value investing posts
"For good reason, there are hundreds of investment managers who are devout Warren Buffett-style value investors," observes Ian Wyatt.
The editor of The 100K Portfolio explains, "From 1965 to 2010, under Buffett's leadership, Berkshire Hathaway (BRK.A or BRK.B) has seen it's per share book value increase at an annual rate of 20.2 percent.
"Since Warren Buffett is now 80 years young, and his partner Charlie Munger is 87, the future leadership of Berkshire is certainly a concern.
Continue reading Berkshire Hathaway Offers Vision and Value
"Benjamin Graham has been recognized for decades as the father of value investing; Warren Buffett was a student of Ben Graham at Columbia University and later worked for Mr. Graham for several years," notes J. Royden Ward.
The editor of the Cabot Benjamin Graham Value Letter explains, "We've combined Warren Buffett's and Ben Graham's investing criteria for choosing stocks and and found six high-quality companies.
"We believe that the six stocks that passed our screen each sell at sensible prices, offer reasonable appreciation potential, and provide solid dividends.
Continue reading Double Values: 6 Stocks That Meet Buffett and Graham Criteria
"Ensco PLC (ESV
), a London-based firm which provides offshore drilling services, operates eight ultra-deepwater semi-submersible rigs, as well as 40 premium jackup rigs," notes John Reese
The editor of Validea
explains, "The stock, which has a $7.7 billion market cap, gets strong interest from the models I base on the writings of value investor Benjamin Graham. Indeed, the stock earns a 100% rating under my Ben Graham model.
Continue reading Ensco: A Ben Graham Value in Drilling
"Many of the best opportunities lie outside the major indices, where a myriad of good stocks can fly under the radar. In fact, isn't a member of the S&P 500 or the Dow," says John Reese.
The editor of Validea explains, "Atwood Oceanics (ATW), a Houston-based offshore oil drilling firm, gets strong interest from both my Benjamin Graham- and Peter Lynch-inspired strategie.
"With a $2.4 billion market cap. Atwood has been a big winner for one of my most stringent -- and most successful -- strategies, the model I base on the writings of the late Benjamin Graham.
Continue reading Atwood Oceanics (ATW): 'Under the Radar'
We are only one month into the new year and there have not been many dull moments. Games are going on in the Middle East and they are not the friendly kind. In Egypt a million plus protesters
are playing a game of chicken with the Mubarak government demanding he step down from his 32-year-old reign as perpetual president.
This is not radical Islam fundamentalists; it is even more fundamental. The people want to improve their daily lives in a meaningful way. Education, infrastructure, clean water and clean streets. Speaking of infrastructure and getting back to the less dramatic but still important great stock picks Telefonica (TEF
) and General Electric (GE
) were the big winners so far bouncing over 10% in January.
Continue reading Chasing Value: 2011 Picks Dust the S&P
Last year, Archer Daniels Midland (ADM) was included in my stock picks for 2010 and it lost 4.9%. I gave some consideration to keeping it in the mix this year but thought more highly of other stocks in 2011, so I cast it off.
The turning of a calendar page is arbitrary and investments have only modest correlation to it in most instances. However, two weeks into the year ADM is already up, closing Wednesday at $32.56.
Corn prices have been rising and when last I checked futures were up another 1.47% in early morning trading.
Continue reading Chasing Value: Corn Soaring, ADM Boring, Investors Snoring
In Part 1 of this series
I discussed starting with a good story and then examining the metrics, or first starting with the metrics via a stock screen and then look at the story behind the numbers.
A third possibility is to start with an idea that springs off the pages of a business journal. Some years ago, in the 25th anniversary edition of Money Magazine they listed a group of stocks that had gone up during this tenure. The one I liked the best that withstood closer scrutiny was Southern Company (SO
), the electric utility.
The story and the metrics were great. It was located in one of the most desirable growth areas of the country. There was a favorable business climate, cheap housing, cheap land, good weather and an abundance of labor. The numbers were strong as well.
Continue reading Chasing Value: How to Find Value Stocks -- Part 2
On Friday I had the opportunity to present an investment strategy I developed over the past few years to a major asset manager interested in learning the intricacies. Among the questions he asked, one that comes up often, is how do I go about finding particular stocks that I think might be of value.
The answer of course is not so simple, because like any other type of discovery they come about in a variety of ways. Sometimes it begins with a story, as it did in December 2008 when I included EZCorp (EZPW) among my 2009 stock picks (and 2010 and 2011). In this case I was pondering what was going to be safe, and perhaps even in growing demand during a year of financial turmoil and high unemployment. The answer was pawn shops and cash-advance stores.
Continue reading Chasing Value: How to Find Value Stocks -- Part 1
Here are the next four of my 2011 picks. I am behind schedule, after publishing the first 5 earlier in the week (see: Chasing Value: 2011 Stock Picks -- 5 of 11). This year instead of starting completely anew, I am adjusting my 2010 picks. There is no sense in abandoning good ideas just because the calendar turned a page.
You will actually find support of running themes I have been writing about over the past few months. One of these is the idea of making a contrarian investment in a basket of stocks that have been both scalded and scolded in the headlines. Six stocks were included in such a group that I called the "toxic stocks" (see: Chasing Value: Toxic Stock Update #3 -- BAC, BP, C, GE, GS, RIG).
Continue reading Chasing Value: 2011 Stock Picks -- 6, 7, 8, 9
"Quality companies with low price-to-book value ratios (P/BV) have outperformed companies with higher valuations for the past three-, five- and 10-year periods," says J. Royden Ward.
The editor of the Cabot Benjamin Graham Value Letter explains, "Our search for undervalued companies to with price to book value ratios found three stocks in tech-related sectors: Kyocera (KYO), PC Connection (PCCC), and Thermo Fisher Scientific (TMO).
"To find the best stocks with low price-to-book value ratios, we required Value Line Financial Strength ratings of A or better, dividend payments increasing over time, low P/E ratios and good earnings prospects for the next 12-month and five-year periods.
Continue reading Ben Graham Techs? A Trio of Low P/E-to-Book Value Buys
Only one month ago, I reminded readers about one of the comeback stories of the last five years and maybe longer: Chasing Value: Newcastle Shares Flying off the Shelf
. Newcastle Investment (NCT
) reported good news
, blasting past the few that bothered to make any earnings estimate with Q3 GAAP EPS $2.61 vs. consensus $0.33.
On October 7, 2010 NCT closed the day at $3.84. Now it is exactly one dollar higher trading at $4.84 or 26% (update: closing price $4.92) in a month! The story is worth checking out because even with all the good news, I think there is still plenty of room to run as the company heals itself over time.
Continue reading Chasing Value: Newcastle Reports Great Results
"Texas Instruments (TXN) was roughed up pretty badly in 2008 and 2009. Profits fell sharply for this semiconductor giant, as did the stock price," says dividend reinvestment plan specialist Chuck Carlson.
The editor of The DRIP Investor explains, "The shares plummeted from nearly $40 per share in 2007 to $13 in early 2009. The stock has come roaring back from the 2009 lows, paced by impressive rebounds in sales and profits.
"For 2010, Texas Instruments should post record per-share profits in the vicinity of $2.47 per share. Based on that estimate, the stock seems cheap at less than 12 times earnings.
Continue reading Texas Instruments (TXN): Growth and Value
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