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Why You Should Invest Like Warren Buffett

Abdul Farukhi — Mon, 25 Jan 2010 18:30:00 EST

The following article was contributed via Seed.com, AOL's new platform for freelance writers.

Warren Buffett is one of the few investors in the world that has consistently succeeded where others failed. Part of his success is due to his common sense approach to the stock market. Investors have mocked Buffett for his old fashioned approach to investing when he sat out the dot com era bubble. But Buffett had the last laugh when others lost out during the bust.

Buffett also managed to largely avoid the major losses investors faced when they invested in securities dependent on subprime lending practices. In fact, he managed to profit from it.

Here are some principles Warren Buffett follows and investors would be wise to model:

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Why You Should Invest Like Warren Buffett originally appeared on BloggingStocks on Mon, 25 Jan 2010 18:30:00 EST. Please see our terms for use of feeds.

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Analyst initiations 7-31-07: AKAM, BGFV, DOV and SNIC

Kevin Shult — Tue, 31 Jul 2007 11:04:00 EST

Filed under: Analyst Reports, Analyst Initiations, Akamai Technologies (AKAM)

MOST NOTEWORTHY: Big 5 Sporting Goods (BGFV), Nutrition 21 (NXXI), Sonic Solutions (SNIC), AeroGrow (AERO) and Sequenom (SQNM) were today's noteworthy initiations:

Nollenberger believes Big 5 Sporting Goods' (NASDAQ: BGFV) shares are fairly valued and would likely get more constructive near the $20 level and initiated shares with a Neutral rating.

ThinkEquity said Nutrition 21 (NASDAQ: NXXI) has a number of clinically proven nutritional supplements that target the rapidly growing obesity and diabetes markets, and initiated shares with a Buy rating.

SMH Capital initiated shares of Sonic Solutions (NASDQ: SNIC) with a Buy rating, on the belief that shares have been oversold.

ThinkEquity is positive on AeroGrow's (NASDAQ: AERO) proprietary aeroponic technology and recurring revenue model and initiated shares with a Buy rating.

Leerink Swann started shares of Sequenom (NASDAQ: SQNM) with an Outperform rating as MEDACorp researchers are positive regarding the company's MassARRAY system for genetic analysis, which is well-positioned for growth in follow-on SNP fine-mapping studies; Leerink anticipates in 2008, the company will launch iPLEX 3, which is currently in development, and reduce the cost of acquiring fine-mapping SNP data...

OTHER INITIATIONS:

Dover (NYSE: DOV) was initiated at Morgan Stanley with an Overweight rating.

Merrill started Akamai (NASDAQ: AKAM) with a Neutral rating.

Pacific Crest started Wipro Ltd (NYSE: WIT) with a Sector perform.

Susquehanna initiated Herman Miller (NASDAQ: MLHR) with a Positive rating.

RBC Capital initiated Warren Resources (NASDAQ: WRES) with an Outperform rating.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Analyst initiations 7-31-07: AKAM, BGFV, DOV and SNIC originally appeared on BloggingStocks on Tue, 31 Jul 2007 11:04:00 EST. Please see our terms for use of feeds.

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Buffett's big buy: Our top picks include Allstate, Lowe's, Target

Sarah Gilbert — Fri, 11 May 2007 20:49:00 EST

Filed under: Deals, Newspapers, Magazines, General Electric (GE), Allstate Corp (ALL), Lowe's Cos (LOW), Lehman Br Holdings (LEH), Progressive Corp,Ohio (PGR)

When Warren Buffett announced he wanted to use between $40 and $60 billion to buy a company several days ago, picking a target for the billionairest of all billionaires became the favorite pastime of financial writers everywhere -- and our bloggers were as eager as anyone else to come up with just the thing for the guy who already has everything (and everything, in this case, includes bunches of shares of companies as diverse as dull sheetrock manufacturer USG Corp. (NYSE: USG) to hip shoe company Nike Inc. (NYSE: NKE)).

Of course, Buffett's needs are unique. First of all, the company has to be both big and a good value -- no 80x P/E multiples for Warren. It has to be a relatively simple business (I'm thinking nanotech is out), have a good management team and no dark and dirty secrets (so sub-prime lenders are probably off the list). Finally, the company should have solid, long-term competitive advantages.

Sheldon Liber suggests a couple that might make the grade: Allstate Corp. (NYSE: ALL), the insurance company, which at about $38 billion in market capitalization and a 7.8x P/E ratio fits both the "big" and "cheap" qualifiers. Plus, we all know that Warren Buffett loves insurance companies, and given its retail approach, it's not much of a competitor with longterm portfolio company GEICO. Emerson Electric (NYSE: EMR) also seems a good candidate with its $37 billion market cap and 19x P/E ratio -- but is it simple enough? Its business is, according to Hoover's, making "a host of electrical, electromechanical, and electronic products, many of which are used to control gases, liquids, and electricity." Hmmm.

When Gary Sattler suggests Warren might buy General Electric Co. (NYSE: GE)'s plastics division, it's a good concept (simple, well-managed) but the price is way too low at around $10-12 billion. A commenter, however, brings up a good replacement in Lowe's Companies Inc. (NYSE: LOW); it has a $47 billion market cap and a reasonable P/E ratio of 15.5x. What's more, it has none of the bad-management baggage of competitor Home Depot Inc. (NYSE: HD). Does it have a "moat," though? I suppose that's a question for Warren. He does own some of each company, meaning that he's already emotionally invested in the sector (a plus) although it's obvious from our near-tie in the Battle of the Brands that neither holds a substantial consumer-facing edge competitively.

Continue reading Buffett's big buy: Our top picks include Allstate, Lowe's, Target

Buffett's big buy: Our top picks include Allstate, Lowe's, Target originally appeared on BloggingStocks on Fri, 11 May 2007 20:49:00 EST. Please see our terms for use of feeds.

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