Insmed (INSM) continues to be a Benjamin Graham Net Net stock. As I mentioned in my October portfolio update, I was waiting for the quarterly results to be released before I took further action.

INSM Still a Net Net Stock

After a full quarter, INSM still remains as a net net, selling below liquidation prices despite the market run up during October.

I’ve been hearing a lot about Buffett’s recent purchase of Burlington Northern Santa Fe (BNI).

Whether the choice of a partial stock deal means that Buffett considers Berkshire (BRK.A) shares to be overvalued, or whether Buffett is going “all in” in American stocks and commodities, or is he just making a last hurrah of asset allocation before retiring? Maybe he is simply bearish on the entire economy.

October 2009: S&P -1.98%

October 2009: OSV 10.18%

Looking at the results of Mastech Holdings' Q3 financial reports, I see a company that is continually improving its business and strengthening itself. But Wall Street thinks otherwise by punishing the company down 20%.

Revenues for the quarter were $17.2 million, compared to $24.1 million reported in the corresponding quarter last year.

If you’re into value investing, which of the three financial statements do you concentrate on the most?

I tend to perform balance sheet analysis and cash flow statement analysis much deeper than the income statement. I would guess that you do the same.

It turns out that value investing is something that is in your blood. There are people who just don’t have the patience and discipline to do it, and there are people who do. So it leads me to think it’s genetic. - Seth Klarman

To my surprise there are still a handful of Graham net net stocks that haven’t risen above their liquidation value.

In my calculations, I haven’t included any restricted cash as it is usually designated for other purposes and can no longer be used for the business. This isn’t always the case and you will have to dig into the filings to determine whether it really is restricted or will be released.

Old School Value Stock Portfolio Performance

When you look hard enough and turn over enough stones, you are bound to find something sooner or later. One company I found and purchased recently is Insmed, Inc. (INSM).

Before going into what it does, the company is a pure Benjamin Graham net net stock, without including any long term assets or intellectual property, as well as a negative enterprise value stock. It is exactly the type of stock I like.

I’ve been focusing a lot of my time for the past 3 weeks dissecting and reverse engineering Bruce Greenwald’s earnings power value EPV method and it’s time I performed a stock value calculation based on EPV.

Microsoft (MSFT) will serve as a fine example since you know the history of the company and what it does. I’ll then compare the EPV valuation price with a DCF value calculation and Benjamin Graham’s formula. I’ll try to add as much information for those that haven’t read Greenwald’s EPV book.

Bruce Greenwald’s Method to Calculate Maintenance Capex

In a previous post on how to calculate maintenance capital expenditures, I outlined the general aka quick and dirty method of calculating maintenance capex which is

Maintenance Capital Expenditure = Depreciation and Amortization

Recent Merger Developments

It’s been a while since I last wrote about any special situation.

But in case you haven’t noticed, merger and acquisition activity has been steadily increasing.

Warren Buffett’s Stock Picks and Fair Value: Part 1 | Part 2 | Part 3

This is the conclusion of the 4 part Warren Buffett stocks series.

It took me a year or so to purchase the book and then another month or so until I finally got around to reading it, but Value Investing: From Graham to Buffett and Beyond is definitely a great addition to the serious investor. Rather than this being a “book review”, it’s more of a discussion on Greenwald’s valuation methods.

Portfolio Movers

Lots of companies in my portfolio announced earnings in August. Started off with good results from Gen Growth Prop (GGWPQ.PK) which appreciated nicely this month.

Warren Buffett’s Stock Portfolio: Part 1 | Part 2

We are now up to the second half of valuing the holdings of Berkshire Hathaway (BRK.A) via the DCF valuation method, Ben Graham formula as outlined in the Intelligent Investor, and a simple multiples valuation based on PE, cash flow, sales and other metrics compared to the competition and industry.

Mastech Holdings (MHH) released their 10-Q, which I found to be very good, on Aug 14.

A lot of the numbers and financial details are similar to what I wrote previously on MHH so in case you missed the first stock analysis, here’s why I like MHH.

Warren Buffett’s Stock Portfolio: Part 1 | Part 2

Following on from the first part of Berkshire’s Stock Portfolio covering the first 10 stocks, let’s go through the next 10.

With Berkshire Hathaway (BRK.A) disclosing their holdings in their latest 2nd quarter 13-F, I thought it would be interesting to go through each position that is held and calculate the stock value in hopes of gaining some ideas.

Going through portfolios of respected investors is another way of generating ideas. Davy Bui of The Enlightened American does a fine job of tracking and displaying hedge fund holdings of respected investors in an easy to read format.

Here’s some controversy coming your way. A stock price valuation of Apple (AAPL) by a value investor.

Warning: if you love Apple, I mean really l.o.v.e. AAPL, this may not be what you want to hear.