It was announced Thursday that IMS Health was to be stolen from its shareholders for $4 billion or about $22 share; a private equity firm will buy them out. IMS Health should have free cash flows this year over $340 million (the actual number should be higher than $400 million, but is benefited by a [...]
I was on BNN (a Canadian version of CNBC) today (click here to watch), discussed American Express (AXP). Why it is a good company, but a fairly valued (at best) stock.
Financial stocks had a huge run up from their bottom. Many have doubled and tripled, but are they still cheap? It’s almost impossible to value big financial institutions like Citigroup (C), Bank of America (BAC), or Goldman Sachs (GS) — they’re a lot like hot dogs — you don’t really know what’s inside of them; [...]
Given my usual warning, I don’t want to discuss politics in my writings for two reasons: it bores me to death and I’ll upset 55% of my readers. But an investor cannot ignore politics especially today. What happens in Washington doesn’t stay in Washington. In his healthcare proposal President Obama is using a tactic described [...]
IMS Health (RX) did not have a spectacular quarter to put it mildly. Revenue decline (on constant currency basis) accelerated to 4% from a 2% decline last quarter. Pharmaceutical companies are becoming more stingy and thus RX’s business got pinched. However, most of the revenue damage is taking place on the consulting side of the [...]
I’ve received a few emails asking my thoughts on Microsoft’s (MSFT) quarter. Here is my take: this is probably the least meaningful quarter in the company’s recent history. MSFT is about to introduce Windows 7 (and a slew of other products.) If I were a corporate customer, I wouldn’t be buying Windows Vista now if [...]
It is interesting to observe the excitement the Street has with Caterpillar’s (CAT) earnings. They were better than company thought last quarter, but sales were still down 41%. I have to give CAT credit for cutting costs as much as they did. But here is what caught my attention in the quarter: the area that [...]
My doctor said that my bad cholesterol is high, and of course my good cholesterol is low, and I’m too fat (well, actually the wife said that). So, instead of following the fine American tradition of supersizing my Big Mac with Lipitor, I’ve decided to take a slightly different route – I tweaked my diet: [...]
The word contrarian is often overused in investing, I have yet to meet an investor who bragged about being a crowd follower; therefore, everyone is a contrarian. Contrarian investing is very difficult as it requires one to be on the lonely side of the ledger as truly great opportunities present themselves in stocks that everyone [...]
Reserves deplete faster than oil (in general) Oil/natural gas ratio: the price of oil divided by the price of natural gas is at an all-time high (or close). This ratio stands at 17 (historically it has been at about an 8 or so), Natural gas prices will go up, oil will decline, or both. Also, natural gas is not a good hedge [...]
Call it the wishful thinking of the guy who owns stock, but the news flow from the company this week was excellent:Microsoft (MSFT) MSFT did something very uncharacteristic. It did not push back the release of Windows 7, which will be released on Oct. 22. Bing is excellent. I played with it for a couple [...]
When I think of Microsoft stock, images of Susan Boyle in “Britain’s Got Talent” come to mind. The Scottish woman appeared — middle aged, awkwardly dressed, unsure of herself, unattractive by conventional (stereotypical) standards — and expectations of her singing were in line with her appearance. As long as she did not fall off the [...]
Got a letter from Bank of America (BAC) today that informed me that I am a great customer and also mentioned that B of A will be raising fees and canceling rewards on my credit card. Maybe this is the time to own well-run bank stocks with solid balance sheets. They’ve got incredible pricing power. Though [...]
I own Microsoft (MSFT) stock, and I do believe it is one of the steals of the century. But when I read that the code name for a phone, that is supposed to capture the days of glory from Apple’s (AAPL) iPhone, is “Pink,” I lose some of my faith in the company. I know it [...]
If you thought banks like Citigroup (C) made money in the first quarter, think again. Its business just deteriorated and bonds declined so much, but ironically that was one of the biggest moneymakers for Citi. The lesson is: if you screw up, screw up big, drive your bond prices into the ground and voila your profitability increases. [...]
S&P 500 earnings topped out at about $84 a share in June 2007, while corporate profit margins were 44% above their average since 1980. At the time, these numbers were inflated by global bubbles in real-estate, commodities, liquidity, and growth expectations–a lot of global bubbles. Since 2007, most of the bubbles deflated, stocks plunged, [...]
A very interesting cover story article in BusinessWeek about Exxon Mobil (XOM). I am usually skeptical of cover story articles, especially from BusinessWeek as in the past they’ve been contrarian indicators. This time they are onto something (ok, that is maybe because I agree with them). As I’ve written in the past, Exxon is a [...]
The Middle East is not immune to the problems around the world and to some degree it’s probably more vulnerable as these countries have not faced a crisis in a while. Thus they are likely to have more excess fat around the edges. We are finding from headlines that Kuwait is having a bank crisis. [...]
I did three 5 minute segment interviews on Yahoo TechTicker with Aaron Task and Henry Blodget. Here are links to the videos: Only Time Can Cure What Ails Us: Stocks Slump on Bailout, Stimulus News Range-Bound at Best: The Long View on Stocks Isn’t Much Better, Says Vitaliy Katsenelson Active Value Investing: The Bull Case for [...]
Fiat’s and Chrysler’s new partnership is borderline good or, at a minimum, a non-event for Chrysler. It’s great for Fiat, but horrible for General Motors (GM) and Ford (F). Chrysler gets access to Fiat’s technology and smaller cars. That’s good but Fiat doesn’t appear to be willing to throw a lot of cash into Chrysler’s [...]
SuperValu‘s name and ticker symbol, SVU, are quite contradictory. One indicates a value manager’s dream–super value, a great investment–while the other is an acronym for the special victims unit–a value trap, a value investor’s nightmare. Which one is it? I believe it is the great investment. SuperValu is the fourth-biggest grocer in the U.S., if [...]
A basic property of religion is that the believer takes a leap of faith: to believe without expecting proof. Often you find this characteristic of religion in other, more unexpected places–like the stock market. It takes a while for a company to develop a “religious” following: Only a few high-quality, well-respected companies with long track [...]
In crazy times like today, all one could and actually should ask for is sanity. Yes, sanity–a clear mind free of noise to deal with the insanity that is thrust upon us by a volatile and noise-making machine also known as the stock market. We find ourselves glued to the computer screens or CNBC waiting [...]
When I think of the Jos. A. Bank (JOSB), I think of Yogi Berra’s saying “Nobody goes there because it is too crowded.” Only in the case of JOSB, it sounds like this: “EVERYBODY goes there because it is NOT crowded.” As most men who shop there will attest, you are lucky to see and [...]