Negative sentiment abounds in ExxonMobil with several notable investors voicing negative views on the company. Their argument states that ExxonMobil has failed to replace reserves and is borrowing its dividend. Additionally, the ExxonMobil bears believe that the company is effectively in liquidation because the company is not replacing its reserves. Looking at ExxonMobil’s reserves and … Read more
Becton Dickinson is a leader in disposable medical supplies. The company’s stock has dropped 12.5% since hitting $80 in March; however, the company’s fundamentals remain firmly intact and we believe the stock at current levels offers a comfortable margin of safety to our estimate of fair value. Becton Dickinson was formed in 1897 by two … Read more
Walgreen announced last week that it will not participate in CVS Caremark’s retail pharmacy network for new and renewed pharmacy benefit management (PBM) contracts. In retaliation, CVS Caremark said that it will expel Walgreen from its retail pharmacy network within 30 days. In our opinion, both companies stand to lose from this dispute. CVS Caremark … Read more
Two weeks ago, Apple surpassed Microsoft in stock-market capitalization to become the second-most valuable publicly traded U.S. company, trailing only ExxonMobil. Apple is by far the more popular stock. Year-to-date through June 4th, Microsoft is down 14.5% while Apple is up 21.5%. Over the past five year, Microsoft is up 1.5% while Apple is up … Read more
There are quotes that frequently come to mind when we try to make sense of the market”s periodic bouts of increased volatility. The first quote is from the Intelligent Investor written by Benjamin Graham: “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting those … Read more
A subsidiary of Enterprise GP Holdings, Energy Transfer Equity, recently entered a deal to purchase the general partner of another master limited partnership, Regency Energy Partners. As a unitholder of Enterprise GP Holdings, any transaction that grows the assets under Enterprise GP’s operations will enlarge the overall cash flow for their unitholders. Enterprise GP increases … Read more
This past weekend”s edition of Barrons contained a constructive article on Kraft Foods, titled “A Sweeter Future for Kraft.” The article recounts that, at around $30 per share, Kraft trades right where it stood in 2001, when Kraft was taken public by Philip Morris. Kraft’s earnings per share last year were around $2–no higher than … Read more
"When new money is created on a grand scale, it must go somewhere and have some major consequences. One of these will be greatly increased volatility and instability in the economy and financial system." — J. Anthony Boeckh We are frequently asked for our opinion on matters that relate to the macroeconomic environment. Normally, we … Read more
Exelon Corp. is one of the largest, most respected utilities in the world with a market capitalization typically north of $30 billion. However, for a brief moment on Thursday, the stock market said it was worthless. Exelon was just one of a number of stocks that produced bizarre market quotes during the “Flash Crash” of … Read more
Microsoft reported quarterly earnings last week and as expected, Windows 7, the company”s new operating system, produced strong results. Total revenue increased by 6.3% to $14.5 billion. Microsoft’s Windows business reflected the strength of the personal computer market as revenues grew 28% year-over-year to $4.4 billion. However, Microsoft reported soft results for its other businesses. … Read more