Buy like Buffett in 2016 with these 3 blue-chip ASX shares

Investing legend Warren Buffett has over the decades counselled on many aspects of investing. His annual letters are a treasure trove of information and the only true way to soak up all of Buffett’s generous advice is to spend the hours – enjoyable and enlightening as they are – reading these letters from start to finish.

One important point for investors attempting to follow in Buffett’s footsteps to remember is that there are many ways to apply his thinking…

For example, just because a company such as SEEK Limited (ASX: SEK) may not sit inside Buffett’s “circle of competence”, that doesn’t mean it’s not inside your circle of competence and potentially still a Buffett “type” stock.

With that in mind, here are 3 blue-chip shares which arguably are Buffett “type” businesses.

  1. Ansell Limited (ASX: ANN) – Buffett’s always been a fan of fast moving consumer goods (FMCG) business models. One of the beauties of a FMCG model is the recurring revenues they can generate through customer loyalty. Ansell is arguably one of the best ASX-listed FMCG stocks available, which not only has market-leading positions domestically but also increasingly in select global markets as well.
  2. Aurizon Holdings Ltd (ASX: AZJ) – It was not that long ago that Buffett acquired the US-based rail freight company BNSF. One of the attractions was the long and predictable streams of earnings which this infrastructure business possessed. Aurizon with its long-term haulage contracts and entrenched market positions looks to possess similar qualities to BNSF.
  3. Wesfarmers Ltd (ASX: WES)Buffett is on record as stating that one of his biggest investment misses was not investing in retailing giant Wal-Mart Stores Inc. It’s an understandable statement when you look at the returns from Wal-Mart stock over the past 40 years. While the Wesfarmers-owned retail businesses don’t have the growth profile of Wal-Mart, they are similar in certain respects including top quartile operating margins and market-leading positions.

2 More Top ASX Shares Warren Buffett Would Love...

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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