Sears, Bankers, Buffettisms, Hydrogen
– Some interesting thoughts on Sears
– George has a great collection of Buffett quotes
– Great…..home made hydrogen bombs
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Upgrades
Berry Petroleum (BRY)- Wachovia Mkt Perform » Outperform
Applied Signal (APSG)- Friedman Billings Mkt Perform » Outperform
China Unicom (CHU)- Deutsche Securities Hold » Buy
China Netcom (CN)- Deutsche Securities Hold » Buy
Ceradyne (CRDN)- Friedman Billings Mkt Perform » Outperform
Century Aluminum (CENX)- Friedman Billings Mkt Perform » Outperform
Jacobs (JEC)- Friedman Billings Mkt Perform » Outperform
Anadarko Petro (APC)- Wachovia Mkt Perform » Outperform
Carrizo Oil & Gas (CRZO)- Wachovia Mkt Perform » Outperform
Morgan Stanley (MS)- HSBC Securities Neutral » Overweight
Commercial Metals (CMC)- Citigroup Hold » Buy
Steel Dynamics (STLD)- Citigroup Hold » Buy
Syniverse Holdings (SVR)- Robert W. Baird Neutral » Outperform
Acergy (ACGY)- Citigroup Sell » Hold
Downgrades
Texas Industries (TXI)- KeyBanc Capital Mkts Buy » Hold
Jack In The Box (JBX)- Wedbush Morgan Strong Buy » Buy
Tuesday Morning (TUES)- B. Riley & Co Buy » Neutral
Webster Financial (WBS)- FTN Midwest Buy » Neutral
Texas Industries (TXI)- Longbow Buy » Neutral
Teva Pharm (TEVA)- FTN Midwest Buy » Neutral
Wachovia (WB)- Fox Pitt Outperform » In Line
Five Star Quality Care (FVE)- Stifel Nicolaus Buy » Hold
Applied Materials (AMAT)- Citigroup Buy » Hold
Marriott (MAR)- Susquehanna Financial Positive » Neutral
Marriott (MAR)- JMP Securities Mkt Outperform » Mkt Perform
DaVita (DVA)- Piper Jaffray Buy » Neutral
Elan (ELN)- Piper Jaffray Neutral » Sell
Emulex (ELX)- Robert W. Baird Outperform » Neutral
Rohm and Haas (ROH)- Banc of America Sec Buy » Neutral
Tuesday Morning (TUES)- Deutsche Securities Hold » Sell
Big 5 Sports (BGFV)- Deutsche Securities Hold » Sell
Fresenius Medical (FMS)- Wachovia Outperform » Mkt Perform
Royal Philips Electronics (PHG)- Citigroup Buy » Hold
MiddleBrook Pharma (MBRK)- Merriman Curhan Ford Buy » Neutral
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Upgrades
Berry Petroleum (BRY)- Wachovia Mkt Perform » Outperform
Applied Signal (APSG)- Friedman Billings Mkt Perform » Outperform
China Unicom (CHU)- Deutsche Securities Hold » Buy
China Netcom (CN)- Deutsche Securities Hold » Buy
Ceradyne (CRDN)- Friedman Billings Mkt Perform » Outperform
Century Aluminum (CENX)- Friedman Billings Mkt Perform » Outperform
Jacobs (JEC)- Friedman Billings Mkt Perform » Outperform
Anadarko Petro (APC)- Wachovia Mkt Perform » Outperform
Carrizo Oil & Gas (CRZO)- Wachovia Mkt Perform » Outperform
Morgan Stanley (MS)- HSBC Securities Neutral » Overweight
Commercial Metals (CMC)- Citigroup Hold » Buy
Steel Dynamics (STLD)- Citigroup Hold » Buy
Syniverse Holdings (SVR)- Robert W. Baird Neutral » Outperform
Acergy (ACGY)- Citigroup Sell » Hold
Downgrades
Texas Industries (TXI)- KeyBanc Capital Mkts Buy » Hold
Jack In The Box (JBX)- Wedbush Morgan Strong Buy » Buy
Tuesday Morning (TUES)- B. Riley & Co Buy » Neutral
Webster Financial (WBS)- FTN Midwest Buy » Neutral
Texas Industries (TXI)- Longbow Buy » Neutral
Teva Pharm (TEVA)- FTN Midwest Buy » Neutral
Wachovia (WB)- Fox Pitt Outperform » In Line
Five Star Quality Care (FVE)- Stifel Nicolaus Buy » Hold
Applied Materials (AMAT)- Citigroup Buy » Hold
Marriott (MAR)- Susquehanna Financial Positive » Neutral
Marriott (MAR)- JMP Securities Mkt Outperform » Mkt Perform
DaVita (DVA)- Piper Jaffray Buy » Neutral
Elan (ELN)- Piper Jaffray Neutral » Sell
Emulex (ELX)- Robert W. Baird Outperform » Neutral
Rohm and Haas (ROH)- Banc of America Sec Buy » Neutral
Tuesday Morning (TUES)- Deutsche Securities Hold » Sell
Big 5 Sports (BGFV)- Deutsche Securities Hold » Sell
Fresenius Medical (FMS)- Wachovia Outperform » Mkt Perform
Royal Philips Electronics (PHG)- Citigroup Buy » Hold
MiddleBrook Pharma (MBRK)- Merriman Curhan Ford Buy » Neutral
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Bernanke sure does like these Sunday night releases
Release Date: July 13, 2008
For immediate release
The Board of Governors of the Federal Reserve System announced Sunday that it has granted the Federal Reserve Bank of New York the authority to lend to Fannie Mae and Freddie Mac should such lending prove necessary. Any lending would be at the primary credit rate and collateralized by U.S. government and federal agency securities. This authorization is intended to supplement the Treasury’s existing lending authority and to help ensure the ability of Fannie Mae (FNM) and Freddie Mac (FRE) to promote the availability of home mortgage credit during a period of stress in financial markets.
Release:
Now, while the move may not spare shareholder pain for the foreseeable future, it does say that the Fed will not let them fail. Both companies have had value destroyed the past two years and this move will restore some of that.
It would seem Ben just does not like to see the shorts win…
Disclosure (“none” means no position):None
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Top insider purchases by dollar volume.
Stericycle (SRCL)- $10,001,000
Capitalsource (CSE)- $3,902,000
Copart (CPRT)- $3,615,000
Transmeta (TMTA)- $3,046,000
Equity One (EQY)- $2,856,000
Hovnanian Enterprises (HOV)- $1,139,000
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Top insider purchases by dollar volume.
Stericycle (SRCL)- $10,001,000
Capitalsource (CSE)- $3,902,000
Copart (CPRT)- $3,615,000
Transmeta (TMTA)- $3,046,000
Equity One (EQY)- $2,856,000
Hovnanian Enterprises (HOV)- $1,139,000
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Here are the week’s top stories at Value Investing News
During the great bear market of 1974, Warren Buffett was asked by a rather staid fellow how he felt. ‘Like an over-sexed guy in a whorehouse,’ he replied. ‘Now is the time to invest and get rich.’
I’ve had the good fortune of a friend loaning to me Seth Klarman’s Margin of Safety. The following are my notes on the chapter entitled “At the Root of a Value-Investment Philosophy” where Klarman writes about the three central elements to a value-investment philosophy.
Sir John M. Templeton, a Tennessee-born investor and philanthropist who amassed a fortune in global stocks and gave away hundreds of millions of dollars to foster understanding in what he called “spiritual realities,” died on Tuesday in Nassau, the Bahamas, where he had lived for decades. He was 95.
By the end of the year, Time Warner Cable (TWC), will be a stand alone entity after being spun off from Time Warner Inc. (TWX). TWC is a publicly traded company as it currently stands, 84% owned by its parent, Time Warner Inc. The carve-out occured early in 2007, trading between $36-43, but has plummeted down into the $20’s since.
My posts the next few weeks will focus on what I consider to be attractive names in the Financial Sector.
Some may have wondered what is the connection between Dividend and Value Investing. The connection does not necessarily exist in all cases. For example, an investor selecting investments based solely on dividend yield, is not considering the value aspect of the equation.
New way of research. Analysis from an independent side. Both bullish and bearish points reviewed + valuation.
Todd at ValuePlays notifies us that Bruce Berkowitz just filed a 13G/A for his 10.6% stake in Mohawk Industries (MHK).
A look at Templeton’s 10 maxims and how they fit into today’s markets.
This short post by Todd Sullivan includes a video of Warren Buffett and Bill Gates being interviewed on Fox Business. The topic is missed acquisition opportunities.
Fortune lists 40 stocks on which a person can retire. The list includes eight stocks they label as “deep value.”
recently stumbled upon this article from William P. Bengen “DETERMINING WITHDRAWAL RATES USING HISTORICAL DATA”. The basic idea behind this research is that year over year fluctuations in annual returns could drastically change the standard of living of retired individuals, who rely on their investments for income.
Stock Analysis of Eli Lilly and Co. (LLY). The analysis includes a detailed PDF.
Canadian food retailing stocks have gone on sale, says star value manager Gaelen Morphet, first vice-president of Canadian equities at CIBC Global Asset Management.
Detailed Stock Analysis of the Exxon Mobil Corporation (XOM)
Now will people look at Dow?
Barely one day in, the Sun Valley conference has already helped to produce a multibillion-dollar merger deal — but not the kind you might expect. Dow Chemical has agreed to buy Rohm & Haas for $18.8 billion, with a big slug of financing from Warren Buffett, the legendary value investor who recently arrived in Sun Valley.
Investor Shelby Davis of the Clipper Fund used to say that the four most expensive words in investing are: “This time it’s different.”
Visit the ValuePlays Bookstore for Great Investing Books
Here are the week’s top stories at Value Investing News
During the great bear market of 1974, Warren Buffett was asked by a rather staid fellow how he felt. ‘Like an over-sexed guy in a whorehouse,’ he replied. ‘Now is the time to invest and get rich.’
I’ve had the good fortune of a friend loaning to me Seth Klarman’s Margin of Safety. The following are my notes on the chapter entitled “At the Root of a Value-Investment Philosophy” where Klarman writes about the three central elements to a value-investment philosophy.
Sir John M. Templeton, a Tennessee-born investor and philanthropist who amassed a fortune in global stocks and gave away hundreds of millions of dollars to foster understanding in what he called “spiritual realities,” died on Tuesday in Nassau, the Bahamas, where he had lived for decades. He was 95.
By the end of the year, Time Warner Cable (TWC), will be a stand alone entity after being spun off from Time Warner Inc. (TWX). TWC is a publicly traded company as it currently stands, 84% owned by its parent, Time Warner Inc. The carve-out occured early in 2007, trading between $36-43, but has plummeted down into the $20’s since.
My posts the next few weeks will focus on what I consider to be attractive names in the Financial Sector.
Some may have wondered what is the connection between Dividend and Value Investing. The connection does not necessarily exist in all cases. For example, an investor selecting investments based solely on dividend yield, is not considering the value aspect of the equation.
New way of research. Analysis from an independent side. Both bullish and bearish points reviewed + valuation.
Todd at ValuePlays notifies us that Bruce Berkowitz just filed a 13G/A for his 10.6% stake in Mohawk Industries (MHK).
A look at Templeton’s 10 maxims and how they fit into today’s markets.
This short post by Todd Sullivan includes a video of Warren Buffett and Bill Gates being interviewed on Fox Business. The topic is missed acquisition opportunities.
Fortune lists 40 stocks on which a person can retire. The list includes eight stocks they label as “deep value.”
recently stumbled upon this article from William P. Bengen “DETERMINING WITHDRAWAL RATES USING HISTORICAL DATA”. The basic idea behind this research is that year over year fluctuations in annual returns could drastically change the standard of living of retired individuals, who rely on their investments for income.
Stock Analysis of Eli Lilly and Co. (LLY). The analysis includes a detailed PDF.
Canadian food retailing stocks have gone on sale, says star value manager Gaelen Morphet, first vice-president of Canadian equities at CIBC Global Asset Management.
Detailed Stock Analysis of the Exxon Mobil Corporation (XOM)
Now will people look at Dow?
Barely one day in, the Sun Valley conference has already helped to produce a multibillion-dollar merger deal — but not the kind you might expect. Dow Chemical has agreed to buy Rohm & Haas for $18.8 billion, with a big slug of financing from Warren Buffett, the legendary value investor who recently arrived in Sun Valley.
Investor Shelby Davis of the Clipper Fund used to say that the four most expensive words in investing are: “This time it’s different.”
Visit the ValuePlays Bookstore for Great Investing Books
So, after the news of the past couple days, I have added to the position in Dow Chemical (DOW)
At prices averaging $32 even we tripled the position in Dow yesterday and today.
Current yield, 5.25% and rock solid safe. Think about it, Berkshire Hathaway’s (BRK.a) Warren Buffett only got 8.5% on his $3 billion convertible and it is underwater if shares are under $41 and change (28% higher than today) in 5 years ($41 is the conversion price).
Now, Warren’s 8.5% is stagnant. My dividend will grow and I will also gain the additional 28% price appreciation of the shares if they sit at $41 when Warren converts at no gain other than the interest he has received.
Dow has increased the dividend 18% over the past three years. Assuming a consistent growth, three years from now the dividend will be $1.94 for a yield on my investment of 6%. Again given the same growth, I will get $2.17 a share when Warren converts his shares and I will be yielding 6.8% on my initial investment.
The dividend growth enjoyed by shareholders may just turn out to be a conservative growth rate that I am using for comps. The reality may very well be far better than that but is very unlikely to be anything less than the current yield given the company’s history. Even were the dividend to stay flat for 5 years (again, very unlikely scenario), the common at these prices offers superior appreciation prospects.
When you add the 28% share price growth I will get in order for shares to get to $41, right now, common share buyers today are getting a better deal than Warren. He will receive interest totaling a 42.5% over the five years and if the dividend on the common stays the same for 5 five years, I will receive 26.25% plus the 28% appreciation in the shares for a total return of 54.25%. Should the dividend grow as is has, the return on my invested cash goes to 58% plus.
Chances do not come around very often to get a better deal than Warren….grab it.
Disclosure (“none” means no position):Long DOW, None
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Harley Davidson (HOG) is expanding its footprint overseas. With International sales increasing 16%-20% even in the current environment, the move makes perfect sense.
“Harley-Davidson, Inc. (HOG) today announced the signing of a definitive agreement to purchase the Italian motorcycle maker MV Agusta Group (MVAG). Under the agreement, Harley-Davidson will acquire 100 percent of MV Agusta Group shares for total consideration of approximately 70 million euros ($109 million), which includes the satisfaction of existing bank debt for approximately 45 million euros ($70 million). In addition, the agreement provides for a contingent payment to Claudio Castiglioni in 2016, if certain financial targets are met. MV Agusta Group is privately held, with the Castiglioni family owning 95 percent of MVAG shares.
The acquisition is expected to close in several weeks, pending the satisfaction of contingencies and receipt of regulatory approvals. Harley-Davidson intends to fund the transaction primarily through euro-denominated debt.
MV Agusta Group has two families of motorcycles: a line of exclusive, premium, high-performance sport motorcycles sold under the MV Agusta brand; and a line of lightweight motorcycles sold under the Cagiva brand. MV Agusta’s F4-R motorcycle, powered by a 1078cc in-line four-cylinder liquid cooled engine, is rated at 190 hp. The company sells its products through about 500 dealers worldwide, the vast majority of them in Europe. In 2007, MVAG shipped 5,819 motorcycles. During 2008 MVAG has significantly slowed production due to financial difficulties.
“Motorcycles are the heart, soul and passion of Harley-Davidson, Buell and MV Agusta,” said Harley-Davidson, Inc. Chief Executive Officer Jim Ziemer. “Both have great products and close connections with incredibly devoted customers. The MV Agusta and Cagiva brands are well-known and highly regarded in Europe. They are synonymous with beautiful, premium, Italian performance motorcycles,” Ziemer said.
Harley-Davidson, Inc. plans to continue to operate MV Agusta Group from its headquarters based in Varese, Italy. Following closing, the first priority will be to appoint a leadership team to include a new Managing Director and to resume the manufacture of current models.”
Full release
Disclosure (“none” means no position):Long HOG
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Barry Ritholtz has a great post on the companies currently under siege by short sellers.
Here is a portion:
“We’ve heard from oh-so-many people how whisper campaigns have brought down so many firms like Bear Stearns (BSC) and Indy Mac (IMB) and Fannie (FNM) and Freddie (FRE) and now Lehman Brothers (LEH).
Why is it that all these rumor-mongerers and shorts are only bringing some firms to their knees? How come they always seem to be the over-leveraged, under-capitalized, unhedged, most poorly-managed companies? Isn’t it funny that all of the firms that are the subject of such rumors have so many similar characteristics? Bear and Lehman and Fannie Mae and Freddie Mac and AIG and . . . the list goes on and on.”
Read Full Post
Disclosure (“none” means no position):None
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I really hope no one out there is surprised by this..
Back in April I said folks ought to get used to Wam-Mart (WMT) increasing its guidance. Today was no exception.
Wal-Mart reported a 5.8% increase in same store sales for the five weeks ending 7/4. Wal-Mart US was 6.1%, Sam’s Club was 4.6%. International sales held strong at 25% of the total.
Wal-Mart U.S.
All six merchandise units (grocery, entertainment, health and wellness, apparel, home and hardlines) achieved comparable store sales increases in the June five-week period. The strongest results remain in grocery, entertainment and health and wellness. Favorable weather and improved assortments helped drive seasonal sales in apparel, toys and hardlines. In addition, the economic stimulus checks contributed to increases in overall comparable store traffic results.
“Our underlying business is strong because of price leadership, clearly defined product offerings and a better store experience that continue to drive customers to our stores,” said Eduardo Castro-Wright, Wal-Mart U.S. president and chief executive officer. “Customers like what they are seeing and they’re shopping more of the store. Assortments and brands have improved, which bodes well for the upcoming seasons, including back-to-school.”
Sales in entertainment were strong, with flat panel television sets continuing to run high double-digit comparable store increases. Within apparel, sales of swimwear and sportswear were strong.
Sam’s Club
Sam’s Club sales during the June period had strengths in fresh foods, dry grocery and consumables. Video games and mattresses were among the best performing general merchandise categories. House wares and jewelry were soft. Seasonal hardline sales were also behind plan.
“Both traffic and ticket continued to increase with both our Business and Advantage members in June, even excluding fuel sales,” said Doug McMillon, Sam’s Club president and chief executive officer. “We continue to see a shift in the overall mix toward fuel, food and consumables, as our members manage through the current environment. Small business is especially price conscious in this environment and we remain committed to delivering value for them.”
Fuel sales were higher both in gallons and dollars sold, increasing comparable club sales with fuel by 3.7 percentage points. The transition of the clubs to back-to-college and fall merchandise is on schedule for later in the month.
“Our estimate for U.S. comparable store sales, excluding fuel, for the July four-week period is between two and four percent,” said Tom Schoewe, executive vice president and chief financial officer. “The Wal-Mart U.S. underlying business remains strong. However, consumers and small business owners remain concerned about the economy, inflation and most of all, higher gas prices. With the last large mailing of economic stimulus checks due this Friday, it is difficult to forecast the benefit from the economic stimulus through the remainder of the year.
“Because of our improved sales results during the quarter, we have updated our guidance estimate for earnings per share for the second quarter of fiscal year 2009 to a range of $0.82 to $0.84,” Schoewe said.
This all goes back to last fall when the “Save More Live Better” campaign was rolled out. At the the time I said:
“What Wal-Mart does with the ads is remind you what you can do with the money you save at their stores. Rather than the previous ad campaign that only told you they had “low prices” they are now saying “look at the fun things you can do with the money you save”. The images of a family vacation with the kids is sure to spur memories in people of their childhood and the desire to create similar memories with their kids”
It has resonated as folks pinched by fuel prices are going to Wal-Mart to stretch their dollars and be able to afford those very vacations in the commercial. It was the perfect campaign at the perfect time.
You know, I was hard on Scott for a while last year and actually called for him to go. Not long after he seems to have become far more shareholder friendly.
Glad I was wrong about him…… 🙂
Disclosure (“none” means no position):Long WMT, None
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Klarman, Jessie, Movies, Yang
– I wish his book was not $1000
– To quote Rodney Dangerfield, “Now I know why tigers eat their young“
– This is the only thing that makes flights tolerable…
– Jerry, just go away
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Klarman, Jessie, Movies, Yang
– I wish his book was not $1000
– To quote Rodney Dangerfield, “Now I know why tigers eat their young“
– This is the only thing that makes flights tolerable…
– Jerry, just go away
Visit the ValuePlays Bookstore for Great Investing Books
Upgrades
Bank of the Ozarks (OZRK)- Janney Mntgmy Scott Neutral » Buy
RehabCare (RHB)- Avondale Mkt Perform » Mkt Outperform
OfficeMax (OMX)- Credit Suisse Neutral » Outperform
Corus Entertainment (CJR)- Credit Suisse Neutral » Outperform
Sanderson Farms (SAFM)- BMO Capital Markets Market Perform » Outperform
Canadian Natrl Res (CNQ)- RBC Capital Mkts Sector Perform » Outperform
Elan (ELN)- UBS Sell » Neutral
PetroQuest Energy (PQ)- UBS Neutral » Buy
Calgon Carbon (CCC)- Morgan Joseph Sell » Hold
Norfolk Southern (NSC)- JP Morgan Neutral » Overweight
BP (BP)- HSBC Securities Neutral » Overweight
Downgrades
Interdigital Comm (IDCC)- Hilliard Lyons Buy » Neutral
SuccessFactors (SFSF)- Canaccord Adams Hold » Sell
Columbia Banking (COLB)- DA Davidson Neutral » Underperform
Anworth Mortgage (ANH)- Sterne Agee Buy » Hold
Flow (FLOW)- Northland Securities Outperform » Market Perform
Park National (PRK)- FTN Midwest Neutral » Sell
Global Payment (GPN)- Janney Mntgmy Scott Buy » Neutral
Dow Chemical (DOW)- BB&T Capital Mkts Buy » Hold
Valero Energy (VLO)- Caris & Company Average » Below Average
Hartford Financial (HIG)- Credit Suisse Outperform » Neutral
VeraSun Energy (VSE)- Piper Jaffray Neutral » Sell
Zumiez (ZUMZ)- William Blair Outperform » Mkt Perform
Nexen (NXY)- RBC Capital Mkts Outperform » Sector Perform
Luxottica (LUX)- Deutsche Securities Buy » Hold
Opnext (OPXT)- Merriman Curhan Ford Buy » Neutral
Manpower (MAN)- Banc of America Sec Buy » Neutral
Columbia Banking (COLB)- Keefe Bruyette Outperform » Mkt Perform
Entercom (ETM)- Citigroup Hold » Sell
Cox Radio (CXR)- Citigroup Hold » Sell
Matsushita Elec (MC)- HSBC Securities Overweight » Neutral
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