BloggingStocks

All Aboard the Rails

Jason Raznick — Mon, 07 Mar 2011 00:40:00 EST

The Obama administration has agreed to scale back requirements for new anticollision technology on freight trains, known as Positive Train Control (PTC). This stands to benefit companies such as CSX (CSX), Union Pacific (UNP), Norfolk Southern (NSE) and Berkshire Hathaway's (BRK.A) Burlington Northern Santa Fe.

PTC technology will automatically stop the train if a conductor misses its stop signal, coming in light of a 2008 train collision which killed 25 people.

This could possibly add 25% to CSX's free cash flow, which at these levels would make CSX and other rail companies undervalued by these metrics.

Jason is a co-founder of Benzinga.com.

All Aboard the Rails originally appeared on BloggingStocks on Mon, 07 Mar 2011 00:40:00 EST. Please see our terms for use of feeds.

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Chasing Value: Apple Does Not Need $50 Billion

Sheldon Liber — Thu, 21 Oct 2010 15:00:00 EST

Filed under: Other Issues, Management, Rants and Raves, Competitive Strategy, Apple Inc (AAPL), Berkshire Hathaway (BRK.A), Market Matters, Boeing Co (BA), News Corp'B' (NWS), Chasing Value[TM]

Steve Jobs, the illustrious CEO and the heart and soul of Apple Inc. (AAPL) would have you believe that Apple cannot issue a dividend to shareholders because of the scary competitive business environment. He conveys to us that they need the money to overcome hardship and if the right opportunity comes along make key acquisitions.

This is utter nonsense, a supreme untruth, wasted breadth and a failure to come to grips with reality. In the past quarter Apple increased its cash and short term investments to $50 billion as I wrote it would six weeks ago.

Apple currently has 914 million outstanding shares. With the stock trading around $300 per share, a 2% dividend yield would require $6 per share or, $5.5 billion dollars annually to cover the distribution.

Continue reading Chasing Value: Apple Does Not Need $50 Billion

Chasing Value: Apple Does Not Need $50 Billion originally appeared on BloggingStocks on Thu, 21 Oct 2010 15:00:00 EST. Please see our terms for use of feeds.

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Closing Bell: Slow Growth, Still Growth (MFE, SYMC, TNAV, ALU, K, BRK-A, RIMM, MRK)

Jon Ogg — Fri, 30 Jul 2010 16:10:00 EST

Filed under: Berkshire Hathaway (BRK.A), Research in Motion (RIMM), Merck and Co (MRK), Alcatel-LucentADS (ALU)

A reading of +2.4% GDP is still growth. It is just not very robust growth. It is also as the argument continues of whether the U.S. is headed for a double-dip recession or just a period of slower growth. PIMCO's Bill Gross calls it a long protracted period of slow growth. Today was lighter than normal on the earnings news, and the final verdict over a green or red ticker at the close was not clear until the final minutes today.

Here were the unofficial closing bell levels:

Dow Jones 10,465.94 -1.22 (-0.01%)
S&P 500 1,101.59 +0.06 (0.01%)
Nasdaq 2,254.70 +3.01 (0.13%)

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Continue reading Closing Bell: Slow Growth, Still Growth (MFE, SYMC, TNAV, ALU, K, BRK-A, RIMM, MRK)

Closing Bell: Slow Growth, Still Growth (MFE, SYMC, TNAV, ALU, K, BRK-A, RIMM, MRK) originally appeared on BloggingStocks on Fri, 30 Jul 2010 16:10:00 EST. Please see our terms for use of feeds.

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Closing Bell: Santa and Eggnog Preside over Stocks (IBM, BRK.A, UAUA, FNM, FRE AAPL)

Jon Ogg — Mon, 28 Dec 2009 16:00:00 EST

Filed under: Apple Inc (AAPL), Berkshire Hathaway (BRK.A), International Business Machines (IBM), Federal Natl Mtge (FNM), UAL Corp (UAUA)

Today was a low volume trading day without much economic fanfare as many market participants were out or were talking about the Christmas holiday rather than the markets. The manufacturing output was reported for the Dallas and Chicago Fed Districts, but this in and of itself is rarely enough to heavily influence the markets. There will be more traders around on Tuesday and Wednesday most likely, but then it is likely to peter out again on Thursday ahead of the New Year's Day holiday this Friday. The markets were mixed throughout the trading day, and the real position for an up-close or down-close was something not known until the very end of the trading day.

Here are today's unofficial closing bell levels:

Dow 10,547.30 +27.20 (0.26%)
S&P 500 1,127.78 +1.30 (0.12%)
Nasdaq 2,291.08 +5.39 (0.24%)

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Continue reading Closing Bell: Santa and Eggnog Preside over Stocks (IBM, BRK.A, UAUA, FNM, FRE AAPL)

Closing Bell: Santa and Eggnog Preside over Stocks (IBM, BRK.A, UAUA, FNM, FRE AAPL) originally appeared on BloggingStocks on Mon, 28 Dec 2009 16:00:00 EST. Please see our terms for use of feeds.

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Closing Bell: Jobs & Productivity Hat Trick Rally (SIRI, BRK-A, ORCL, JAVA, BAC)

Jon Ogg — Thu, 05 Nov 2009 16:00:00 EST

High productivity all helped fuel the rally today, partly in hopes that this leads to more hiring in 2010. The lowest number of new jobless claims since January helped as well as the DJIA was floating right around the 10,000 mark at the closing bell.

Here were today's unofficial closing bell levels:

Dow 10,005.96 +203.82 (2.08%)
S&P 500 1,066.63 +20.13 (1.92%)
Nasdaq 2,105.32 +49.80 (2.42%)

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Continue reading Closing Bell: Jobs & Productivity Hat Trick Rally (SIRI, BRK-A, ORCL, JAVA, BAC)

Closing Bell: Jobs & Productivity Hat Trick Rally (SIRI, BRK-A, ORCL, JAVA, BAC) originally appeared on BloggingStocks on Thu, 05 Nov 2009 16:00:00 EST. Please see our terms for use of feeds.

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Closing Bell: Dow jumps 5%; C, BRK.A, WFMI, DNA, ERIC rise

Jon Ogg — Mon, 24 Nov 2008 16:15:00 EST

Filed under: After the Bell, Berkshire Hathaway (BRK.A), Market Matters, Citigroup Inc. (C), Whole Foods Market (WFMI), Genentech Inc (DNA)

Today's atrocious housing data was already a given, and the markets keyed off of additional strength from Friday on the introduction of the Obama Financial team today. We are also coming off of severely oversold conditions and much of the rally seen was technical rather than fundamental.

Here are today's unofficial closing levels:

DJIA: 8443.39 (4.93%)
NASDAQ: 1472.02 (6.33%)
S&P 500:851.81 (6.47)

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Berkshire Hathaway Inc. (NYSE: BRK.A) was written up in Barron's after closing at $90,000 on Friday and seeing a low of $74,100 last week. The "financial bible" publication believes that the stock now finally looks cheap. Shares were up almost 4% at $93,300.00 right before the close.

Citigroup Inc. (NYSE: C) was a huge gainer after the government bailout that Wall Street wanted finally came to save the stock. The US Government is injecting $20 billion in fresh capital and will absorb most of the potential losses on a $306 billion pool of high risk assets. The government will also receive preferred shares with an 8% yield and Citi's common stock dividend will go down to $0.01. Shares were up a whopping 60% at $6.04 right before the close.

Continue reading Closing Bell: Dow jumps 5%; C, BRK.A, WFMI, DNA, ERIC rise

Closing Bell: Dow jumps 5%; C, BRK.A, WFMI, DNA, ERIC rise originally appeared on BloggingStocks on Mon, 24 Nov 2008 16:15:00 EST. Please see our terms for use of feeds.

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Buffett can't be right every time

Douglas McIntyre — Sat, 08 Nov 2008 07:12:00 EST

Filed under: Berkshire Hathaway (BRK.A)

Berkshire Hathaway (NYSE: BRK.A) has a very ordinary quarter, but by founder Warren Buffett's standards it was awful. The company's insurance operations were hurt by hurricane claims. The other factor that damaged earnings was losses on derivatives. Buffett is supposed to think derivatives are for idiots, so it is not clear how that part happened.

Berkshire's net income fell to $1.06 billion, or $682 per Class A share, from $4.55 billion, or $2,942, in the period a year ago. Operating profit fell 18% to $2.07 billion, or $1,335 per share, from $2.56 billion, or $1,655. According to Reuters, "It fell short of analysts' average expectation for $1,429 per share, according to Reuters Estimates."

No one in his right mind would go through Buffett's 10-Q. It is as thick as the New York City phone book. The company still has an astonishing $50 billion on its balance sheet, which means Berkshire has a great deal of capital to buy companies it thinks are undervalued during the recession, a favorite Buffett habit.

For anyone who cares, the tiny Berkshire group that controls private jet company NetJets, Dairy Queen, public relations operation BusinessWire, and the Buffalo News did just fine.

How Buffett does it is anyone's guess. Who makes sure BusinessWire is doing OK?

Douglas A. McIntyre is an editor at 24/7 Wall St.

Buffett can't be right every time originally appeared on BloggingStocks on Sat, 08 Nov 2008 07:12:00 EST. Please see our terms for use of feeds.

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Warren Buffett finds opportunities in... Germany?

Tom Taulli — Mon, 19 May 2008 17:00:00 EST

Filed under: Berkshire Hathaway (BRK.A)

Across Germany, there are many large family-owned businesses some of which go back several hundred years.

So, with more than $35 billion in his war chest, Berkshire Hathaway's (NYSE: BRK-A) Warren Buffett wants to buy some of them.

In fact, this week he's on a tour of Germany - as well as other European countries -- to let people know that he's ready for deal making.

Of course, in the United States, Buffett has been successful in buying up family-owned businesses. For example, he has recently helped with the purchase of Wrigley (NYSE: WWY).

But will Germany warm up to him?

Perhaps so. After all, Buffett allows managers to remain independent. Plus, Germany has many traditional businesses, such as in consumer products and manufacturing.

Something else: Timing is important. After World War II, Germany had to rebuild its industrial infrastructure. And, no doubt, the owners of these businesses must now deal with the complex issues of succession.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Warren Buffett finds opportunities in... Germany? originally appeared on BloggingStocks on Mon, 19 May 2008 17:00:00 EST. Please see our terms for use of feeds.

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Why Garmin Ltd (GRMN) won't be rebounding soon

Timothy Sykes — Mon, 05 May 2008 10:10:00 EST

Filed under: Google (GOOG), Apple Inc (AAPL), Berkshire Hathaway (BRK.A), Bargain Stocks, Stocks to Sell, Garmin Ltd (GRMN)

While researching GPS maker Garmin Ltd (NASDAQ: GRMN) -- whose stock has lost two-thirds of its value in the last six months -- I can't help but pity those long-term shareholders who reject trend following and technical analysis in favor of investing for the long term. To them, it seemed like only yesterday that GPS was one of the hottest technologies around and this industry leader could do no wrong.

Well, that's usually the time to sell, just as I posted on Apple Inc (NASDAQ: AAPL) in January this year and on Google Inc (NASDAQ: GOOG) in November last year, both before they each dropped 40% in just a few months. Because the truth is these popular technology stocks are all expectations. We're not talking Berkshire Hathaway (NYSE: BRK.A)-type value investing here.

Sure, GPS is still hot, somewhat, but due to intense competition, margins have been evaporating, forcing analysts to lower their earnings estimates. In their latest quarter, Garmin further strengthened the bear case with spiking inventories and accounts receivable. None of that looks to change anytime soon, and even though it's got a P/E of 10, book value is all the way down near $11 per share!

Continue reading Why Garmin Ltd (GRMN) won't be rebounding soon

Why Garmin Ltd (GRMN) won't be rebounding soon originally appeared on BloggingStocks on Mon, 05 May 2008 10:10:00 EST. Please see our terms for use of feeds.

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Warren Buffett buys cheese, Krafty cheese

Jon Ogg — Thu, 26 Jul 2007 11:15:00 EST

Filed under: Newspapers, Berkshire Hathaway (BRK.A), Kraft Foods'A' (KFT)

The Wall Street Journal has indicated that Warren Buffett's Berkshire Hathaway (NYSE: BRK-A) has taken a 5% stake in Kraft Foods Inc. (NYSE: KFT). The stake is under 5% and looks like it was made before activist investor Norman Peltz piled into the food giant, which is under pressure from Carl Icahn as well.

What is odd is that the newspaper noted that it was unclear if Buffett sided with activist investors Peltz and Icahn. This is somewhat amusing when you consider that Buffett invests his monies on a somewhat passive basis and does more voting type initiatives. He rarely steps in and demands that companies leverage their balance sheets or pursue rapid share buybacks for a short term boost. Those initiatives are usually risks to companies because the leverage can hurt on a long term basis. Buffett always looks at these matters in the long term, even if he only holds some of these passive investments for a few quarters.

If you can figure out an average price he paid, probably in the mid-$30s, you can bet that at that price the Oracle of Omaha was thinking there was long term value in Kraft. Based on a $1.80 estimate from First Call for 2007, Kraft trades at 18.8 times 2007 estimates after the 2% drop seen this morning.

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Warren Buffett buys cheese, Krafty cheese originally appeared on BloggingStocks on Thu, 26 Jul 2007 11:15:00 EST. Please see our terms for use of feeds.

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Buffett pans newspapers, McClatchy chain at 52-week low

Douglas McIntyre — Fri, 02 Mar 2007 12:36:00 EST

Filed under: SEC Filings, Forecasts, Bad News, Industry, Walt Disney (DIS), Tribune Co. (TRB)

Buried in Warren Buffett's annual shareholder letter was a reference to the dying newspaper industry. Berkshire (NYSE:BRK-A) owns the large daily in Buffalo and Buffett has been on the board of newspaper firms including The Washington Post (NYSE:WPO) and Capital Cities/ABC, now a part of Disney (NYSE:DIS).

If anyone needs proof of how poorly the public newspaper chains are doing, they only need to look at McClatchy (NYSE:MNI), one of the largest. The firm made a point of doubling down on its bet on the industry by buying Knight-Ridder last year. The result has been a train wreck.

McClatchy seems to make a new low every day. The stock now trades at $36.68. Over the last two years, the shares are down almost 50% against a move up of almost 20% for the S&P. McClatchy bought more newspapers in the teeth of a secular decline in circulation and advertising that is not likely to abate. The company's ad revenue dropped over 5% in January. The company's 10-K shows that most of its large newspapers like the Miami Herald lost circulation last year.

After showing net profits for 2002 through 2005, McClatchy had a net loss of $155 million in 2006, much of it from discontinued operations. The company has long-term debt of almost $3.3 billion.

McClatchy may survive the pounding that newspapers are taking, but it is almost impossible to see how it will prosper.

Douglas A. McIntyre is a partner at 247WallSt., LLC.

Buffett pans newspapers, McClatchy chain at 52-week low originally appeared on BloggingStocks on Fri, 02 Mar 2007 12:36:00 EST. Please see our terms for use of feeds.

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