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The More Focused, and More Opaque, Buffett & Berkshire Hathaway (BRK-A, BRK-B, BNI, UNP, NSC, GS, GE, TIF, HOG, WMT, COP, XOM, WFC, RSG, DOW, ETN, WBC, MCO, WLP, UNH, GSK, SNY, GCI, WPO)

This was an important week for investment guru and billionaire watchers to see which gurus were holding which stocks. The full public equity holdings of Warren Buffett via Berkshire Hathaway Inc. (NYSE: BRK-A) were particularly of note, particularly with those B shares under “BRK-B” soon to split and giving a chance for even the less astute ranks of Joe Public to own a piece of the Berkshire dream. Obviously the huge change is via the Burlington Northern Santa Fe Corp. (NYSE: BNI) buyout. As part of this deal, Buffett is exiting Union Pacific (NYSE: UNP) and exiting Norfolk Southern (NYSE: NSC) stakes of about $600 million and $100 million, respectively, to avoid duplication and internal competition. The rail transport play now accounts for about one-quarter of the total Berkshire Hathaway entity upon closing. But the less obvious position in that Warren Buffett in 2009 has made it clear that there will be a simpler and probably less “stock-hound” version of Berkshire Hathaway ahead.

Buffett has gone higher up the food chain and is likely to be a creditor now inside or to large institutions. We have seen this during the crisis. Buffett negotiated a better deal for Goldman Sachs Group (NYSE: GS) than the US Government was able to get. Buffett’s preferred stock in Goldman Sachs has a dividend of 10% and is callable at any time at a 10% premium; but Buffett also got warrants to purchase $5 billion of common stock with a strike price of $115.00 per share, exercisable for a five-year term (4 years now), and Buffett would effectively get to pocket $61 per share if he exercised those all today at the market (and with a $2.6 billion warrant profit alone).

The General Electric Co. (NYSE: GE) stake was listed only as 7.77 million shares of common stock (about $125 million now), the same as it has been for quarters. Yet last year Buffett came to the rescue with a $3 billion of perpetual preferred stock in a private offering with a dividend of 10% and warrants to purchase $3 billion of common stock. The preferred is callable after 3-years (2 years now) at a 10% premium; the warrants have a strike price of $22.25 and are exercisable for a five-year term (4 years now).
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Posted on: November 19, 2009 – 8:59 am in Activist Investor, Bonds, Buffett, Conglomerates, Dividend, Editor's Picks, Infrastructure, Large Cap Stocks, Mergers and Buy Outs, Oil & Gas, Private Equity, Transports, Value Investing, BNI, BRK-A, BRK-B, COP, DOW, ETN, GCI, GE, GS, GSK, HOG, MCO, NSC, RSG, SNY, TIF, UNH, UNP, WBC, WFC, WLP, WMT, WPO, XOM

The 100 Hardest Working Brands In The World

There are a number of ways to rank brand values. One of the most important is the level at which a brand contributes to the market value of a public company.

24/7 Wall St. asked Corebrand, the brand research and consulting firm, to look at the top 100 brands based their contribution to market capitalizaton. Using this method, the hardest working brand was Hershey (NYSE:HSY), followed by Coca-Cola (NYSE:KO) and Harley-Davidson (NYSE:HOG)

Corebrand described the process briefly to 24/7 Wall. St.

24/7 Wall St.: Corebard often refers to the brands on this list as the”hardest working brands”. How did you come to that description?

Corebrand: There are a lot of people measuring and examining the “strongest brands” or the “most valuable brands”. Our opinion is that examining one without the other is somewhat meaningless. How “strong” a brand is nice to know but not very relevant unless you understand how that strength benefits business. Similarly, “value” is little more than a measure of corporate size unless you understand the drivers of that value and how to influence it. By examining the strength of the brand and it’s contribution to total market value, we can help companies and their leadership manage that strength and value over time.

24/7 Wall St.: Is there any advantage or disadvantage to having a brand value be a very large percentage of market cap in the present and as an indication of a company’s future performance?

Corebrand: The brand will need to be in balance with the rest of the company’s assets. A company should strive to have it’s brand strong enough to fend off competitors or changing market conditions but not so strong that it becomes overly dependent on the brand as a single driver of value. If a company can achieve and maintain its appropriate maximum strength without becoming over-dependent, it will see greater returns in bull markets and retain greater value in bear markets.

The list: Read More »

Posted on: October 20, 2009 – 5:06 pm in Research, Uncategorized, AAPL, AET, ALL, AM, AVP, AXP, BA, BBBY, BDK, BGP, BKS, BMY, CAJ, CAL, CL, COF, CPB, CVS, CVX, DAI, DD, DELL, DIS, DLM, EBAY, EK, EL, F, FDX, FUJIY, GE, GIS, GOOG, GPS, GR, GT, HD, HMC, HNZ, HOG, HRB, HRL, HSY, IBM, JCP, JNJ, K, KFT, KO, KSS, L, LIZ, LOW, LZB, MAR, MAT, MCD, MOT, MS, MSFT, NKE, NSANY, NYT, ODP, PBI, PBY, PEP, PG, PZZA, RAD, RL, RSH, S, SBUX, SCHW, SHW, SKS, SLE, SNE, SPLS, SUN, T, TBL, TGT, TIF, TM, TSN, TUP, TXN, UPS, VZ, WAG, WEN, WHR, WMT, XOM, XRX, YHOO

Top Analyst Upgrades (AFL, AMX, GLW, KOF, GIS, HIG, TIF, TJX)

These are this Tuesday morning’s top pre-market analyst upgrades, initiations, or relatively positive research calls from Wall Street:

AFLAC (NYSE: AFL) Raised to Neutral from Sell at UBS.
America Movil (NYSE: AMX) Raised to Buy at Citigroup.
Corning (NYSE: GLW) Raised to Buy at UBS.
Coca-Cola Femsa (NYSE: KOF) Raised to Buy at BofA/Merrill Lynch.
General Mills (NYSE: GIS) Raised to Overweight at Morgan Stanley
Hartford Financial (NYSE: HIG) Started as Buy at UBS.
Tiffany (NYSE: TIF) Started as Buy at Citigroup
TJX Companies (NYSE: TJX) Raised to Conviction Buy List (was Buy) at Goldman Sachs.

You can join our open email distribution list which goes out several times per week for reminders of the top day trader alerts, analyst upgrades and downgrades, IPO’s, key secondary offerings, guru investor data on Buffett and others, mergers, and more.

JON C. OGG
OCTOBER 6, 2009

Posted on: October 6, 2009 – 8:03 am in Analyst Calls, AFL, AMX, GIS, GLW, HIG, KOF, TIF, TJX

The World’s Millionaires Are Disappearing

The number of millionaire households in the world dropped from 11 million in 2007 to 9 million last year, a fall of almost 18%, according to The Boston Consulting Group. The figure was worse in North America where the drop was 22%.

The world’s wealthy are getting poorer and poorer at an alarming rate. Read More »

Posted on: September 15, 2009 – 5:51 am in Economy, TIF

The 100 Most Valuable Brands Of 2009?

Several consulting firms post annual figures for the world’s most valuable brands. The two best known are probably the Interbrand and BrandZ surveys. They are notably different, up until now at least. BrandZ includes a number of large brands from Asia. Interbrand does not.

24/7 Wall St. has put together a list of the most valuable brands of 2009 by looking at valuation calculations from a number of sources. Then a base valuation was taken from the 2008 Interbrand data to fix values for this year and changes from last.

Most methods take into account the future earnings of a brand for its parent company. This is fundamentally a guess particularly during a turbulent period in the global economy. Interbrand’s rule is that a brand most get at least a third of its revenue from outside its country-of-origin. That is arbitrary, particularly as it apply to brands in China.

24/7 Wall St. has made the assumption that the value of most brands have been hurt log-term by the deep recession. Forward earnings estimates for many of the firms on this list show that. Those brands which post value improvements show much more modest increases than they would be in a stable economy.

Looking at the Interbrand list from last year, it is fair to ask why firms like Nissan, Wal-Mart (WMT) and Red Bull are not present.

Because the brands on this list are taken from names on the Interbrand survey, we have not made a calculation about which companies may be new to their list in 2009 or which may drop off.

Public firms which are part of this ranking include (KO)(IBM)(MSFT)(GOOG)(GE)(NOK)(TM)(INTC)(MCD)(DIS)(HPQ)(AXP)(C)(HMC)(ORCL)(AAPL)(SNE)(PEP)(HBC)(NKE)(UPS)(FDX)(SAP)(DELL)(JPM)(GS)(KL)(EBAY)(SI)(F)(AIG)(AMZN)(CAT)(AVP)(RIMM)(GPS)(TIF)(BP)(SBUX)(JNJ)(MAR)(V)

The 100: Read More »

Posted on: September 13, 2009 – 9:01 pm in Research, AAPL, AIG, AMZN, AVP, AXP, BP, C, CAT, DELL, DIS, FDX, GE, GOOG, GPS, GS, HBC, HMC, IBM, INTC, JNJ, JPM, JPQ, KL, KO, MAR, MCD, MSFT, NKE, NOK, ORCL, RIMM, SAP, SBUX, SNE, TIF, TM, V

Top Analyst Upgrades and Downgrades (AMAG, AAPL, BX, JBLU, LAZ, RSH, SF, TLB, TIF, XRX, YHOO)

These are the top analyst upgrades, downgrades, and initiations seen from Wall Street early this Thursday morning:

AMAG Pharmaceuticals (NASDAQ: AMAG) Cut to Hold at Citigroup.
Apple Inc. (NASDAQ: AAPL) Raised to Outperform at JMP Securities.
The Blackstone Group (NYSE: BX) Raised to Conviction Buy at Goldman Sachs.
JetBlue (NASDAQ: JBLU) Cut to Neutral at JPMorgan.
Lazard (NYSE: LAZ) Raised to Conviction Buy at Goldman Sachs.
RadioShack (NYSE: RSH) Raised to Overweight at Morgan Stanley.
Stifel Financial (NYSE: SF) Cut to Neutral at Goldman Sachs.
Talbots (NYSE: TLB) was upgraded to Buy at Citi and raised to Neutral at Piper Jaffray.
Tiffany & Co. (NYSE: TIF) Raised to Outperform at Credit Suisse.
Xerox Corp. (NYSE: XRX) Raised to Buy at Brean Murray.
Yahoo! Inc. (NASDAQ: YHOO) Raised to Buy at BofA/Merrill Lynch.

JON C. OGG

Posted on: September 10, 2009 – 8:49 am in Analyst Calls, AAPL, AMAG, BX, JBLU, LAZ, RSH, SF, TIF, TLB, XRX, YHOO

As The Rich Squirm: A Take of Two Luxury Goods Brands (COH, TIF)

In a recession, the poor get poorer, and as Merrill Lynch study today suggests, the poor get poorer still, which has forced Coach Inc. (NYSE: COH) to make big changes that are helping to separate it from other luxury brands. This has implications for the likes of Tiffany & Co (NYSE: TIF).
Read More »

Posted on: June 24, 2009 – 11:39 am in Apparel, Economy, Luxury, Retail, COH, TIF

Buffett & Berkshire Primer Ahead of Annual Meeting (BRK-A, BRK-B, BNI, USG, TIF, HOG)

This weekend will mark the annual shareholder meeting for Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B). In the past, this has been considered the Financial Woodstock. But this is a much different year. Berkshire Hathaway shares sit down more than one-third from their highs. They had been down more than 50% at the major lows. The day’s close ahead of Berkshire’s last annual meeting was $133,600.00 and those sit around $93,000.00 around noon today.
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Posted on: May 1, 2009 – 12:38 pm in Annual Report, Buffett, Conglomerates, BNI, BRK-A, BRK-B, HOG, TIF, USG

Diamonds May Not Be Forever (RTP, KGC, TIF, BRK-A)

Rio Tinto plc (NYSE: RTP) owns a majority stake in a diamond mine in Canada’s Northwest Territories, and apparently has no intention of selling that stake to Kinross Gold Corp. (NYSE:KGC), as rumors had it. That seems a bit odd given Rio’s efforts to raise capital. It’s hard to see what Rio thinks it is holding on to.
Read More »

Posted on: March 31, 2009 – 9:26 am in Commodities, BRK-A, KGC, RTP, TIF

Buffett Defends, Regrets & Explains Many Positions (BRK-A, BRK-B, GE, JNJ, KO, TIF, AIB, IRE, WFC, COP)

Warren Buffett has been a much more reserved lately, although not as much as the recent performance might dictate. In the latest Berkshire Hathaway Inc. (NYSE: BRK-A) annual report, he sounded like a former boxing champion who staged a comeback and was beaten silly. This morning, Buffett spoke with CNBC’s Becky Quick and answered reader emails. What is interesting is that Buffett still defends most of the transactions he has made recently, even if he said he wished he did a few differently.
Read More »

Posted on: March 9, 2009 – 9:32 am in Buffett, Interview, AIB, BRK-A, BRK-B, COP, GE, IRE, JNJ, KO, TIF, WFC

Top 10 Analyst Upgrades & Downgrades (ALTR, XLNX, BMRN, FWLT, PALM, VRTX, EIX, MGM, POM, TIF)

These are the top 10 analyst calls we have seen this Wednesday morning with about two hours until the market opens:

Altera (ALTR) and Xilinx (XLNX) Raised to Overweight at Global Crown.
Biomarin Pharma (BMRN) Raised to Buy at Citigroup.
Foster Wheeler (FWLT) Raised to Buy at Jefferies.
Palm (PALM) Raised to Buy at Piper Jaffray.
Vertex Pharm (VRTX) Raised to Accumulate at ThinkEquity.
Edison (EIX) Cut to Market Perform at Wachovia.
MGM Mirage (MGM) Cut to Hold at KeyBanc.
Pepco Holdings (POM) was downgraded at both Barclays and at Wachovia.
Tiffany (TIF) target cut by over 60% to $21.00 at HSBC.

JON C. OGG
March 4, 2009

Posted on: March 4, 2009 – 7:53 am in Analyst Calls, ALTR, BMRN, EIX, FWLT, MGM, PALM, POM, TIF, VRTX, XLNX

Tiffany Lands Warren Buffett Debt (TIF, BRK-A)

Tiffany & Co. (NYSE: TIF) scored the big fish. The luxury jewelry retailer issued notes to Warren Buffett’s via units of Berkshire Hathaway, Inc. (NYSE: BRK-A).

Posted on: February 13, 2009 – 3:18 pm in Bonds, Buffett, Luxury, Retail, Secondary Offering, Berkshire Hathaway, BRK-A, TIF, Tiffany, Warren Buffett

Media Digest 1/15/2009 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, Steve Jobs will take a medical leave from Apple (AAPL) until June 30.

Reuters reports that Bank of America (BAC) is in discussions with the government to get billions of extra dollars.

Reuters reports that Western banks may regret rushing out of China.

Posted on: January 15, 2009 – 3:52 am in Press Digest, AAPL, BAC, C, DB, DELL, GCI, GS, IBM, JPM, LLY, MOT, MSFT, TIF, YHOO

The Retailers That Will Dominate Store Closings (SHLD)(M)(JWN)(TIF)(WMT)(BBY)(GPS)(M)

Several estimates from retail analysts predict the tens of thousands of retail outlets will close this year. Some put the number as high as 70,000 in the first half of 2009. Wall St. is bracing for a large number of bankruptcies in the sector, some of them public companies.

The largest fifteen or twenty retailers will chop locations but not go out of business. They have the sales and balance sheets to make it through the next two or three years, unless the recession turns to a depression. But, they won’t be able to keep the doors of all their operations open.

These are some of the nation’s largest retailers and estimates of what they will have to do to cut their total numbers of outlets as revenues fall.

Posted on: January 12, 2009 – 11:49 am in Retail, ANF, BBY, COH, GPS, JWN, M, SHLD, SIG, TIF, WMT, ZLC

Media Digest 11/27/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, markets in Asia and Europe ross about 2%

Reuters reports that the downturn in the Chinese economy deepened.

Reuters reports that BHP Billiton (BHP) was gloomy about its prospects and defended it bid for Rio Tinto (RTP)

Posted on: November 27, 2008 – 6:26 am in Press Digest, AIG, BAC, BHP, GM, MER, RTP, TIF, UAUA, WMG

Companies Hit Hardest By Credit Crisis (AAPL)(SIRI)(CC)(DIS)(WMT)(MCD)

Updated: 31 October 2008

Not all companies and industries will be hit equally hard by the consumer credit crisis. Operations such as Procter & Gamble (PG), McDonald’s (MCD), and Wal-Mart (WMT) may be safe. They either sell things people can’t do without or offer inexpensive goods and services that consumers can afford during a tough period. McDonald’s reported earnings today and its same-store sales were up in every region.The stock traded up on a day when the overall market was swamped by selling.

If the credit crisis gets substantially worse and only the most stable companies with the highest credit ratings have access to cash, some will not be able to maintain inventory. Other firms will be affected because their target consumers no longer have any discretionary income. The head of AutoNation (AN), the largest car dealer chain in the US, said that even his prime customers cannot get bank loans for new cars in many cases. "The banks are looking for every excuse possible to say no and they are saying no to good customers," Reuters quotes him as saying.

Neither set of companies has a bright future, but the ones who cannot finance their operations and inventories face almost immediate consequences

Posted on: October 2, 2008 – 8:01 pm in Economy, AAPL, AMZN, AN, AXP, CC, CHTR, DIS, GCI, GHS, MAR, MCD, MSFT, PG, SIRI, SNE, SWY, TIF, TM, TUES, UA, WMT, WYNN

Top Pre-Market Analyst Downgrades (ANF, AFFY, T, CPHD, DAI, RF, STJ, TASR, NCTY, TIF, WTSLA)

These are some of the top analyst Downgrades and negative calls we are seeing early this Friday morning:

Abercrombie & Fitch (ANF) Cut to Neutral at Banc of America.
Affymax (AFFY) Cut to Hold at Deutsche Bank.
AT&T (T) Cut to Neutral at JPMorgan.
Cepheid (CPHD) Cut to Underperform at Jefferies.
Daimler (DAI) Cut to Neutral at HSBC.
Regions Financial (RF) Cut to Neutral at Banc of America.
St. Jude Medical (STJ) Started as Neutral at Piper Jaffray.
TASER (TASR) Cut to Neutral at Merriman Curhan Ford.
The9 Ltd. (NCTY) Cut to Sell at Goldman Sachs.
Tiffany (TIF) Cut to Sell at Banc of America.
Wet Seal (WTSLA) Cut to Neutral at Piper Jaffray.

Jon C. Ogg
July 25, 2008

Posted on: July 25, 2008 – 6:30 am in Analyst Calls, AFFY, ANF, CPHD, DAI, NCTY, RF, STJ, T, TASR, TIF, WTSLA

Has Wal-Mart (WMT) Lied To Us?

Most large corporations amplify the distrust that the common man has for them by making misstatements from time to time. It is Wal-Mart’s (WMT) turn in the gauntlet of public opinion.

The world’s largest retailer seems to be making claims that shoppers who hit its stores will save $2,500 a year. It may have taken a room full of math professors to come to that number, and Wal-Mart thinks it is right.

"The figure represents the company’s calculation of its overall impact on an American household, not the average savings for Wal-Mart shoppers, and this has led an influential watchdog group to recommend that the campaign be fixed or halted," according to The New York Times. So, do families who shop at Wal-Mart save more than families who do not? Unclear.

It is less expensive to shop at Wal-Mart than at Tiffany (TIF) and the selection is better. But, it may not be less expensive than Target (TGT). The calculus may be a little misleading, but that really has not been proved.

Wal-Mart is implying that if everyone came to its stores they would be better off in terms of their household budgets. Most people who work for watch-dog groups can probably afford to shop at CostCo (COST), so how would they know?

Stuff at Wal-Mart is cheap whether people want to shop there or not. Trying to negate or confirm the dollar amount is like chasing your tail. Seekers of the truth should have better things to do.

Douglas A. McIntyre

Posted on: March 31, 2008 – 5:06 am in Retail, COST, TGT, TIF, WMT

Top 10 Pre-Market Analyst Calls (COF, CI, CS, GPS, THQI, TIF, UNH, WBD, YHOO, ZUMZ)

These are the top analyst upgrades and downgrades that 247WallSt.com is focusing on in pre-market trading this Tuesday morning:

Capital One (NYSE: COF) downgraded to Underperform at FBR.
CIGNA (NYSE: CI) raised to Outperform at Credit Suisse.
Credit Suisse Group (NYSE: CS) downgraded to Neutral at UBS.
Gap Inc. (NYSE: GPS) downgraded to Hold at Citigroup.
THQ Inc. (NASDAQ: THQI) raised to Buy at Citigroup.
Tiffany & Co. (NYSE: TIF) downgraded to Perform at Oppenheimer.
UnitedHealth (NYSE: UNH) downgraded to Neutral at Credit Suisse.
Wimm-Bill-Dann (NYSE: WBD) raised to Buy at Citigroup.
Yahoo! (NASDAQ: YHOO) raised to Buy at Citigroup.
Zumiez (NASDAQ: ZUMZ) downgraded to Perform at Oppenheimer.

Jon C. Ogg
March 25, 2008

Jon Ogg produces the Special Situation Investing Newsletter and can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: March 25, 2008 – 6:21 am in Analyst Calls, CI, COF, CS, GPS, THQI, TIF, UNH, WBD, YHOO, ZUMZ

Tiffany Rescues Luxury (TIF, NILE, ZLC, HWD)

This morning, Tiffany & Co. (NYSE: TIF) reported earnings. While results were down more than 15% from last year, its adjusted earnings of $1.27 EPS ($0.89 after loan and other charges) beat analysts estimates with First Call showing consensus was $1.21 on EPS. Revenues were in-line with expectations at $1.05 Billion.

The net earnings included a $0.22 charge that was made to Tahera Diamond Corp., which has sough creditor protection earlier this year. It also included $0.09 charges for watch discontinuations. One change it is making is its LIFO accounting (last in first out) incost recognition and will use an average cost accounting method.

Its total retail sales were up 4% year over year, and same store sales were down at -1%. Tiffany is maintaining a cautious US-stance for 2008 but noted robust growth internationally. Its 2008 forecast is $2.75 to $2.85, which was above $2.49 or $2.50 consensus estimates. It also put sales up 10% to approximately $3.23 Billion, and estimates were $3.18 Billion.

Tiffany earnings on a net-net basis were great for the current environment. The luxury jeweler wouldn’t have gotten such a great market reward like this morning if this was a year ago. But right now coming close to estimates is good enough. And beating estimates is even better. Shares are up about 14% to $44.00 shortly after the open.

This is also helping some other jewelry players who have seen hard times. Shares of Zale Corp. (NYSE: ZLC) are up 2.5% to $21.81, and its 52-week trading range is $12.48 to $29.22. Blue Nile Inc. (NASDAQ: NILE) is the real winner here with a 10% pop to $51.70, and its 52-week trading range is $38.35 to $106.16. Harry Winston Diamond Corp. (NYSE: HWD) is up less than 1% at $23.65 this morning, and its 52-week trading range is $21.78 to $45.18.

Jon C. Ogg
March 24, 2008

Posted on: March 24, 2008 – 8:58 am in Earnings, Luxury, HWD, NILE, TIF, ZLC

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