3 Warren Buffett Stocks That Are Screaming Buys Right Now

Are you looking to load up on some new long-term stocks? There are myriad ways of finding them. One of the best means of doing so, however, is still poaching a few of Warren Buffett's picks. They don't call him the Oracle of Omaha for nothing, after all.

With that as the backdrop, here's a closer look at three of Buffett's Berkshire Hathaway portfolio's holdings. Most of Berkshire's picks are solid long-term names. However, these particular three picks are screaming buys right now largely because they're undeservedly beaten down.

1. Occidental Petroleum

Contrary to a common assumption, oil isn't a dying business. It's still growing, in fact. The United States Energy Information Administration predicts liquid fuels derived from crude oil will still be the planet's top source of energy production as far down the road as 2050. The world's just not ready to make a sweeping shift to alternative energy.

The oil industry will continue evolving during this time, however. Namely, oil companies will become smarter about keeping themselves in business.

Enter Occidental Petroleum (NYSE: OXY) . It is not the energy business's most familiar name. There's a reason Buffett loves it enough to continue buying it, though. Not only is it well-versed when it comes to fracking, the company is willing to restructure itself in order to optimize its operation . As Buffett wrote of Occidental's CEO Vicki Hollub in a 2023 letter to Berkshire Hathaway shareholders, "Vicki does know how to separate oil from rock, and that's an uncommon talent, valuable to her shareholders and to her country."

Then there's the other, unexpected reason Buffett's Berkshire now owns nearly 28% of Occidental (a 255-million-share, $14.7 billion stake). That's its work on the carbon-capture front. Simply put, carbon capture is the process of removing carbon -- in the form of carbon dioxide -- from the ambient air so it doesn't damage the environment. The science is still relatively new and not yet fully refined. It does work, though, and it is being commercialized.

An outlook from Polaris Market Research suggests that the annual Direct Air Capture Systems (DACS) market is set to grow at an average yearly pace of 58% through 2032, when it will be worth nearly $4 billion (although it's an estimate that could ultimately prove too conservative). Whatever the case, the tech has the potential to prolong the planet's usage of oil.

Occidental Petroleum shares are down 16% from April's high, largely in step with crude oil's price pullback. That's only a temporary swoon, though -- for both of them.

2. Bank of America

You're likely already aware that Berkshire shed a big piece of its stake in Bank of America (NYSE: BAC) just a few weeks ago. Namely, so far, it's sold nearly $4 billion worth of the bank stock . It's certainly conceivable that more could be dumped in the near future, too.

Investors are interpreting the move as a red flag, and understandably so. After all, BofA's second-quarter results weren't exactly thrilling. Net income fell on a year-over-year basis despite modest revenue growth. Falling interest rates are making lending less profitable at a time when borrowers are struggling to continue making payments on their outstanding loans; charge-offs on soured loans nearly doubled year over year as well.

The end to the underlying economic headwind isn't exactly visible on the horizon, either. That's why nobody blames Buffett for paring back on the position, particularly in light of potential increases in capital gains tax rates. The assumption, however, ignores a couple of details.

First and foremost, while Berkshire Hathaway admittedly sold a sizable swath of its Bank of America stake, it still owns so much more. As of the latest known tally, the conglomerate is still holding more than 940 million shares of the bank collectively worth $37 billion. Buffett's hardly abandoned the position. He may have simply been taking some profits and rebalancing a portfolio that sorely needed it while it makes sense to do so.

Second, Buffett loves value stocks that generate lots of reliable cash. Headwinds or not, BofA still offers both. Shares are priced at less than 11 times next year's projected earnings, which are still expected to be better than this year's, and its forward-looking dividend yield stands at a healthy 2.7%. You can find higher yields, but you won't find higher yields in the banking business at a comparable risk profile.

3. Kraft Heinz

Finally, add The Kraft Heinz Company (NASDAQ: KHC) to your list of Warren Buffett stocks that are screaming buys right now, while shares are still down 65% from their 2017 peak and still near their 2020 low.

Kraft Heinz is one of Buffett's rare missteps. He helped orchestrate the 2015 merger of then-separate Kraft and Heinz into a single company with the expectation that synergies would be achieved. The market even agreed for a while, driving the newly minted stock higher following the union.

Reality finally set in by early 2017, though. That's when shares began a long, sharp sell-off, reflecting the fact that this pairing just wasn't working as hoped. In 2019, Buffett conceded, "I was wrong in a couple of ways on Kraft Heinz," adding that "We [Berkshire] overpaid for Kraft." By then, however, it was too late. The mess was made. Many investors have since simply given up on the company, presuming there's just too much to fix following the merger.

Not Buffett, though. Berkshire Hathaway still owns nearly 326 million shares of the beaten-down stock, seemingly anticipating an eventual recovery.

The thing is, it's not a crazy expectation. Relatively new CEO Carlos Abrams-Rivera understands what needs to be fixed and knows how to fix it . Innovation is prioritized again, as are smart branding partnerships. For example, its Taco Bell at-home Crunchwrap Supreme quesadillas are a hit with consumers. Kraft Heinz is also (finally) giving meaningful thought to running a cost-effective operation and is leveraging technology when and where appropriate to do so. While not much, these and other initiatives are starting to produce consistent, measurable growth.

There are legitimate concerns here, to be sure. Chief among them is the fact that Kraft Heinz has raised its dividend payment since lowering it in early 2019 in an effort to deal with some of the uglier concerns on its balance sheet. The company's more than able to cover its current payouts, though, and with earnings on the rise, dividend increases in the foreseeable future aren't out of the question.

Bank of America is an advertising partner of The Ascent, a Motley Fool company. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and Berkshire Hathaway. The Motley Fool recommends Kraft Heinz and Occidental Petroleum. The Motley Fool has a disclosure policy .