Archive for November, 2009
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Thanks Vets
Eddy Elfenbein, November 11th, 2009 at 9:42 am -
NICK Announces Stock Split
Eddy Elfenbein, November 10th, 2009 at 1:42 pmI’m not sure why this is needed, but Nicholas Financial (NICK) has just announced a 10% stock dividend which will be paid on December 7 for shareholders of record of November 20. Think of it as an 11-for-10 stock split.
In other Buy List dividend news, Baxter International (BAX) has raised its quarterly dividend to 29 cents a share from 26 cents. Don’t brush off these regular dividend increases, it’s often a sign of a strong company. -
The Buy List Hits New High
Eddy Elfenbein, November 9th, 2009 at 5:45 pmThe Buy List jumped 2.25% today. We’re now up 38.66% for the year, which is a new high for the year (not including dividends). The S&P 500 is 21.02% for the year.
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A Fed Rate Increase By June?
Eddy Elfenbein, November 9th, 2009 at 11:17 amThe futures market thinks so:
U.S. Federal Reserve Chairman Ben S. Bernanke may start to increase borrowing costs in June, according to Fed funds futures prices compiled by Bloomberg. Traders assign a 54 percent chance of an increase to at least 0.5 percent at the end of the Federal Open Market Committee’s meeting on June 23, when the American economy is forecast to be in its fourth straight quarter of expansion, according to estimates compiled by Bloomberg.
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Barron’s Highlights Altria
Eddy Elfenbein, November 9th, 2009 at 10:26 amTobacco companies are hated by the public but the stocks are very tempting financially. Over the weekend, Barron’s looked at Altria (MO):
At around 18.50, Altria has one of the lowest price/earnings ratios in the global cigarette industry. It also has one of the highest dividend yields: 7.3%. The stock trades for 10.6 times projected 2009 profits of $1.77 a share and 10 times estimated 2010 earnings of $1.87. Even Reynolds American (ticker: RAI), with weaker brands, sports a slightly higher P/E on a 2010 basis.
At its current price, Altria’s stock appears to have little downside and significant appreciation potential. One of the company’s prime assets is a 27% stake in international brewer SABMiller (SAB.U.K.), which is worth $11.5 billion, or 30% of Altria’s current market value.
Altria has lost some cachet in the investment community since the 2008 separation of its international tobacco operations. The faster-growing spinoff, Philip Morris International (PM), trades around 49, or for 15 times projected 2009 profits, a sizable premium to Altria.Those are very solid numbers. I’d add that the company has consistently met or beaten earnings for the past few quarters, so it may be going for even less than 10 times next year’s earnings.
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Herb Brooks’ Pre-Game Speech from Miracle
Eddy Elfenbein, November 7th, 2009 at 3:32 pm
Kurt Russell also did a version. -
Single Letter Ticker Symbols
Eddy Elfenbein, November 6th, 2009 at 6:17 pmCongratulations to Hyatt Hotels (H) on their recent IPO. They had the rare honor of getting a single-letter ticker symbol. There are only six left — I, J P, U, W and Z.
For possible future reference, the symbol CWS is also open. -
Bernstein’s Target for AMZN = $160
Eddy Elfenbein, November 6th, 2009 at 3:55 pmReally? Is that 160 U.S. dollars, or is it pesos?
I’ve been totally and completely wrong on Amazon (AMZN) but I won’t give in so easily. I do not get it’s current price of $125 which is 50 times next year’s earnings. The analyst at Bernstein sees it going to $160. -
Montana Farmers Fear a Buffett ‘Dictatorship’
Eddy Elfenbein, November 6th, 2009 at 3:26 pmThe WSJ reports on the fear of an Omahalebensraum:
Few states have more at stake in Warren Buffett’s acquisition of Burlington Northern Santa Fe than Montana. The company owns 90% of the state’s tracks, which are the primarily means for Montana farmers and coal miners to ship their goods across the country.
To get a sense of how the deal is being received in the Big Sky state, Deal Journal reached out to Alan Merrill, president Montana Farmers Union, who can watch Burlington Northern’s grain cars rumble along outside his Great Falls, Mont., office six or seven times a day.
For years, Merrill says, the state’s 11,000 farmers have complained about the monopoly that Burlington Northern holds over rail shipping in Montana. He hopes Buffett, who lives in the middle of corn-growing country in Omaha, Neb., will be sympathetic to farmers’ concerns about what they consider to be high rates on their barley and wheat shipments. -
Those Evil Drug Companies
Eddy Elfenbein, November 6th, 2009 at 12:05 pmBusiness Week reports:
On Oct. 8, Senator Al Franken (D-Minn.) introduced a bill proposing that drugmakers no longer be allowed to deduct marketing expenses from their taxes, as companies generally can. “This legislation will remove these benefits so pharmaceutical companies can focus on developing new drugs, not excessive marketing schemes,” Franken’s office said in a statement.
Developing new drugs is a great idea! Of course, that will requite money. Now where would that come from?
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