The companies we’ve included are Pfizer Inc. (NYSE: PFE), Merck & Co Inc. (NYSE: MRK), Bristol-Myers Squibb Co. (NYSE: BMY), Teva Pharmaceuticals Industries Ltd. (NASDAQ: TEVA), Amgen Inc. (NASDAQ: AMGN), and GlaxoSmithKline plc (NYSE: GSK).

Pfizer Inc. (NYSE: PFE) trades around $22.00 and the 52-week range is $16.63 to $22.00. With a $168 billion market cap, this one trades at about 15-times expected earnings and 9.5-times expected 2012 earnings. Thomson Reuters has a mean price target objective of $23.76, indicating implied upside of 8%.

Merck & Co Inc. (NYSE: MRK) trades near $38 and the 52-week range is $29.47-$39.00. With a $117 billion market cap, Merck trades at about 28-times expected earnings and 10-times expected 2012 earnings. The mean price target objective is $39.85, indicating a potential upside of 4.9%.

Bristol-Myers Squibb Co. (NYSE: BMY) trades near $34 and the 52-week range is $24.97-$35.44. With a market cap of about $58 billion, this one trades at about 17-times expected earnings and 17-times forward earnings. The mean price target objective is $32.91, indicating that shares are fully valued and upside potential has gone missing.

Teva Pharmaceuticals Industries Ltd. (NASDAQ: TEVA) trades at about $44 and the 52-week range is $35.00-$57.08. With a market cap of $39 billion, Teva trades at about 13-times earnings and 8-times forward earnings. The mean price target objective is $53.15, indicating an implied upside of nearly 21%. The company has also seen gains since disclosing a new CEO.

Amgen Inc. (NASDAQ: AMGN) trades at about $66 and the 52-week range is $47.66-$65.70. With a market cap of $58 billion, this one trades at about 16-times earnings and 11-times forward earnings. The mean price target objective is $65.45, and, like Bristol-Myers, Amgen is fully valued and there is no implied gain at the current price.

GlaxoSmithKline plc (NYSE: GSK) trades at about $44 and the 52-week range is $36.28-$46.50. With a market cap of $221 billion, this one trades at about 44-times earnings and 13-times forward earnings. The mean price target objective is $49.58, indicating an implied upside of 12.7%.

Only Teva and GlaxoSmithKline have double-digit upside potential percentage gains. Of the two, Teva’s upside potential is greater, largely because it just lost a patent dispute (which pushed the share price down) and gained a new CEO, an industry veteran from Bristol-Myers (which pushed the share price back up). The downside on the company is that it is trading down about -18% over the past 12 months, the only one of these six companies to show a loss for the period.

Glaxo is preparing a regulatory filing in the US with a replacement for the company’s Adair asthma drug which loses patent protection next year. Late-stage trials have been promising, and the stock could get a nice boost if the FDA grants approval. Glaxo also received three new drug approvals from the FDA in 2011,

Paul Ausick

American Express Co. (NYSE: AXP) was over 151.6 million shares, SAME AS last quarter.
Bank of New York Mellon Corp. (NYSE: BK) was 1,793,915 shares, SAME AS last quarter.
CVS Caremark Corporation (NYSE: CVS) is a NEW POSITION of 5,661,000 shares worth $190.1 million.
Comdisco Holdings (NASDAQ: CDCO) was roughly 1.5 million shares, SAME AS BEFORE.
Coca Cola Co. (NYSE: KO) was right at 200 million shares, SAME AS BEFORE.
ConocoPhillips (NYSE: COP) is roughly 29.1 million shares, roughly the SAME AS BEFORE but it is still lower than previous quarters.
Costco Wholesale (NASDAQ: COST) 4,333,363 Shares, SAME AS last quarter after having lowered it before.
DirecTV (NASDAQ: DTV) is a NEW POSITION listed as 4,249,400 shares worth $ 179.6 million.
Dollar General Corporation (NYSE: DG) is a LARGER POSITION at 4.497 million shares worth some $169.8 million versus last quarter’s new position of 1,497,800 shares.  This one of our Top Stocks for the Next Decade.
Exxon Mobil Corp. (NYSE: XOM) was 421,800 shares; SAME AS before but lower than the 1.276 million shares originally.
Gannett Co. (NYSE: GCI) was 1.74 million, SAME AS BEFORE but decreased in prior quarters.
General Dynamics Corporation (NYSE: GD) is a NEW POSITION of 3.064 million shares worth $174.3 million.
General Electric Corp. (NYSE: GE) is 7.777 million shares; SAME AS before.  Please note that this does not include the huge preferred shares from late in 2008 that are likely to be called from Buffett later this year.
GlaxoSmithKline (NYSE: GSK) 1.51 million shares, SAME AS last quarter.
Ingersoll-Rand (NYSE: IR) was 636,600; SAME AS last quarter but still way down from prior reports.
Intel Corporation (NASDAQ: INTC) is a NEW POSITION of 9.333 million shares worth $199.6 million. 
International Business Machines Corporation (NYSE: IBM)  is a NEW POSITION and we found out this morning that Buffett’s stake is nearly 64 million shares worth well over $10 billion with an average cost of about $170 per share.
Johnson & Johnson (NYSE: JNJ) was just over 37.4 million, a LOWER POSITION versus the 42.6 million shares the June quarter and way under the peak of 62 million shares at one point in prior quarters.
Kraft Foods (NYSE: KFT) was a LOWER POSITION at 89.7+ million versus 99,467,624 shares at the June quarter and way down from before selling during the Cadbury purchase.

Despite the revelation made this morning and despite the new positions in IBM and Intel, there is still data not represented in Berkshire Hathaway’s full holdings: Confidential information has been omitted from the Form 13F and filed separately with the Commission.  It looks as though Warren Buffett was again given permission to delay or omit some of the new holdings.

PAGE TWO…BUFFETT HOLDINGS ‘L to Z’

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JON C. OGG

Aixtron SE (NASDAQ: AIXG) Raised to Equalweight at Morgan Stanley.
Alcatel-Lucent SA (NYSE: ALU) Cut to Neutral at BofA/ML.
AstraZeneca PLC (NYSE: AZN) Cut to Underweight at Morgan Stanley.
Corrections Corporation of America (NYSE:CXW) named as Value stock of the day at Zacks.
Emerson Electric Co. (NYSE: EMR) Raised to Buy at Citigroup.
GlaxoSmithKline plc (NYSE: GSK) Raised to Equal-Weight at Morgan Stanley.
Honeywell International (NYSE: HON) Raised to Buy at Citigroup.
Humana Inc. (NYSE: HUM) Reiterated Buy and raised target to $95 at Argus.
Kirby Corporation (NYSE: KEX) Started as Outperform at Credit Suisse.
Microchip Technology (NASDAQ: MCHP) named as Bear of the Day at Zacks.
OmniVision Technologies Inc. (NASDAQ: OVTI) Cut to Perform at Oppenheimer.
Plains All American Pipeline, L.P. (NYSE: PAA) Raised to Outperform at Wells Fargo.
Rackspace Hosting, Inc. (NYSE: RAX) Raised to Buy at Kaufman Bros.
St. Jude Medical (NYSE: STJ) Raised to Outperform at Credit Suisse.
Teva Pharmaceutical Industries (NASDAQ: TEVA) Reinstated as Outperform at Credit Suisse.
Trimble Navigation Limited (NASDAQ: TRMB) Started as Buy at Janney.
Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) Cut to Neutral at R. W. Baird.
Whole Foods Market Inc. (NYSE: WFM) named Bull of the Day at Zacks.

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American Express Co. (NYSE: AXP) was over 151.6 million shares, SAME AS last quarter.
Bank of New York Mellon Corp. (NYSE: BK) was 1,793,915 shares, SAME AS last quarter.
Coca Cola Co. (NYSE: KO) was right at 200 million shares, SAME AS BEFORE.
Comdisco Holdings (NASDAQ: CDCO) was roughly 1.5 million shares, SAME AS BEFORE.
ConocoPhillips (NYSE: COP) is roughly 29.1 million shares, SAME AS BEFORE but it is still lower than previous quarters.
Costco Wholesale (NASDAQ: COST) 4,333,363 Shares, SAME AS last quarter after having lowered it before.
Dollar General Corporation (NYSE: DG) is a NEW POSITION of 1,497,800 shares, which is also one of our own Top Stocks for the Next Decade.
Exxon Mobil Corp. (NYSE: XOM) was 421,800 shares; SAME AS before but lower than the 1.276 million shares originally.
Gannett Co. (NYSE: GCI) was 1.74 million, SAME AS BEFORE but decreased in prior quarters.
General Electric Corp. (NYSE: GE) is 7.777 million shares; SAME AS before.  Please note that this does not include the huge preferred shares from late in 2008 that are likely to be called from Buffett later this year.
GlaxoSmithKline (NYSE: GSK) 1.51 million shares, SAME AS last quarter.
Ingersoll-Rand (NYSE: IR) was 636,600; SAME AS last quarter but still way down from prior reports.
Johnson & Johnson (NYSE: JNJ) was just over 42.6 million shares; SAME AS last quarter but well under the peak of 62 million shares at one point in prior quarters.
Kraft Foods (NYSE: KFT) was 99,467,624 shares; DOWN FROM the 105.21 million last quarter but lower than before selling during the Cadbury purchase.
Lubrizol Corporation (NYSE: LZ) was not listed as a formal holding, but Berkshire Hathaway is still in the acquisition process.

What is interesting is that Berkshire Hathaway STILL does not full reflect its full holdings: Confidential information has been omitted from the Form 13F and filed separately with the Commission.  It looks as though Warren Buffett was again given permission to delay or omit some of the new holdings.

PAGE TWO…BUFFETT HOLDINGS ‘M to Z’

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JON C. OGG

The big screen today is defensive stocks with the highest dividends.  Our screen came to a near-tie from Altria Group Inc. (NYSE: MO), Reynolds American Inc. (NYSE: RAI) and Lorillard, Inc. (NYSE: LO).  We also found Kimberly-Clark Corporation (NYSE: KMB), Eli Lilly & Co. (NYSE: LLY), HJ Heinz Co. (NYSE: HNZ), ConAgra Foods, Inc. (NYSE: CAG), Molson Coors Brewing Company (NYSE: TAP), Dr Pepper Snapple (NYSE: DPS), and American Water Works Company, Inc. (NYSE: AWK).

CIGARETTES:  The cigarette space yields three industry leading players, each with a payout exceeding 5%.  Reynolds American Inc. (NYSE: RAI) leads with a dividend of 5.61%, followed by Altria Group Inc. (NYSE: MO) paying 5.57% and Lorillard, Inc. (NYSE: LO) paying 5.23%. Among the three companies, dividend payout ratios range from LO’s low of 65.0% to RAI’s high of 80.88%. Forward P/E’s range from LO’s low of 11.76 to RAI’s high of 13.31. RAI’s shares currently trade around 38, with a 52-week range of $25.53 to $39.87.  With shares trading near $27.50, MO’s 52-week range is $19.53 to $28.13.  LO’s shares currently trade around $102, LO’s 52-week range is $70.87 to $116.90.  Fitch recently gave a report that it expects that tobacco players can easily mitigate legal pressures and regulatory pressures ahead.  Maybe some investors feel guilty for owning stocks that make a living by killing their customers, but those dividend checks are big enough to clean up a conscience.

CONSUMER PRODUCTS: Kimberly-Clark Corporation (NYSE: KMB) is the winner here in dividends for the consumer products sector with a dividend of almost 4.2%. It leads consumer product peers by far and it was one of our own stocks to own for the next decade.  That has not changed.  At $65.65, its has a 52-week range of $59.62 to $68.49, and Thomson Reuters sees a consensus price target of $68.58.  Some have been concerned that rising input costs and in-store promotion costs are too large of a challenge.  We think that Kimberly-Clark (and most peers) can actually survive and thrive either way.

BIG PHARMA: With a dividend of 5.2%, Eli Lilly & Co. (NYSE: LLY) leads major drug manufacturers.  Eli Lilly has a dividend payout ratio of 46.38% and a forward P/E of 10.05.  With shares trading near $38, LLY’s 52-week range is $32.81 to $39.40.  Five other significant drug companies also pay attractive dividends in excess of 4%, including AstraZeneca PLC (NYSE: AZN), GlaxoSmithKline plc (NYSE: GSK), Sanofi-Aventis (NYSE: SNY), Bristol-Myers Squibb Company (NYSE: BMY) and Merck & Co. Inc. (NYSE: MRK).  Dividends in this group range upward from Merck’s 4.25% to AstraZeneca’s 4.94%.

FOOD – MAJOR DIVERSIFIED: HJ Heinz Co. (NYSE: HNZ) leads its industry with a dividend of 3.6%. The company’s forward P/E of 14.56.  With shares trading near $53.50, Heinz’s 52-week range is $42.88 to $55.00.  The consensus price target is $56.81 per Thomson Reuters, so most of the return here may be left in the form of dividends.  Goldman Sachs may have cut its rating to “SELL” recently but it still offers what looks to be the top dividend.

FOOD – PROCESSED & PACKAGED GOODS: ConAgra Foods, Inc. (NYSE: CAG) leads this segment of the food industry with a 3.8% dividend. ConAgra has a dividend payout ratio of 55.20% and a forward P/E of 12.88.  With shares currently trading around 24.50, CAG’s 52-week range is $21.02 to $25.82.  ConAgra is one which does not always feel as defensive as some food stocks, but that dividend is hard to beat.

BEVERAGES – BREWERS: Molson Coors Brewing Company (NYSE: TAP) leads brewers with almost a 2.9% dividend. The company’s payout ratio is 26.26%.  Its forward P/E is 11.26. With shares trading near $44.50, TAP’s 52-week range is $41.88 to $51.11.  The beer sector has not acted quite as defensive as other defensive sectors.  Trends of micro-brews and smaller brews have been troublesome, as has input price trends.  Still, we recently named the now-Canadian Coors owner as a value stock likely to benefit from the summer trends.  In this heat wave, how many people can drink big red wines?

BEVERAGES – SOFT DRINKS: With a dividend of 3.2%, Dr Pepper Snapple (NYSE: DPS) leads this segment of the beverage industry.  Dr Pepper’s dividend payout ratio is 41.30% and its forward P/E is 13.34.  With shares trading around $40, DPS’s 52-week range is $33.60 to $42.44.  Dr. Pepper may still be more growth-oriented than a Coke or Pepsi and it has raised its dividends.  It is now paying a higher payout than both Coke and Pepsi.  Shares are also close to the analyst target of $42.92.

WATER UTILITIES: American Water Works Company, Inc. (NYSE: AWK) leads the municipal water space with a dividend of about 3.1%.  AWK’s payout ratio is 54.64%. Its forward P/E is 15.54. With shares trading near $28.50, the stock’s 52-week range is $19.92 to $30.70.  This one is as defensive as you can get.  You don’t have to an iPhone to live but try living without your water company.  The company’s dividends have risen and are likely to keep rising though time, it has nothing short of monopolies in the local markets which it operates, and its stock has risen and risen until recently.  There is a reason that this was one of our stocks to own for the next decade.

Call this what you want… value investing, dividend investing, or income investing.  Many of these stocks are held by investors for years and years.

JON C. OGG

American Express Co. (NYSE: AXP) over 151.6 million shares, SAME AS last quarter.
Bank of New York Mellon Corp. (NYSE: BK) was the same 1,793,915 shares as last quarter. 
Coca Cola Co. (NYSE: KO) was still listed as right at 200 million shares, SAME AS BEFORE.
Comdisco Holdings (NASDAQ: CDCO) was roughly 1.5 million shares, SAME AS BEFORE.
ConocoPhillips (NYSE: COP) is roughly 29.1 million shares, slightly lower.
Costco Wholesale (NASDAQ: COST) 4,333,363 Shares, SAME AS last quarter after having lowered it before.
Exxon Mobil Corp. (NYSE: XOM) is static at 421,800 shares; SAME AS before but lowered from 1.276 million shares originally.
Gannett Co. (NYSE: GCI) 1.74 million, SAME AS BEFORE but decreased from earlier.
General Electric Corp. (NYSE: GE) 7.777 million shares; SAME AS before but this does not include the huge preferred shares from late in 2008 that are likely to be called from Buffett later this year.
GlaxoSmithKline (NYSE: GSK) 1.51 million shares, SAME AS last quarter.
Goldman Sachs Group Inc. (NYSE: GS) is not listed, but Berkshire Hathaway still has all of those warrants from its 10% preferred share investment from the recession.
Ingersoll-Rand (NYSE: IR) was kept at 636,600; SAME as last quarter but way down from prior reports.
Johnson & Johnson (NYSE: JNJ) was static at just over 42.6 million shares; SAME as last quarter but well under the peak of 62 million before.
Kraft Foods (NYSE: KFT) was static at 105.21 million, SAME AS BEFORE but lower than before selling during the Cadbury purchase.
Lubrizol Corporation (NYSE: LZ) was not listed as a formal holding, but Berkshire Hathaway is trying to acquire this company despite the David Sokol issues.

What is interesting is that Berkshire Hathaway does not full reflect its full holdings.  Buffett is again keeping his cards close to the vest for what he thinks will be copy-cat share buying (most likely on Combs’ new positions).  This filing shows that “only” about $53.6 billion in equities are reflected here, but the most recent earnings report showed an equity value” of about $61.8 billion. It looks as though Warren Buffett was given permission to delay some of the new holdings.

PAGE TWO…BUFFETT HOLDINGS ‘M to Z’

You can join our free daily email distribution list to hear more news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, key analyst calls, and more.

JON C. OGG

Eli Lilly & Co. (NYSE: LLY) is down 1.6% around $35.45 after earnings today and its 52-week trading range is $32.02 to $38.08.  So the shares are almost exactly wedged in the middle of its 52-week trading range.  Now sees a $4.15 to $4.30, a drop of 9% to 12% in non-GAAP terms.  More importantly, Lilly said that it sees cash flows being ample to fund capital expenditures of $800 to $900 million.  It also said that cash flow is enough to fund business development and for the company’s dividend.  We have now seen two years of $0.49 per quarter and the current dividend yield is roughly 5.5%.

Pfizer Inc. (NYSE: PFE) is down 1% at $20.32 today and its 52-week range is $14.00 to $20.75. Pfizer pays a 3.9% dividend yield currently.  Merck & Co. Inc. (NYSE: MRK) is down 1.5% at $34.00 against a 52-week range of $30.70 to $37.68 and it currently pays a 4.4% dividend yield.

For those willing to take on the currency risks and variable dividend risks of ADRs, there are also Astrazeneca PLC (NYSE: AZN) and GlaxoSmithKline PLC (NYSE: GSK) which were in our top ADRs dividend review last week.  Those are closer to 5% payouts. 

Investors have had to learn to cope with more problems than positives in the drug sector.  Growth is virtually gone and many face generic competition in the coming years on their key blockbuster drugs.  It is also possible that any new health care concessions after the next election will have to involve even more ‘sharing’ from the drug companies.  The good news is that there are still high dividends to boot and these annual payouts look very manageable for the companies even without real earnings growth.

JON C. OGG

Astrazeneca PLC (NYSE: AZN) pays twice a year and we had to split the past two dividends as a result.  At $49.02, the drug giant’s implied yield is close to 5.2% and these ADRs have traded in a range of $40.30 to $53.53 in the last 52-weeks.

GlaxoSmithKline PLC (NYSE: GSK) is one that has to be interpolated and applied to last year and expectations, but at $40.80 with a 52-week trading range of $32.15 to $42.10 per ADR, this drug giant has a yield that would be close to 5.1%.

Nokia Corporation (NYSE: NOK) pays only an annual yield and it has proposed a 0.40 euro per share dividend for its annual meeting next month in May.  This gives the currency risk even more room for error, but if we just keep it static then the payout would come to close to 6.4% since its $8.66 ADR price is so low against a 52-week range of $7.73 to $15.47. Maybe this is the only good thing happening at Nokia.

Telefonos de Mexico SA de CV (NYSE: TMX) at $18.38 pays close to a 6% yield and ADRs have traded in a range of $13.00 to $18.94 in the last 52-weeks.  The Mexican telecom operator is one of the highest yields in Latin America.

Again, ADRs pay dividends based upon the local accounting standards.  Not all are quarterly and the currency fluctuations and the timing can vary greatly here.  There is no free lunch, but you already know that.  As always, know what you are investing in.

JON C. OGG

We gave a full cheat sheet on the outlook, expectations, and the reality last night at Biohealthinvestor.com so we are going to skip all of that and just jump right into the possibilities and realities of the possible M&A situation.

First and foremost, the only likely buyer that would surface immediately would be GlaxoSmithKline itself.  That might not be true down the road and perhaps another Glaxo partner might consider this.  The problem is that integrating a drug company and biotech-genomics player is already a tough call.  The two companies split the benefits now for Benlysta.

Another issue is that the $35,000 price tag is within our expected range but is not entirely a slam dunk that all coverage will get full reimbursements in all cases.  That is not much of a concern of our own, but it would be to a buyer.

Minyanville highlighted the possibilities of a buyout this morning but we are not as hopeful.  In short, our stance has not changed since the buyout rumors resurfaced in late-2010.  This is not fair to the nth degree because predicting an FDA outcome is too difficult even for a big drug company that has what should be a shoe-in approval.  Still, can you imagine being a GlaxoSmithKline board member and having to answer the question “If you knew this was such a great deal with an assured outcome, why did you not just acquire the company outright when shares were well under $5.00 less than two years ago?”

In short, Glaxo’s team looks like a hero already when it comes to Human Genome.  They got half for what now may be a mere song.  Chasing the other half today may come with too many risks. Making a more calculated decision in the months or years ahead may be more realistic.  Our take is that investors should be evaluating Human Genome on its merits today and its other pipeline rather than as a buyout candidate.

After a 13% gain today to $29.08, HGSI shares are worth about $5.5 billion and the 52-week range is $20.56 to $34.49.  Analysts from Thomson Reuters had a consensus target of $34.00 before the news, but that figure will be higher after the higher price and estimate hikes that we have seen so far.

It is a safer bet that trading will be extra-volatile over the next couple of days.  We’ll look for the dust to settle next week before evaluating these possibilities further.

JON C. OGG

American Express Co. (NYSE: AXP) over 151.6 million shares, SAME AS last quarter.
Bank of New York Mellon Corp. (NYSE: BK) was previously a new position a quarter ago but this quarter was listed as 1,793,915 shares and is SLIGHTLY SMALLER than the 1,992,759 shares at the last report.
Coca Cola Co. (NYSE: KO) right at 200 million shares, SAME AS BEFORE.
Comdisco Holdings (NASDAQ: CDCO) roughly 1.5 million shares, SAME AS BEFORE.
ConocoPhillips (NYSE: COP) is roughly 29.1 million shares, SAME AS LAST QUARTER but lower than the past.
Costco Wholesale (NASDAQ: COST) 4,333,363 Shares, SAME AS last quarter after having lowered it before.
Exxon Mobil Corp. (NYSE: XOM) is still just 421,800 shares; SAME AS before but lowered from 1.276 million shares originally.
Gannett Co. (NYSE: GCI) 1.74 million, SAME AS BEFORE after having decreased from earlier.
General Electric Corp. (NYSE: GE) 7.777 million shares; SAME AS before but does not include the huge preferred shares from late in 2008.
GlaxoSmithKline (NYSE: GSK) 1.51 million shares, SAME AS before.
Ingersoll-Rand (NYSE: IR) was kept at 636,600 shares as the same as last quarter but this is way down from over 7.78 million more a year ago.

Many Changes…

Bank of America Corp. (NYSE: BAC) used to be 5 million shares, but Buffett SOLD ALL BOFA SHARES.
Becton Dickinson & Co. (NYSE: BDX) used to be 1.889 million shares, but BUFFETT SOLD ALL B&D SHARES.
Comcast Corporation (NASDAQ: CMCSA) was already a lower position at 186,897 shares down from 12 million before, BUT BUFFETT SOLD ALL REMAINING SHARES.
Fiserv, Inc. (NASDAQ: FISV) had already been lowered to 3.91+ million shares, but BUFFETT SOLD ALL FISERV SHARES.

BUFFETT HOLDINGS J to R

BUFFETT HOLDINGS S to Z

You can join our free daily email distribution list to hear more news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, key analyst calls, and more.

JON C. OGG