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Two Warren Buffett Stocks Fall Near Lowest Prices in a Year

- By Holly LaFon

An eight-year bull market has found many investors searching harder for underpriced securities, with First Eagle senior adviser Jean-Marie Eveillard telling GuruFocus recently, "There are few opportunities, but still there are some." This week, several may reside in Warren Buffett (Trades, Portfolio)'s portfolio.

Prices in Buffett's portfolio largely mirror the market. The 175% rise in the S&P 500 in the past nine years has lifted 19 of his 47 holdings, or 40%, to within 5% of their highest prices in a year. In the index, 155 of 500 companies, or 31%, trade within that range, according to data. In an even closer match, 4% of companies in the S&P 500 trade within 5% of their one-year low, and 4% of Buffett's holdings trade in that range.

The chairman and CEO of Berkshire Hathaway (BRK-A)(BRK-B) (or one of his two portfolio managers) has also plucked some stocks from the morass of high valuations, buying Southwest Airlines (LUV), Monsanto (MON) and Sirius XM (SIRI) in the fourth quarter. Regarding price, Buffett's interest lies in good companies at fair prices - modifying a popular aim of fair companies at good prices, he has said.

The two Buffett stocks that managed to sink to the bottom in a buoyant market were General Electric Co. (GE) and Verizon Communications Inc. (VZ).

Verizon's stock price fell to $47 Tuesday, 3.1% above its 52-week low. The telecommunications company has lost 11% year to date, including a downturn when it released first quarter financial results last week. Verizon recorded EPS of 84 cents, a decline from $1.06 one year previously. Revenue also declined 7.3% year over year to $26.8 billion. Verizon has a P/E ratio of 15.78 and a P/B ratio near a three-year low at 8.24.

Buffett appears to have lost faith in the company, however, as he reduced the position he started in early 2014 by 15 million shares, or 99.99% in the fourth quarter. The stock's price remains an estimated 5% above his buy price.

General Electric traded 4.4% above its 52-week low Tuesday. The company fell 7.4% year to date, closing at $29.26. Its stock also took a hit from its earnings report last week. GE had EPS of 10 cents, improved from 3 cents one year previously. Revenue declined 1% to $27.7 billion year over year. GE as a P/E ratio of 30.2 and P/B ratio near a 10-year high of 3.48.

Buffett holds 10.6 million GE shares, after starting the position in early 2011, and has not added to it since the last quarter of 2013. GE's price has risen just 9% from Buffett's average buy price of $24.

See Warren Buffett (Trades, Portfolio)'s portfolio here.

This article first appeared on GuruFocus.