5 Warren Buffett Favorites To Keep An Eye On

Legendary investor Warren Buffett has posted an impressive 21% year-to-date return for his flagship Berkshire Hathaway Inc BRKA BRKB in the first half of 2021.

Here's a look at five stocks owned by Buffett and Berkshire Hathaway that could see strong gains in the second half of 2021.

1. Aon: Earlier this year, Berkshire Hathaway took an initial position in insurance broker Aon plc AON. Shares of the company are up 15% year-to-date, could see more upside and could also be a position Buffett adds to.

Aon reported first-quarter revenue up 10% year-over-year, including organic revenue growth of 6%. The company’s margins improved and earnings per share grew 22% year-over-year. Aon announced a supply chain global protection plan for COVID-19 vaccines that could be a highlight in the next earnings report.

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2. Apple: There have been several rallies for technology stocks in the first half of 2021. Despite the rallies, shares of technology giant Apple Inc AAPL traded flat in the first half of 2021.

Apple makes up the largest stock holding in the Berkshire Hathaway portfolio. The iPhone maker continues to be an innovator and should not be overlooked for more product launches and announcements in the second half of the year that could move shares of the stock higher.

3. Bank of America: Bank of America Corporation BAC is a large holding of Buffett's and one of several bank stocks that he has kept. Buffett has significantly lowered the company’s weighting in Wells Fargo Co WFC, a stock it once owned 10% of and started investing in dating back to 1989.

Bank of America could be Buffett's favored banking stock and it comes as the company reported record consumer investment assets and record client balances in the first quarter.

Revenue for the first quarter of $22.8 billion was flat year-over-year but several areas saw strong demand and growth. The company announced it's raising its quarterly dividend from 18 cents to 21 cents in late June and could continue to raise dividends after passing a new bank stress test.

4. Coca-Cola: One of Buffett's favorites is Coca-Cola Co KO. Shares of the beverage giant are down 1% in the first half of 2021 as many consumer food and beverage companies have seen positive returns. The company could be due to make a big acquisition like that of Monster Beverage Corporation MNST or pushing further into alcoholic beverages.

5. Verizon: Shares of Verizon Communications VZ are down around 4% in the first half of 2021. The company reported total revenue of $32.9 billion in the first quarter, up 4% year-over-year. Several of the company’s core business segments saw single-digit growth.

A shift to 5G nationwide could help a company like Verizon, which along with a near 5% dividend yield could make the communications giant a stock to watch in the second half of 2021.