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Microsoft Hell

in FP: Latest/Stock Analysis

As a value investor I used to spend a great deal of time in Microsoft hell – on one hand there was the company with enormous cash flows, an incredible return on capital, a huge moat, a cash-rich balance sheet, and trading at single-digit multiples (if you adjust for cash).  But on the other hand…

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No Kodak Moment for Hewlett-Packard

in Stock Analysis

Investment mistakes usually fall into one of three categories: analysis, behavior or bad luck. In October 2011, after the shares of Hewlett-Packard Co. had been halved from about $48 earlier that year, I made a case for the stock. That was a mistake. There was no bad luck. I made several errors in my analysis. In this column I want…

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How Much Would You Pay for the Apple Ecosystem?

in Stock Analysis

Earlier this week I wrote about the psychological challenges that Apple shareholders face. I also discussed the evolution of Apple’s “i” gadgets — the iPod, iPhone and iPad — and how they have created an ecosystem unlike those of other technology companies. Apple’s ecosystem is an important and durable competitive advantage; it creates a tangible switching…

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Looking for “Herbal” in Herbalife

in FP: Latest/Stock Analysis

Months before the recent Sturm und Drang surrounding nutritional-supplement maker Herbalife, my firm took a long, hard look at the company. On the surface it was a value investor’s dream: great balance sheet, high return on capital, high revenue and earnings growth, and attractive valuation. Of course, there was one problem: The validity of its multilevel marketing…

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