Health Net (HNT) is a managed care company that operates in California, Arizona, Oregon and Washington. It offers a full spectrum of managed care products and services to businesses and individuals. It also has a government sponsored contract with the Department of Defense under the TRICARE program.

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Health Net is a small player amongst giants like UnitedHealth (UNH), Express Scripts (ESRX), WellPoint (WLP), Kaiser Permanente, Humana (HUM) and Blue Shield of California. Cigna (CI) and Aetna (AET) however, don't have significant presence in Health Net's major market, California. Despite the odds and because of its strong focus, Health Net has managed to lead in the Medicare and Medicaid market segments in California.

From the 2013 annual shareholders meeting (emphasis mine):

Jay M. Gellert - Chief Executive Officer, President and Director

(Health Net) It's a company that has a very strong Medicaid franchise

ARRIS Group (ARRS) recently acquired Motorola Home for $2.35 billion. Due to uncertainty concerning the outcome of the acquisition the market values the new combined company much below of what the two parts are worth.

Business

ARRIS provides the broadband communications industry with infrastructure products, software and services that enable Multiple Systems Operators (MSOs) to build, optimize and maintain their broadband networks.

In simpler terms ARRIS provides cable operators with high-end modems and other equipment for every point of their network, from their network hubs to their customers' homes. It also provides them with software suites and other applications that help them to effectively manage and monitor their network operations and optimize their bandwidth usage.

Most of ARRIS's products are made by partner manufacturers. Besides its in-house designed products ARRIS resells also third party equipment according to the needs of its customers. ARRIS is the second biggest vendor by shipments

Wabco (WBC) is part of a global duopoly in commercial vehicle systems that improve vehicle performance and safety and reduce overall vehicle operating costs. Wabco is a classic example of a focused wide-moat company that excels in its markets and grows in double digits over time.

Business

More specifically, to understand what Wabco does take a look at the following table and photos. The table is a list with the company's main products and what they do and the photos show what parts of a truck/bus/trailer/car/other vehicle Wabco designs and manufactures.

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The table is from Wabco's 2012 10-K and the pictures from the company's website.

Wabco's revenue comes mainly from selling components to truck & bus OEMs with 62%, next comes the aftermarket business 25%, trailers with 9% and cars &

<< Return to Part 2

This is one part of a three part series about less known public stock holdings of Mr. Buffett and Mr. Munger. You can find the other two parts here.

In this series of articles I will present to you the lesser known holdings of Berkshire Hathaway (BRK.A, BRK.B) as they can be found in the company's fillings and I will provide you with the following information.

• What is the business of each company.

• What is its competitive advantage (i.e. what's the reason Berkshire bought them).

• What is the state of the company's valuation (is it cheap or expensive).

My purpose is to provide some investing ideas and some companies that are worth watching in case they become cheap enough to buy. I hope you'll find the information provided here useful.

Business

From Yahoo! Finance:

Starz, through its

This is one part of a three part series about less known public stock holdings of Mr. Buffett and Mr. Munger. You can find the other two parts here.

<< Return to Part 1

In this series of articles I will present to you the lesser known holdings of Berkshire Hathaway (BRK.A, BRK.B) as they can be found in the company's fillings and I will provide you with the following information.

• What is the business of each company.

• What is its competitive advantage (i.e. what's the reason Berkshire bought them).

• What is the state of the company's valuation (is it cheap or expensive).

My purpose is to provide some investing ideas and some companies that are worth watching in case they become cheap enough to buy. I hope you'll find the information provided here useful.

Phillips 66 (PSX)

Business

From Yahoo! Finance:

Phillips 66 operates as an independent

This is the first article of a three part series about the less known public stock holdings of Mr. Buffett and Mr. Munger. You can find the other two parts (after they are published) here.

In this series I will present to you the lesser known holdings of Berkshire Hathaway (BRK.A, BRK.B) as they can be found in the company's latest fillings and I will provide you with the following information about them.

• What is the business of each company.

• What is its competitive advantage.

• What is the state of the company's valuation (is it cheap or expensive).

My purpose is to provide some investing ideas and some companies that are worth watching in case they become cheap enough to buy. I hope you'll find the information provided here useful.

Chicago Bridge and Iron (CBI)

Business

From Yahoo! Finance:

Chicago Bridge & Iron Company N.V., an energy

There have been many debates over the past few months on whether Intel (INTC) has lost mobile once and for all and if it will be able to get in and take the lead. There have also been many people and analysts that have taken the view that the ARM (ARMH) ecosystem is here to stay and will eventually take the reins from Intel in many areas of the semiconductor industry.

In this article I will address those views but not from a technical point of view, like the excellent fellow contributor Ashraf Eassa has done over and over again. Instead I am going to focus on the three things that make Intel tick and are the reason it enjoys an almost an undefeatable position in the semiconductor industry.

Scale

The first and more obvious advantage Intel has over its competitors is its scale. By scale I mean that

A couple of weeks ago, Greenlight Capital released its Q1 letter to its investors. As usual it leaked to the press and we were able to take a look at what Mr. Einhorn is doing with his portfolio. One thing that caught my attention is that he closed his long position in Xerox (XRX).

This is Mr. Einhorn's related comment:

Xerox Corporation (NYSE:) did not perform as well as we had hoped. We bought the shares based on expectations that synergies from its acquisition of Affiliated Computer Services would lead to revenue growth and margin improvement. Unfortunately, the company did not deliver. Despite this, we sold the shares for a modest gain.

I am a big fan of Mr. Einhorn and have tremendous respect for him and his investing abilities but in this case I believe that either he made a mistake or there are more reasons than

A few days ago Microsoft (MSFT) presented its new Xbox named "Xbox One". However in this article I'm not going to talk to you about the console. I'm going to talk to you about something bigger, the foundations of which were completed with the launch of the Xbox One. I'm talking about a project that Microsoft is working on for quite some time and that is slowly but steadily coming to fruition.

(click to enlarge)

Write once, run anywhere.

This phrase is the core of what Microsoft is creating. A truly universal across-devices platform. Every device we have from watches and smartphones to PCs to TVs will operate within the same ecosystem, the same apps, the same programs, the same interface. In this platform you will be able to access all your apps, programs, files, media from any device without any limitation other than the size of the

Tesla Motors, Inc (TSLA) has recently come into the spotlight due to an extraordinary stock price move following the release of its financial results for Q1, 2013. This was because Q1, 2013 was the first quarter in its history that Tesla made a profit. It also sold more than 4,750 Model S cars outpacing other luxury brands.

(click to enlarge)(Chart from BigCharts.com)

The company that Elon Musk co-founded has every reason to be celebrating these results since they are one step closer to Mr. Musk's vision. Affordable mass market electric cars that surpass in quality their conventional competitors.

According to reviews from auto magazines & sites like Car & Driver Tesla's Model S isn't just the new electric car on the block, it is a top-notch product that heartily beats its traditional gasoline & diesel competitors both in driving experience and functionality.

Due to its

As you probably already know, BlackBerry (BBRY) "rose from the dead" a few months ago when launched its new "BlackBerry 10" OS along with two brand new smartphones the Z10 and Q10. So far the Z10 sales seem to be ok so far with one million phones shipped and Q10 is expected to do even better.

(BlackBerry's Z10 & Q10 smartphones)

Further good news for the company is coming from its home market, Canada. BlackBerry has more than doubled its market share within the first quarter of 2013. I expect this momentum to continue all over the world as BlackBerry's Z10 & Q10 become available in other countries and in greater quantities.

Another rather anecdotal indication that BlackBerry fans are coming back is a recent poll from TechRepublic that shows that 64% of converted BlackBerry fans are willing to return due to BlackBerry's Q10.

Good news for Microsoft (MSFT) continues to come, strengthening the bull case for the stock. According to the latest IDC report for Q1 2013 Windows Phone surpassed BlackBerry (BBRY) in sales and climbed to third place in the smartphone market.

Windows Phone shipments more than doubled in relation to Q1 2012 and are more than 16% higher from the last quarter of 2012. It is clear now that Windows Phone is rapidly gaining momentum and continues to gain market share.

(click to enlarge) (Source: allthingsd.com)

One of the major factors for building momentum for Windows Phone adoption continues to be Nokia (NOK), which has created some excellent products with its Lumia series and continues to market heavily all around the world.

Another piece of good news is coming from the Windows 8 front in the PC and tablet world. Microsoft announced that the preview of the

LinkedIn (LNKD) is the "strictly business" equivalent of Facebook (FB). It is a social network that people use to connect with each other in order to do business. Companies use LinkedIn as a sales and recruiting tool. People use LinkedIn to promote their skills, advance their careers, meet with like-minded professionals all over the world, find a new job or search for partners to help them with a new project.

LinkedIn has an effective monopoly since it enjoys the same network effect that Facebook does. The network effect works like this. The more users the company has the greater value those users enjoy. So even if a competitor launches a site similar to LinkedIn people will still prefer LinkedIn because of its greater network (number of users). This is a great barrier of entry that prevents new entrants from competing effectively with it.

However, this doesn't mean that LinkedIn operates

When people think of Microsoft (MSFT) they usually think of it as an old, malfunctioning company of the past. They usually think it is a two product company (with just Windows and Office) that was lucky enough to succeed in a third one (XBOX) but nothing more than that.

However nothing could be further from the truth. Microsoft has several products and services to offer to consumers and businesses all over the world. Today I will only focus to a few of them that are not so well-known but have the potential to change Microsoft's revenue mix and boost its revenue growth dramatically. All these services/products have one thing in common, they are offered through the cloud.

Azure is Microsoft's solution to businesses seeking a flexible and cost-efficient way to use internal cloud based applications of their own or other's design. It also allows businesses that have a variable

I am constantly on the lookout for undervalued stocks of great companies with a strong and durable competitive advantage. However, during the past three or four months it has become extremely difficult to find a good company that isn't already overvalued or fair priced.

Having said that, you can easily understand how happy I was when I checked out the recently released 10-Q of Warren Buffett's Berkshire Hathaway (BRK.A, BRK.B) for Q1 of 2013. It seems that Berkshire at its current valuation is a company that offers limited downside risk and decent upside potential.

As of March 31st Berkshire Hathaway had book value of $82 per share. In the last annual letter from Mr. Buffett sent to Berkshire's shareholders he made it clear that he is willing to buy back Berkshire stock up to 120% of its book value. This was also repeated in the company's latest 10-Q.

At the 2003 Berkshire Hathaway's shareholders meeting one investor asked Mr. Buffett:

"What is the ideal business?"

And Mr. Buffett responded:

"The ideal business is one that earns very high returns on capital and that keeps using lots of capital at those high returns. That becomes a compounding machine. So if you had your choice, if you could put a $100 million into a business that earns 20% ($20 million) on that capital, ideally it would be able to earn 20% on $120 million the following year and so on. You could keep redeploying capital at [those] same returns over time.

But there are very, very, very few businesses like that... we can move that money around from these businesses to buy more businesses."

The type of company Mr. Buffett describes is exactly the type of company Expeditors International of Washington (EXPD) is. Expeditors is a global provider

The main bear argument about Microsoft (MSFT) died yesterday when Strategy Analytics published a report that showed Windows tablets gaining 7.5% of the tablet market even though they have existed only about six months.

According to prnewswire.com Strategy Analytics also mentioned that:

Microsoft captured a niche 7.5 percent global tablet share in Q1 2013. Very limited distribution, a shortage of top-tier apps, and confusion in the market, are all holding back shipments.

This means that Microsoft's 7.5% market share by OS is definitely going to grow going forward as these "childhood" problems are resolved. Limited distribution is only a matter of time as OEMs confirm the popularity of Windows tablets and Microsoft gains enough experience to solve its own problems with Surface's distribution.

As for apps things are improving every day as more and more developers find it worthy to create an app or transfer an existing

Moore's law says that computer processors will double in complexity every two years. That has largely been interpreted as "the number of transistors per inch on a chip will double every two years."

Although this is an overly simplification of what Mr. Moore said back in 1965, it has been true for the last 50 years or so. However, a possible end to this trend may be in sight when 1nm node manufacturing becomes available around 2028.

Although science may find a way around this barrier with nano-tubes or quantum computing, a prudent company like Intel (INTC) has to take seriously into consideration hedging against the possibility of a not-so-bright future.

"But why?" you may ask, "Intel can just keep using the same technology over a longer period of time." Although this is possible it is not a good scenario for Intel. If transistor manufacturing stops advancing, or new

With the market racing upwards during the past months it gets harder and harder to find a decent low-risk investment. However there are still some opportunities out there and AT&T (T) is one of them.

AT&T is leader in the mature telecommunications market and has many good traits that make it an attractive investment:

1) It is a growing business in a still growing market.

The following excerpts are from the company's Q4 2012 earnings call transcript:

John Stephens - CFO

One of the highlights of the quarter was our strong postpaid growth where we had our largest gains in 3 years, details are on slide 9. We added almost 800,000 postpaid subscribers in the quarter with strong gains in smartphones, tablets and mobile premise solutions. Overall we added 1.1 million new subscribers with additional gains in connected devices and reseller.

And while overall broadband subscribers remained

Any sane investor that looks at Apple's (AAPL) current valuation around $430/share has to at least ponder this for a while. Apple is trading only at 6.8 times its expected 2013 earnings excluding cash and investments. This kind of valuation implies a company in a rapidly declining business.

Fortunately for its investors though, Apple's situation isn't remotely close to something like that. Its main product the iPhone is still thriving all over the world and has still a long way to go. In particular it is just beginning to expand to China and India, the world's two biggest countries by population and the two biggest untapped markets for Apple.

In China the estimated market for smart-phones is bigger than the US and consists of approximately 330 million smart-phone users. Furthermore, it is expected to grow to 500 million by the end of 2013. Despite this fact, China represents