There has been a kind of cottage industry this year speculating whether or not Alphabet (GOOG -0.14%) (GOOGL -0.36%) and Shopify (STORE -1.71%) were good picks to buy ahead of their respective stock splits. Alphabet’s stock price is now lower than it was before its stock split, while Shopify’s stock price has risen somewhat. But these moves don’t seem related to the splits at all.

We now know that a prominent investor indirectly acquired stakes in both stocks earlier this year. Here’s how Warren Buffett quietly invested in Alphabet and Shopify long before their stock split.

Buy a baby

You won’t find Alphabet or Shopify on 13-F repositories for Berkshire Hathaway (BRK.A 0.70%) (BRK.B 0.72%), the company in which most of Buffett’s net worth resides. You also won’t find any public comments or revelations from Buffett himself about the purchases of the two growth stocks.

However, Buffett does indirectly hold positions in Alphabet and Shopify now. How? Berkshire bought a 3.1% stake in marcel (MKL 1.39%) in the first quarter of 2022. And Markel owns shares of Alphabet and Shopify.

Markel has been called the “Baby Berkshire” for good reason. Like Berkshire, it generates a lot of float from its insurance business. Markel is focused on the specialty insurance market, providing insurance to customers who typically cannot obtain traditional insurance.

Much like Berkshire, Markel is a holding company that invests heavily in other businesses. Some of these companies are not publicly traded, but many of them are. Markel’s largest stock position is none other than Berkshire Hathaway itself.

Are Alphabet and Shopify now Buffett stocks?

Markel is a quintessential Buffett stock. I would even say that it is one of the best candidates for the best stock in the legendary investor’s portfolio. But should Alphabet and Shopify now be considered Buffett stocks?

On the one hand, the answer is an unequivocal “no”. Berkshire didn’t buy Markel to get its hands on Alphabet and Shopify. The giant conglomerate could have easily bought either stock outright, had Buffett or one of his investment managers chosen to do so — but it didn’t.

However, Buffett admitted he made a mistake by not buying Alphabet (then Google) years ago. He even played a key role in Google’s IPO.

The Oracle of Omaha doesn’t have that kind of history with Shopify. However, Buffett admitted that he missed the boat by buying Amazon.co.uk earlier. Amazon is now part of Berkshire’s portfolio. Shopify shares several points in common with Amazon and is positioned as a formidable e-commerce competitor.

But there’s one factor about Shopify that makes Buffett unlikely to push Berkshire to invest anytime soon: its valuation. Shopify shares are trading at 588 times expected earnings and nearly 10 times past 12-month sales.

Alphabet seems to be more reasonably priced though. Its shares are trading at less than 19 times expected earnings. That’s lower than Berkshire’s forward earnings multiple. Additionally, Alphabet’s price/earnings/growth (PEG) ratio is 0.78. Buffett may not use the PEG ratio in his analysis, but he certainly factors growth into the equation when evaluating a company.

One thing Buffett didn’t care less about

You can rest assured that Buffett cared no less about stock splits in his decisions to buy stocks. The multi-billionaire wrote to Berkshire shareholders earlier this year that he and his longtime business partner “are not stock pickers; we’re company pickers.” If Buffett isn’t picking stocks per se, he certainly isn’t focusing on stock splits.

I suspect Buffett would find a lot to like in the Alphabet and Shopify businesses. Although he only indirectly owns shares of both companies, they could help make Buffett even richer in the next few years.