Higher prices make shares less attractive to investors like me. It means that I have to pay more for the same stocks that I was buying last week and last month.

That makes it harder to find attractive opportunities. But Activision Blizzard and Berkshire Hathaway are stocks that I’m happy buying for my portfolio today.

Berkshire Hathaway

Let’s start with Berkshire Hathaway. Share prices have been going up across the board and Berkshire’s shares are 11% higher than they were a month ago.

That means the stock is less attractive than it was a month ago – I’d rather buy shares at $276 than at $306. But Berkshire is still one of my best shares to buy right now.

The company is facing a number of headwinds at the moment, most notably inflation and the possibility of recession. But I think that Berkshire’s strength will see the business do well over time.

Unlike other insurance companies, Berkshire invests its float in common stocks, rather than bonds. This allows it to earn a greater return than its competitors, which allows it to buy even more stocks.

Why don’t other insurance companies do this? Investing in stocks rather than bonds requires substantial cash to cover the possibility of underwriting losses. Berkshire has this, but other insurers don’t.

In other words, Berkshire’s biggest advantage is its balance sheet. This allows it to be conservative in its insurance writing and to invest at higher rates of return than its competitors.

Activision Blizzard

Activision Blizzard is also one of my best shares to buy right now. In a turbulent market, I think that the stock offers a degree of predictability that is hard to find at the moment.

Since the company is the subject of a takeover bid, the investment thesis isn’t entirely about its earnings. Microsoft is attempting to buy Activision in its entirety at a price of $95 per share.

Today, the Activision share price is $80. This implies a gain of just over 18% if the deal goes through. 

There’s a risk that the deal might not complete, though. If it doesn’t, I think that the stock is likely to fall to around $67, meaning a probable downside of around 16%.

I think that the deal is likely to go through, though. That means that I think the stock is attractive on a risk vs. reward basis.

It’s not just me that thinks this. Yesterday’s 13F filings revealed that Warren Buffett has been buying shares as well.

Shares to buy now

The stock market looks uncertain to me at the moment. Rising share prices are making stocks riskier, so I’m looking for opportunities that are as straightforward as possible.

That makes Activision Blizzard and Berkshire Hathaway two of the best shares for me to buy today. Activision’s future is relatively clear one way or another, and Berkshire has enduring strengths.

As such, with £500 to invest today, I’d look to buy both stocks. 

Three of my investments, however, aren’t like that. There are three stocks in my portfolio that I don’t anticipate selling at any price.

This is because they are the highest-quality businesses I own. So if I sold the shares, I don’t think I’d be able to replace them with an upgrade.

Disney

The first stock I’d never sell is Walt Disney (NYSE:DIS). Both the stock and the business have had a turbulent time over the past few years, but I’ve never been tempted to sell my investment.

Like any investment, Disney stock carries some risk. In my view, the biggest risk comes from the cost of continuing to create new content, which could weigh on investment returns.

I think, however, that Disney’s content library gives it a huge advantage over its competitors that offsets this risk. Furthermore, the strength of the company’s back catalogue is basically impossible for rivals to replicate.

Disney is the only stock in this list that I’m actively buying at the moment. I think that the stock is currently undervalued and I’m looking at increasing my investment in the business.

Realty Income

I also have a substantial investment in Realty Income (NYSE:O) that I don’t ever intend to sell. Instead of selling, I plan to keep reinvesting dividends to increase my passive income.

Realty Income is a real estate investment trust (REIT) that makes money by leasing retail properties. Like other REITs, it distributes its rental income in the form of dividends.

The company is exposed to risk in the form of high property prices, which is making expansion difficult. But it has navigated these challenges well before and I think it will continue to do so.

Twenty-eight years of consecutive dividend increases make the stock a Dividend Aristocrat. It also reinforces my belief that the business can perform well in any economic environment.

Berkshire Hathaway

Lastly, I own shares in Berkshire Hathaway (NYSE:BRK.B). This is another stock that I never anticipate selling.

The risk with this stock is that the size of the underlying business limits growth opportunities. But I think that patience will be rewarded over time.

In my view, Berkshire has a unique advantage. It uses the money it receives from insurance premiums to make investments that power its earnings.

This is a good business model, but it takes a lot of capital to make it work. Underwriting its insurance obligations requires significant cash to cover potential losses.

Berkshire’s big advantage is that it has the cash to operate in this way. Other insurance operations don’t have the same protection.

This allows Berkshire to avoid unnecessary risk and be conservative in its insurance underwriting. I think this advantage is durable and so I’m never selling the stock.

But generally, investors tend to think of any sustained upwards run as a bull market. And any significant downwards spell is a bear market. Typically, the average bull market has lasted around five years. The average bear, meanwhile, continues for a little more than a year.

Might long-term investors be better of if that was the other way round, with more falls than rises? Wouldn’t we have more opportunities to buy cheap shares?

To answer that, I can’t think of anything better than looking at how the billionaire boss of Berkshire Hathaway, Warren Buffett, deals with stock market falls.

In the few weeks after the Covid-19 pandemic struck, the S&P 500 fell 30%. The recovery was surprisingly fast, with the index regaining its ground by August. The FTSE 100 took quite a bit longer, mind.

What happened the next year, in 2021? The S&P 500 gained 28.7%, while Buffett’s Berkshire Hathaway slightly bettered it with 29.6%. Buying shares while they were depressed by the pandemic was clearly a good plan.

Major bear market

But that’s nothing compared to the carnage resulting from the the financial crash, which kicked off in 2007. Between a high point in October that year, and the beginning of March 2009, the S&P 500 crashed by a whopping 56%.

Berkshire Hathaway suffered too, albeit with a softer fall of 32%. Now what do we see if we wind forward a decade? From the depths of the banking crash in 2009, the S&P 500 had gained 280% by the same point in 2019. Buffett’s shareholders did a bit better on 290%, and they’d started from a significantly lower initial fall.

Just like the Covid market slump, the financial crash provided investors with a great time to buy. And those who were panicking and selling while shares were down? Well, we can see what they missed.

Fear and greed

Buffett is famed for buying heavily when he sees great companies unfairly marked down. In his 1986 letter to Berkshire Hathaway shareholders, he explained how he avoids trying to time the market bottoms. Instead, he said: “Our goal is more modest: we simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.“

That approach to bear markets has served Buffett, and his shareholders, well.

From Buffett taking control of Berkshire Hathaway in 1965 up to the end of 2021, the S&P 500 managed a total return (including dividends) of more than 30,000%. Berkshire, meanwhile, soared by a total of 3.6 million percent!

We’re not all going to be as good as Buffett. But even investors who make regular purchases in an index tracker will benefit from bear markets over the long term. The simple truth is that when markets are down, we can buy more shares for the same money.

Quality is invaluable

It’s no secret that Warren Buffett only invests in quality stocks that provide good value. Over his decades of investing, he’s reiterated that a good investment has three main factors:

1. A good valuation with room for growth.
2. Strong pricing power and fundamentals.
3. An excellent moat with a margin of safety.

This is evident when analysing his company’s portfolio. The firm has positions in many of the world’s biggest companies. Many of these stocks have one thing in common. They’re market leaders that exhibit quality profit margins and healthy fundamentals.

A buffet of stocks

As the US S&P 500 flirts with bear market territory, the Oracle of Omaha has been going on a shopping spree. Warren Buffett has been buying shares in excellent companies for cheap valuations, having done the same during the 2008 financial crisis. He’s made mistakes in his investing career too, but he learns from them and moves on.

Be fearful when others are greedy, and greedy when others are fearful.

Warren Buffett

The current forward price-to-earnings (P/E) multiple for the S&P 500 stands at 16.6. This is below the five-year average of 18.6, and 10-year average of 16.9. As such, Warren Buffett has increased and even bought positions in several blue-chip stocks. These include PC giant HP, oil behemoths Chevron and Occidental Petroleum, and recently, entertainment conglomerate Paramount Global.

These purchases allow Warren Buffett to dollar cost average, as he continues to buy value stocks on the dip. Berkshire’s move to increase its stake in oil also allowed the firm to capitalise on sky-high oil prices. This has allowed the fund to hedge against the potential slowdown in earnings from its other positions. Consequently, Berkshire Hathaway has outperformed the S&P 500 by almost 20% this year.

Keeping it simple

Warren Buffett has always stressed on keeping investing simple. Buy shares in a great business for less than it’s worth, with managers of the highest integrity and ability. But what is a great business? As hinted at earlier, these are businesses with low debt, high levels of cash, healthy margins, strong growth, and an inelastic good/service. While this may seem simple, companies exhibiting all these traits are difficult to find.

So, despite already having an array of renowned names on his portfolio, the 91-year-old has expressed his regret in not purchasing shares of several top US companies. One is a personal favourite of mine, Alphabet. Although the tech giant came short of earnings expectations recently, he sees plenty of promise in the Google-owning firm. With a 20-1 stock split around the corner, I think Berkshire may add Alphabet to its portfolio. If so, I’d be even more confident in Warren Buffett’s ability to continue beating the stock market.

Apple 

According to Berkshire Hathaway‘s (NYSE: BRK-A) SEC filing, Warren Buffett’s largest holding is Apple (NASDAQ: AAPL). Via Berkshire, Buffett owns 5.55% of the US tech giant’s total shares — a whopping 43% of his equity portfolio. Buffett began building a stake in Apple in 2016 and in his annual letter to Berkshire shareholders he praised CEO Tim Cook for Apple’s share repurchase strategy. 

One factor behind Buffett’s bullishness is the iPhone maker’s competitive advantage. Apple’s ecosystem is created by establishing market standards, encouraging developers to build apps tailored specifically to Apple smartphones. This produces a virtuous cycle, making Apple products indispensable. 

Nonetheless, Apple supplier Foxconn recently suspended its Shenzhen production due to a Covid-19 outbreak in the region. The Apple share price is still high for me, despite being down almost 14% on a three-month basis. Currently, I’m reluctant to deploy a significant amount of my cash reserves buying Apple in one go.

Indeed, Warren Buffett bought his position at an average cost of a quarter of today’s price. I will be buying steadily over the coming months to capitalise on any further dips in Apple’s share price. 

Bank of America 

At over 13% of Berkshire’s holdings, Bank of America (NYSE: BAC) is the second-largest constituent of Warren Buffett’s portfolio. The stock’s P/E ratio of 11.63 fits with Buffett’s value investing philosophy. Shareholders also benefit from a handy dividend yield of over 2%.

The Federal Reserve is tipped to hike interest rates in 2022. Bank of America should benefit from these macroeconomic conditions. Moreover, with a total net income of $32m for 2021, the bank is well placed to build on strong fundamentals this financial year. 

The stock currently sits almost 20% below its 52-week high in mid-February. Furthermore, the US economy is flashing recession warning signs. Bank of America shares could face further pain, given the bank services around 67 million consumer and small business clients stateside.

Despite these risks, I see Bank of America’s current share price as an attractive entry point to add this Warren Buffett stock to my portfolio. 

Another way to invest like Warren Buffett 

Perhaps the easiest way to mirror Warren Buffett’s investments is buying Berkshire Hathaway shares. The company’s compounded annual gain of 3,641,613% dwarfs the 30,209% gain for the S&P 500 from 1964 to 2021. For me, Berkshire stock carries some of the diversification benefits of an index fund while providing an opportunity to beat the market. 

Investors may worry about Buffett’s age at 91 while Vice-Chairman, Charlie Munger, is 97. Berkshire Hathaway’s share price performance without the duo at the helm is untested. This doesn’t dissuade me from owning the stock, however. I see the potential for future leadership to emulate Buffett’s investing approach beyond his lifetime. 

Berkshire currently has over $145bn in cash on its balance sheet and insurance is a large part of its business. A useful reminder for me that, with share valuations riding high, cash is king for scooping up bargains in the event of a stock market crash. 

However, although he has experienced multiple market sell-offs, Buffett has never changed his investment strategy. This is something I am trying to copy for my own portfolio. 

Rather than trying to time the market and predict the next stock market crash, which is all but impossible, I am focusing on finding the market’s best companies and sticking with these businesses for decades. 

With that in mind, here are three Buffett stocks I have been buying as a way to insulate my portfolio from a market decline. 

Stock market crash protection 

The first company is Buffett’s conglomerate, Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B). This corporation has several qualities that suggest it is the perfect vehicle to own to protect against uncertainty. 

Firstly, the firm has one of the most robust balance sheets of any Fortune 500 company. It has almost no debt and $140bn-plus of cash. As well as these resources, the corporation owns $300bn-plus of liquid securities, stocks and shares it can sell at any moment to realise cash. 

Not that the enterprise is likely to need cash anytime soon. Berkshire is built around a few core businesses, which are cash cows. From its railway unit to its utility division and insurance arm, the establishment owns some of corporate America’s largest and strongest companies. 

Warren Buffett’s reputation

The company’s size also gives it a solid competitive advantage over peers. Thanks to Buffett’s reputation, Berkshire has the pick of business deals. It can buy smaller firms and make deals with larger corporations that would be impossible with other partners.

For example, in the financial crisis, Buffett moved quickly to provide tens of billions of dollars in capital to struggling companies and demand a double-digit interest rate for the privilege. 

As such, not only is Berkshire strong enough to survive a stock market crash, but it also has the resources to take advantage of the situation. 

Unfortunately, the company’s association with Buffett is also a drawback. The billionaire is not getting any younger and, aged 91, he may not be at the helm for much longer. When he departs, the enterprise will lose its visionary CEO, and it could start to struggle for direction. 

Payment giant 

Considering the risk outlined above, I have been diversifying away from Berkshire, buying other stocks that I believe the ‘Oracle of Omaha’ would acquire for his portfolio or already owns. 

One of these companies is the payment processor Visa (NYSE: V). Buffett owns $2bn of this group in his Berkshire portfolio, and I also own the stock. 

Visa manages the global payment network for Visa cards. Every day it processes trillions of dollars transactions, and this number is only expanding. The company reported a spike in transactions throughout the pandemic as consumers moved away from cash.

Unfortunately, the corporation also suffered a decline in cross-border transactions, which are more lucrative. This decline hit its overall growth rate. 

Investors have also been expressing concern about the rise of other digital payments and cryptocurrencies. Some analysts believe that these payment methods could start to chip away at Visa’s position in the market. This is probably the most significant challenge the company faces right now. It is something I will be keeping an eye on as we advance. 

Still, I think this business has all the qualities I want to see in a company that can protect my portfolio from a stock market crash. If there is a crash, it seems unlikely there will be a significant decline in card transactions. Therefore, Visa should continue to generate cash. Management can then use this cash to acquire smaller peers to boost growth. The firm could also return some of its profits to investors with dividends and share repurchases. 

Former Warren Buffett stock 

The final stock I would buy for my portfolio is the retailer Tesco (LSE: TSCO). Buffett currently has no interest in this business, but he has owned the stock in the past. He sold the position after the company’s accounting scandal in 2014. 

Tesco is currently having to fight off a number of headwinds. These include rising wages and supply chain costs. The organisation is trying to reduce costs to maintain margins, but if the supply chain issues continue, I think these challenges could impact the company’s overall profitability. 

Nevertheless, as the largest food and drink retailer in the UK, the firm has a captive market. Consumers will always need to eat and drink, suggesting there will always be a market for its products. As such, it seems unlikely that its revenues will decline substantially in the event of a stock market crash.

Shares in the company might come under pressure but, fundamentally, the business should remain on track. This suggests that the stock should reflect the growth of the underlying business over the next few decades, and not short-term market fundamentals. 

In addition to these qualities, the stock also supports a healthy dividend yield of around 4%. Compared to Visa and Berkshire Hathaway, this level of income is incredibly attractive to me. That is why, although Buffett is no longer a fan of the company, I would acquire Tesco to provide me with some stock market crash protection. 

Massive loss of market capitalisation

The revelation caused Meta stock to plunge. And at $238 yesterday, the stock was down more than 25% in just one day. That’s a big move for such a mega-cap company. The market capitalisation was reduced by more than $200m. And according to analyst Graham Neary, that’s the biggest one-session loss of capitalisation suffered by any company in history.

As I write, Meta Platform’s market cap is about $660m. And that means Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A) is now valued higher by the market with a capitalisation of around $706m. The only companies valued more highly than Berkshire now are Apple, Microsoft, Google owner Alphabet, Amazon and Tesla Motors.

Warren Buffett is rising up the rankings, and rightfully so. The way Buffett has guided the conglomerate to earn annualised returns of 20% since 1964 is nothing short of amazing. It’s the consistency of growth that’s so impressive. And the master investor has done it with a diverse range of businesses and stocks covering several sectors.

I think the widespread nature of his investments makes Berkshire Hathaway stand apart from the other seven mega-caps mentioned. Each of those businesses was built on a narrower focus and operations mainly in just one sector. I’d describe those companies as being driven by entrepreneurial forces, whereas Berkshire has been powered by Buffett’s flair and skill as an investor.

I’d follow Warren Buffett

But is the plunging Meta Platform’s stock price a buying opportunity? The stock could bounce higher again, but it’s not for me. I think there’s a risk that social media platforms could be shunned by investors in the years ahead because of the addictive nature of the services provided to consumers. And I’m also mindful of the many platforms that have risen in popularity only to plunge back down again. For example, it wasn’t so long back that Myspace was hot.

On top of that, I was sceptical when Facebook changed its name to Meta Platforms. It seemed to me the company might already have seen the writing on the wall and was perhaps acting to find new markets to preserve revenue. However, the idea that some alternative reality may catch on baffled me. I like real life, thank you very much!

I’d be much more inclined to look for opportunities to buy shares in Berkshire Hathaway, such as dips, down-days, corrections and bear markets. But I’m even keener on applying Buffett’s well-documented stock-picking methods to choosing my own shares for a portfolio.

There are no guarantees of a positive investment outcome because all shares carry risks, as we’ve seen with Meta Platforms. However, I think a few well-chosen stocks would work well in my portfolio alongside a selection of index tracker funds. And I’d choose my stocks from both the UK and North American stock markets.

However, in recent years, doubters have started taking pot-shots at the 91-year-old guru. The stellar performance of Berkshire Hathaway (NYSE: BRK.A), his conglomerate, has eased off over the past decade. In the last five years, Berkshire stock has gained 91.3%, versus 92.9% for the S&P 500 index (all returns in this article exclude dividends). But over the past 12 months, Berkshire stock has leapt 35.7% — more than double the S&P 500’s 17.4% gain. So, for the past year at least, backing Warren Buffett was once again a wise move.

‘The Queen of the bull market’

Since 2019, one major contender has stepped up — a challenger to seize the throne and take the crown from the world’s greatest investor. She’s Cathie Wood, manager of the wildly popular ARK Innovation ETF (NYSEMKT: ARKK). Wood, a 66-year-old devout Christian from Los Angeles, named her fund group Ark Invest after the Biblical Ark of the Covenant. And in 2020, her ARKK exchange-traded fund’s performance was nothing short of heavenly, easily thrashing Warren Buffett’s returns.

Cathie Wood has managed the ARKK ETF since it was launched on 30 October 2014. This New York-listed ETF invests in ‘disruptive innovation’ in fields such as DNA sequencing and genomics, automation and robotics, green energy, artificial intelligence, and fintech (financial technology). Thus, Wood’s fund is heavily weighted towards highly rated tech stocks — with the largest holding being electric carmaker Tesla.

From its launch in late 2014 to peaking in February 2021, ARKK delivered a colossal return of 683.6%. In other words, $1,000 invested in this ETF at launch would have been worth over $7,836 at the peak price of $159.70 on 16 February 2021. But such market-thrashing returns rarely persist and quite often become a flash in the pan. On Friday, ARKK closed at $68.91, having collapsed by more than half (-56.9%) from its all-time high. So far in 2022 — just a month into the year — ARKK has crashed by more than a quarter (-27.2%). And over 12 months, the stock has collapsed by 51.7%, making it one of the worst-performing US ETFs over one year. So much for Cathie Wood stealing Warren Buffett’s crown.

Warren Buffett trounces Cathie Wood over one year

Though I admire and respect Cathie Wood, her reputation relies on just three outstanding years: 2017, 2019 and 2020. Here’s how ARKK has performed since end-2014.

As shown, ARRK had three dull years, three exceptional years, and an awful 2021. Thus, its five-year gain has declined to 207.9% — still an excellent return. However, with the stock now deep into bear territory, anyone backing Cathie Wood since late June 2020 will have lost money (on paper or in reality). Meanwhile, investors backing Warren Buffett have been handsomely rewarded. Over one year, $1,000 invested in Berkshire stock would be worth more than $1,357 today, versus $483 in ARKK.

In short, ARKK’s collapsing stock over the past year has cost Cathie Wood’s fans billions of dollars. Meanwhile, Berkshire Hathaway’s market value has soared to nearly $700bn. This has added almost $30bn to Warren Buffett’s personal wealth. That’s why he’s still my hero!

From 2008 to 2018, his company, Berkshire Hathaway, cumulatively returned 119.7% in comparison to the S&P 500 Index returns of 73.2%. This is a huge difference and goes some way to explaining the Sage of Omaha’s vast wealth.

As individual investors, we are lucky that over the years he has shared some of his wisdom and insight in interviews and letters to shareholders.

So, what do we know about Warren Buffett’s investment philosophy?

Buy what you know

Historically, Buffett has only invested in businesses that he understands. If you look at some of the past companies he has bought a share of, you will note that many are operating in traditional industries like consumables, banking, and insurance.

If you don’t understand how a business makes its money, then you cannot grapple with the dynamics of its industry and where it comes under threat from competitors. If he doesn’t understand how a business can return value to an investor, he moves on to another opportunity. This strategy has helped Buffett avoid disasters like the dot-com bubble. 

Wonderful company

As a value investor, Warren Buffett’s priority is finding wonderful companies. He has stated that “it is better to buy a wonderful company at a fair price than a fair company at a wonderful price”.

Although he’d rather buy a company trading at a price below its intrinsic value, I think he realises sometimes quality businesses are only ever valued fairly.

His investing style has evolved since his early years when he would seek out “cigar butt” companies. Normally, these businesses had suffered from a previous hiccup but might offer a final glimmer for the investor to sell at a nice profit – like a cigar butt found on the street, only offering one last puff.

Buy stocks as if you are buying the whole business

Another piece of Buffett advice is to imagine you are buying the whole business. If you’re anything like me, thinking like this will make your due-diligence checks more thorough. For example, you’ll probably look at the management of the company in more detail.

A quick internet search of the CEO of a company could spring up an interesting fact about their qualifications for the role. 

The more knowledge you have about the company, the better.

Favourite holding period

Buffett has stated that his preferred holding period is forever. He doesn’t buy a company with a mind to how much it will be worth in the future.

I think this principle leads an investor to stop chasing the next big thing and unwittingly buying into a bubble.

I believe Buffett’s advice helps to take some of the adrenaline and emotion out of investing. It’s best to slow things down and take a moment to ensure you’re making a decision that you are comfortable with.

Some firms would have just accepted the situation, but to its credit, the management team decided to take bold action instead. The directors fired up a new acquisition programme aimed at diversifying into more attractive sectors, and the company sold 10 of its existing businesses over three years. At the beginning of this century, it had a war chest of cash from the sales to fund future acquisitions and growth initiatives.

Expansion overseas

The transformation of the firm’s activities saw it move from being a mainly UK-focused operation to an international one. Now, around 25% of revenue comes from the UK and the rest from North America and mainland Europe, earned from distributing technical products to the Life Sciences, Seals and Controls industries. These include consumables, instrumentation, environmental analysers, containment enclosures and emissions monitoring systems.

The firm aims to make itself an indispensable link in its customers’ supply chains by focusing on supplying “essential products and services,” which customer-organisations buy from their operating, rather than their capital, budgets. Diploma reckons the tactic provides recurring income and stable revenue growth, and it’s hard to argue with the firm’s record of trading. Over the past six years, the compound annual growth rate (CAGR) for revenue is almost 12%, net profit around 9%, normalised earnings per share around 9.5%, and the dividend almost 10%. Meanwhile, the operating margin is running just over 16% and the return on capital is a little over 25%. I think these numbers suggest a quality operation and investors have been rewarded with an increase in the share price over the period close to 270%. Wow!

A better business

I think Diploma is more than just your average distributor. The firm reckons its businesses offer “a blend of high-quality customer service, deep technical support and value-adding activities.”  The aim is to deliver “essential solutions, not just products,” enabling the company to build strong long-term relationships with its customers and suppliers, “which support attractive and sustainable margins.”

I think the directors could have been looking across the pond for inspiration because they “encourage” an entrepreneurial culture in the firm’s individual business units by operating a decentralised management structure. That’s just how well known investor Warren Buffett runs his company Berkshire Hathaway in the US. Diploma argues that the arrangement allows decisions to be made close to the customer so that the businesses are “agile and responsive to changes in the market and the competitive environment.”

In today’s full-year report, the company presented another good set of figures. Year-on-year revenue increased 7%, free cash flow moved 9% higher and adjusted earnings per share rose by 13%. The directors pushed up the total dividend for the year by 11% reflecting their “confidence in Group’s prospects.” Indeed, the outlook is positive and the company expects to grow further both organically and by acquisition, as it consolidates further into what looks like an attractive trading niche.

I think Diploma has many fine qualities and is worth keeping a close eye on with a view to buying some of the firm’s shares.