Berkshire Hathaway, Buffett’s investment group, disclosed it had bought 5 million shares of the healthcare company earlier in the year. That sparked a 14% Friday rally in a stock that has lost more than half of its value over the past 12 months.

Warren Buffett Just Invested $3.9 Billion in 12 Stocks. Here's the Best of the Bunch. Buffett and his team bought 12 stocks in Q2, including initiating three new positions. The best of the bunch appears to be Buffett's biggest purchase in Q2.

So while we should always try to assess where a stock or sector is headed, the better way to trade is with a simple framework: Any stock can go up and thus be a source of profits. However, owning each stock comes with different levels of risk,