You can always tell when Warren Buffett gets anxious. At the end of 2007, his firm, Berkshire Hathaway (NYSE: BRK-A), was sitting on $44 billion in cash and investments. And that was too much money lying around, as far as he was concerned. So in 2008, he spent billions to acquire partial stakes in several blue chips firms such as General Electric  and Goldman Sachs. Those buys pushed Berkshire’s cash balance down to a more reasonable $25 billion by the end of 2008. As Bloomberg News noted in October 2013, Buffett “likes to keep… Read More

You can always tell when Warren Buffett gets anxious. At the end of 2007, his firm, Berkshire Hathaway (NYSE: BRK-A), was sitting on $44 billion in cash and investments. And that was too much money lying around, as far as he was concerned. So in 2008, he spent billions to acquire partial stakes in several blue chips firms such as General Electric  and Goldman Sachs. Those buys pushed Berkshire’s cash balance down to a more reasonable $25 billion by the end of 2008. As Bloomberg News noted in October 2013, Buffett “likes to keep $20 billion on hand should the reinsurance operations need to pay large claims.” If Buffett thought he was sitting on too much cash seven years ago, his troubles have grown larger. At the end of Q2 2014, Berkshire Hathaway held $55 billion in cash and investments — a company record. Now, chatter is rising that Buffett is ready to plow that cash into another major acquisition. At the end of the day, the main point is not which companies Buffett buys. Instead, it’s what constitutes a great acquisition. In effect, if such companies are good enough for Buffett, then they… Read More

There is a phenomenon known as the “Icahn Lift.” This is the term used when the stock price of a company rises after Carl Icahn acquires shares —  sometimes even when there’s only speculation that he will invest. The latest company to get the “Icahn Lift” is Whole Foods Market (Nasdaq: WFM). While there’s serious doubt he actually owns shares of Whole Foods, shareholders could use a little of Carl Icahn’s magic. Shares of the company are down almost 34% year-to-date. On a trailing basis, Whole Foods’ stock trades… Read More

There is a phenomenon known as the “Icahn Lift.” This is the term used when the stock price of a company rises after Carl Icahn acquires shares —  sometimes even when there’s only speculation that he will invest. The latest company to get the “Icahn Lift” is Whole Foods Market (Nasdaq: WFM). While there’s serious doubt he actually owns shares of Whole Foods, shareholders could use a little of Carl Icahn’s magic. Shares of the company are down almost 34% year-to-date. On a trailing basis, Whole Foods’ stock trades at a price-to-earnings ratio of 25, which is well below its five-year average P/E ratio of 37. The problem is that Whole Foods is not growing as fast as it once was. There are only so many affluent neighborhoods in the United States. As Whole Foods expanded into lower income markets, it found that its new clientele can’t afford to load up their carts and as a result, the newer stores are not doing as well. But slow growth is still growth nonetheless. In the third quarter, total revenues at Whole Foods increased 10.5%… Read More

For long-term investors, there’s nothing better than “Forever Stocks” — shares of firms that are head-and-shoulders above the competition and that are so structurally sound that you can basically own them forever. What long-term investors like just as much is when the crowd is scared out of a Forever Stock, creating a rare opportunity to buy these high-quality shares at a reduced price. Indeed, one the best Forever Stocks is available at an incredible bargain, with shares off sharply in the wake of a surprise second-quarter earnings disappointment. For the quarter, the firm reported earnings per share (EPS)… Read More

For long-term investors, there’s nothing better than “Forever Stocks” — shares of firms that are head-and-shoulders above the competition and that are so structurally sound that you can basically own them forever. What long-term investors like just as much is when the crowd is scared out of a Forever Stock, creating a rare opportunity to buy these high-quality shares at a reduced price. Indeed, one the best Forever Stocks is available at an incredible bargain, with shares off sharply in the wake of a surprise second-quarter earnings disappointment. For the quarter, the firm reported earnings per share (EPS) of $1.11, missing analyst estimates by $0.02. For this, the market saw fit to beat the stock down 12%. A 12% drop for a 2% miss may seem pretty irrational, but it doesn’t faze long-term investors. Any reason will do to get a bargain on Eaton Corp. (NYSE: ETN). This firm is a global leader in power management solutions — things like electrical, mechanical, hydraulic and drivetrain systems — for the automotive, aerospace and agricultural industries. A few variables hindered Eaton in the second quarter. The firm paid $39 million to restructure its industrial segment, $644… Read More

One of the most interesting holdings in the Berkshire Hathaway (NYSE: BRK-A) portfolio is VeriSign (NASDAQ: VRSN), which specializes in domain names and internet security. What makes the company interesting is that VeriSign is a tech company and Warren Buffett famously said that he doesn’t invest in technology.  His stock picking prowess has made him arguably the greatest investor of all-time, and when Berkshire buys something, other investors want to get in on the action. So when Buffett contradicts himself, it is worth taking note. #-ad_banner-#​He prefers to stick to financials,… Read More

One of the most interesting holdings in the Berkshire Hathaway (NYSE: BRK-A) portfolio is VeriSign (NASDAQ: VRSN), which specializes in domain names and internet security. What makes the company interesting is that VeriSign is a tech company and Warren Buffett famously said that he doesn’t invest in technology.  His stock picking prowess has made him arguably the greatest investor of all-time, and when Berkshire buys something, other investors want to get in on the action. So when Buffett contradicts himself, it is worth taking note. #-ad_banner-#​He prefers to stick to financials, railroads and companies he can easily understand. Technology is not his thing. What many investors might not know is that Buffett, at 83 years old, is grooming two men to take over when the time is right. And the purchase of VeriSign is indicative of the changes Ted Weschler or Todd Combs are making behind the scenes at Berkshire. So let’s take a look at the two Berkshire-teers‘ unorthodox purchase. VeriSign has worked hard to build a strong moat against competitors by accruing exclusive contracts with ICANN… Read More

December 2, 2004 was a pretty good day for Steve Ballmer. On that day, the 49-year-old CEO of Microsoft received a dividend check worth $1.2 billion. Bill Gates, co-founder and Chairman of Microsoft at the time also got a big check. He collected more money in dividends than most people could earn in a thousand lifetimes — nearly $3.4 billion. If you think these two men received these checks because they were Microsoft executives who owned a lot of company stock, you’re right… but only partially. #-ad_banner-#There’s another reason they got this massive payday… a reason that could bring you… Read More

December 2, 2004 was a pretty good day for Steve Ballmer. On that day, the 49-year-old CEO of Microsoft received a dividend check worth $1.2 billion. Bill Gates, co-founder and Chairman of Microsoft at the time also got a big check. He collected more money in dividends than most people could earn in a thousand lifetimes — nearly $3.4 billion. If you think these two men received these checks because they were Microsoft executives who owned a lot of company stock, you’re right… but only partially. #-ad_banner-#There’s another reason they got this massive payday… a reason that could bring you thousands of dollars in 2014. As you know, most dividend-paying stocks pay quarterly. Occasionally, you’ll find a stock that pays monthly. To most investors, that’s as good as income investing gets. But what the majority of investors don’t realize is this: The stocks that give you the most potential for low-risk, high yields of 10% or more are from companies that have boatloads of cash and a history of paying special dividends. In fact, it’s entirely possible to collect 9 years of quarterly dividend payments (or more) in just one day by investing in dividend payers like this, which I’ll… Read More

Let me tell you, if you are a contrarian investor and looking for a place to hunt for bargains, this is it. Are you familiar with the S&P/TSX Venture Composite Index?  Standard and Poors describes this index as “a broad market indicator of Canadian micro cap securities in Canada.”  This index of stocks has been beaten down relentlessly. Check out the performance for the index over its recent history. It is truly a chart that only a bargain hunter could love. Read More

Let me tell you, if you are a contrarian investor and looking for a place to hunt for bargains, this is it. Are you familiar with the S&P/TSX Venture Composite Index?  Standard and Poors describes this index as “a broad market indicator of Canadian micro cap securities in Canada.”  This index of stocks has been beaten down relentlessly. Check out the performance for the index over its recent history. It is truly a chart that only a bargain hunter could love. This entire index of stocks needs to increase by 250% just to get back to where it was in early 2011. The performance of this index has been so miserable that today a full five years after the global financial crisis stock prices are back near the lows seen in those dark days. #-ad_banner-#​This performance is terrible on its own. When you compare it with the S&P 500 (which has nearly tripled from the March 2009 lows) it is almost indescribably bad. It almost goes without saying — given how beaten down these stocks are… Read More

In the board rooms of Best Buy (NYSE: BBY), Barnes & Noble (NYSE :BKS), Bed, Bath & Beyond (Nasdaq: BBBY) and many other retailers, the same two concerns exist: Consumers aren’t spending.  Retail sales grew just 2.9% in the first six months of 2014, according to the National Retail Federation.  And whatever sales growth that can be had is often sucked up by Amazon.com (Nasdaq: AMZN), which is expected to boost revenue $15 billion this year and another $20 billion in 2015 to nearly $110 billion in sales.   #-ad_banner-#​It’s… Read More

In the board rooms of Best Buy (NYSE: BBY), Barnes & Noble (NYSE :BKS), Bed, Bath & Beyond (Nasdaq: BBBY) and many other retailers, the same two concerns exist: Consumers aren’t spending.  Retail sales grew just 2.9% in the first six months of 2014, according to the National Retail Federation.  And whatever sales growth that can be had is often sucked up by Amazon.com (Nasdaq: AMZN), which is expected to boost revenue $15 billion this year and another $20 billion in 2015 to nearly $110 billion in sales.   #-ad_banner-#​It’s only once you realize that shares of Amazon.com are off 20% this year, that you begin to understand that every corner of the retail sector is hurting. Many retailers now realize that they should have devoted more resources to their e-commerce portals. Bed, Bath & Beyond, for example, is just now taking its web presence seriously — and that came only after its shares were pummeled.  While some firms such as Walmart are spending hundreds of millions of dollars to internally boost their online sales platforms, others lack the money or skill to create a world-class website. Read More

This has been a bad month for Dan Hesse. The sharp plunge in Sprint (NYSE: S), which wiped out more than $10 billion in market value over the past month, cost him his job as the company’s CEO. And this embattled former executive isn’t alone.  #-ad_banner-#Dozens of other companies saw their shares plummet over the past month in the face of dismal quarterly results and other setbacks. You can expect to find more executive departures in many of the upcoming board meetings — especially at  firms where problems surfaced during Q2 and will likely heed the call for… Read More

This has been a bad month for Dan Hesse. The sharp plunge in Sprint (NYSE: S), which wiped out more than $10 billion in market value over the past month, cost him his job as the company’s CEO. And this embattled former executive isn’t alone.  #-ad_banner-#Dozens of other companies saw their shares plummet over the past month in the face of dismal quarterly results and other setbacks. You can expect to find more executive departures in many of the upcoming board meetings — especially at  firms where problems surfaced during Q2 and will likely heed the call for a major business overhaul. Yet, the outlook for some of the companies with falling stock prices doesn’t look so bleak. A select few possess the ingredients for a solid snapback in coming months, easing the pressure on the embattled management teams.  Here’s a look at three stocks that plunged at least 25% over the past month, but now appear poised to make up for lost ground before the year is out.  1.    Insmed (Nasdaq: INSM) This biotech stock had been building an impressive stock chart. It has set higher highs and higher lows for nearly a year as investors… Read More

It’s best to catch investors in a good mood. If companies deliver bad news when they are optimistic, then they will often shrug it off. Yet, when the collective investor mood sours, even the best news can be ignored by the crowd.  #-ad_banner-#That’s surely been the case… Read More

Although the major market averages remain within an arm’s reach of their all-time highs, many individual stocks have entered their own bear market in recent months. With few investors showing much buying interest right now, shares of these stocks have pierced their 52-week lows.  The key is to track these stocks because they could emerge as solid value plays. I’ve found four stocks that could fit the bill during this midsummer swoon.  Loews (NYSE: L)   52-week high/low: $49.43/$41.69  Recent price: $41.75 One of the most unheralded… Read More

Although the major market averages remain within an arm’s reach of their all-time highs, many individual stocks have entered their own bear market in recent months. With few investors showing much buying interest right now, shares of these stocks have pierced their 52-week lows.  The key is to track these stocks because they could emerge as solid value plays. I’ve found four stocks that could fit the bill during this midsummer swoon.  Loews (NYSE: L)   52-week high/low: $49.43/$41.69  Recent price: $41.75 One of the most unheralded stories of America’s recovery from the Great Recession of 2008 is the sharp improvement in the balance sheets of financial services firms. These firms have been rebuilding their capital base at a rapid rate, but still don’t get credit for their efforts.  Case in point: Loews, a diversified insurer that has been generating robust profits and parking those earnings on the balance sheet. Loews’ book value is on pace to nearly double this year from where it was at the end of 2008.  Loews’ Book Value Keeps Rising   2008 2009 2010 2011… Read More