Warren Buffett isn't known as a proponent of growth stocks. But his holding company Berkshire Hathaway has delivered higher returns than the S&P 500 over the past 10 years. Typically, more than half mutual funds underperform the benchmark index. In 2021, 80% of mutual funds underperformed the S&P 500, and Berkshire Hathaway slightly outperformed it. It's not surprising that Buffett has said he wants 90% of his funds invested in an index fund after he dies.

Buffett follows an investing approach that focuses on value, and part of his method is finding undervalued stocks, or stocks that trade below their intrinsic value according to valuation metrics. This assumes that prices will eventually rise to the companies' real values. After all, every method of investing has the overarching goal of seeing prices appreciate. One stock in the Berkshire Hathaway portfolio that looks ridiculously cheap right now, and has incredible growth potential, is RH (NYSE: RH).

RH has been around for decades, formerly known as Restoration Hardware. It has been led by visionary CEO Gary Friedman since 2014, who has built it into one of the foremost luxury furniture companies in the U.S. It rebranded as RH in 2012, and over the past year it's been reinventing itself again -- not in its name, but in its branding.

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Source Fool.com