCG manufacturing and distribution process. The company has relatively consistent revenues and an entrenched customer base – two further criteria that Buffett looks for.
With major operations in Australia and New Zealand and an overseas expansion effort underway which is concentrated on the Asian region – the group has just completed building a factory in Indonesia and also has operations in Singapore, Thailand, Philippines and China – Pact Group could be a third stock which meets Buffett's high standards.
