The Manual of Ideas

The Manual of Ideas
Contributor since: 2008
Company: BeyondProxy LLC
Yes, got it. It does seem likely it was a conversion rather than an outright purchase. Glad we could clear this up. Thanks!
Thank you -- that's very helpful. Here is a link to Verisk's proxy statement, which shows Berkshire owning 7,156,300 Class B shares: sec.gov/Archives/edgar...
The most recent 13F-HR filing shows Berkshire owning 2,101,125 Class A shares: sec.gov/Archives/edgar...
It seems that Berkshire wanted to increase its position in Verisk by buying the publicly traded Class A shares. The Class B shares are almost entirely held by Berkshire (26%), American Financial Group (21%), Old Republic Asset Management (16%), and W.R. Berkley (13%), so buying more Class B shares would probably have been too difficult.
Could you point us to a past filing that shows this because Verisk was not listed in Berkshire's 13F for Q1. The 13F does include stocks owned by Berkshire's insurance subsidiaries. Thanks.
We've only seen the transcript: www.scribd.com/doc/567...
He wasn't selling anything other than the book. Since then, Greenblatt has become associated with Formula Investing, which manages money based on the "magic formula."
As Lou Dobbs would say, "Amen, brother!"
See slide 23 of the following presentation for the factors that will affect earnings in the coming years: files.shareholder.com/...
Detailed information on the pipeline is available at www.lilly.com/research...
Lilly's 10-K is also a good place to look: sec.gov/Archives/edgar...
Thank you, good catch. We did erase the REIT designation from Walter due to the Green Tree deal but had not yet updated the future dividend information. We appreciate you pointing this out.
Thanks for the clarification. The Green Tree deal has transformed Walter to the point that it is no longer a good income-oriented investment.
TEF was also initiated as a new position by Fairholme's Bruce Berkowitz who has had a tough year but has done very well long term. Of course, just because Berkowitz owns it doesn't mean it is a great investment, but it does suggest that you have smart people agreeing with you.
We will have an in-depth piece on for-profit education companies in just a few days, please stay tuned!
That's a great quote, thanks!
UNTD pays a dividend of $0.40 per year while EPS estimates are $0.80+ per year for the next couple of years. EPS might decline materially at some point but no one knows for sure. In the meantime, the $0.40 dividend seems reasonably secure.
Yes, UNTD has been in decline. Judging by consensus EPS estimates for the next two years, the decline is expected to continue but should do so at a modest rate, perhaps suggesting that the company can stabilize revenue at some point. If they can get Classmates and Memory Lane to take advantage of social features and develop growing subscription models, maybe UNTD could turn things around. They should take a close look at Ancestry.com (ACOM) for a highly successful model in a similar Internet niche.
MV = market value of the common stock
EV = enterprise value = market value minus net cash
We did not quote historical stock price data but rather book value per share. That probably explains the discrepancy.
We show the indicated forward dividend yield for each company. In the case of PDLI, the company paid on June 15th a "regular quarterly dividend payment of $0.15 per share to all stockholders owning shares of PDL." Since management labeled the $0.15 payment as a "regular quarterly dividend", we assume the company will pay $0.60 per share over the next twelve months.
Thanks for the information. These types of quantitative screens typically don't catch same-day news, and they don't capture the reasons behind (seeming) dividend increases. These lists are meant as a starting point for further research, not a final word on potential opportunities. Our team profiles, analyzes and values companies in greater detail in our monthly print report. For more info, please see manualofideas.com/free...
Yes, good point, thanks!
The point about Warren Buffett was focused on short selling. Buffett generally does not sell short and has commented in the past that short-selling is a hard way to get rich (emotionally draining, plus markets generally go up over time).
Buffett disciples Eddie Lampert and Bruce Berkowitz recently invested in Cisco, so the stock is clearly in an interesting valuation range.
There is nothing wrong with disagreeing, and no one knows who will be right. Superinvestors have been wrong plenty of times, and they will be wrong again. Maybe on Cisco, maybe not.
Where I think we fundamentally disagree is the timeframe investors should have when evaluating equity. Stocks are infinite-time-horizon securities, and they should be valued based on discounted projected future cash flows. Implying that looking out one year is too far means that you are playing a guessing game as to how much more other investors will dislike Cisco in the short term, or what bad news might come out of the company in the next few months. Such short-term trading has little to do with security analysis.
Yes, one should always reevaluate one's thesis and sell a stock if the thesis changes materially or the valuation is no longer attractive. However, when you do reevaluate your thesis, you need to appraise a stock as if you are going to hold it for a long time.
Let's agree to disagree and revisit this a year from today, in June 2012. We'll see then if Cisco is higher or lower than $15. The only thing that is nearly 100% certain is that we will have an answer.
Shorting may work occasionally but it's not how Warren Buffett got rich. He got rich owning stocks that almost everyone viewed negatively at the time of his purchases.
We did not choose the title.
We agree that ESPN is a very valuable property. Disney should consider the pros and cons of spinning off ESPN into a separate entity. This could unlock a lot of value and allow Disney's management to focus on what the consumer typically associates with Disney -- the children's content and theme parks.
The Bunge article (seekingalpha.com/artic...) was a guest post by someone who is not affiliated with The Manual of Ideas. We are a long only, value-oriented equity research firm. Sometimes even as a long-focused research firm it makes sense to point out the risks in a company or industry.
It is good to know that Fredriksen has dealt fairly with his partners in the past -- this is certainly a positive.
You offer no specific argument as to why Cisco's EPS estimates "need to come down" and why we are "witnessing a kind of collapse." Those are big assertions you make without any factual backup.
Using his own fortune to buy up cheap assets may not help existing FRO shareholders much. If he's buying assets outside the company, he is creating a clear conflict. If he's buying them inside the company, at what terms will he give the company the money? How can we be sure that a large capital injection by him at "the bottom" won't be massively dilutive to current shareholders?
It would be impossible to "make a career out of trashing anything Alice says." It is apparently possible to make a career out of trashing Buffett. Not exactly a proud career, but a career nonetheless.
How is Schroeder's time not better spent doing something other than trashing a guy who ranks several standard deviations above the average CEO or fund manager, both in accomplishment and honest dealings? Let me guess -- because Schroeder has built a brand around criticizing Buffett. It's a business decision for her. And guess what else? There is a market for her writings because scores of fund managers are secretly intensely jealous of Buffett's stature and would love to see his reputation crushed.
Your point on the non-cash tax impact is valid, but it doesn't materially change the thesis outlined in the article.
You seem pretty confident that FCF will be down 40% in 2011. Could you provide some specific figures as to how you arrive at that? What about the positive impact from lower interest? If they succeed in their efforts to pre-pay debt with their cash (SPMD is currently negotiating this with creditors), debt could be down by nearly $700 million from yearend 2009 to yearend 2010 - that would lead to interest cost savings of ~$70 million in 2011 versus 2010.
Thanks. Yes, the difference between GAAP and non-GAAP financials should reduce starting in 2011 as deferred revenue for print products is amortized over the life of the directories, which is typically 12 months.
Another catalyst could come in February when 4Q10 net ad sales should be released. As the 3Q has historically been the weakest quarter for ad sales, investors may be extrapolating the weak 3Q10 figure of $395 million (reported on October 26). On a similar y-y decline as in 3Q10, net ad sales in 4Q10 should total $475 million. 1Q is also a strong quarter seasonally so numbers should be better over the next six months, especially if the economic environment for small businesses starts to improve. While the economic recession accelerated y-y ad sales declines in 2008 and 2009, there has been an evident decelration in y-y declines in 2010 to date. This should continue despite the secular pressure on print-based ad sales.
Another very intriguing idea from you, thanks!