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"Stocks are really attractive right now," says Oakmark's Bill Nygren. Investors are...

"Stocks are really attractive right now," says Oakmark's Bill Nygren. Investors are significantly overpaying for safety and income, and that is giving us value where investors are willing to step up and take some risk. The companies he likes are focusing on investment to grow EPS faster than they grow earnings - largely through stock buybacks - rather than paying out cash flow through higher dividends. Some favorites of his: Capital One (COF), Comcast (CMCSA), Oracle (ORCL) and Ebay (EBAY). (video)
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Comments (9)
  • SoldHigh
    , contributor
    Comments (1013) | Send Message
    Are stock buybacks the only idea these companies have to maximize earnings?
    31 Jul 2012, 08:41 PM Reply Like
  • rambler1
    , contributor
    Comments (776) | Send Message
    Yes and always above book value, and when the prices are generally dear. It also helps all the b.s. 10 year options these guys get to run the company. If they believe in what they did let them buy the stock in the open market when they thought the time was right.
    31 Jul 2012, 10:13 PM Reply Like
  • PalmDesertRat
    , contributor
    Comments (3585) | Send Message
    I agree with the general premise-there are still many people so terrified of risk that they're ignoring great valuations.


    There are many stocks out there with ebitda/market cap in excess of 20% and who can pay off all their liabilities,not just debt,in a year or less. intc,xom,oxy,eog come to mind. there are many more.
    31 Jul 2012, 08:57 PM Reply Like
  • Ted Bear
    , contributor
    Comments (671) | Send Message
    Just have to love some of these so-called investment managers.


    Stock buy backs are one of, if not the, worst uses of corporate capital. They imply that the business is shrinking and that the management can not find ways to grow the business sufficient to keep the balance sheet from contracting. A contracting business is not something you want to be invested in longer term. HPQ would be a classic example. They used every trick in the book to try to keep the earnings growing: acquisition, buybacks, and massive expense cuts. In the end, they haven't had a new product in some thirty years (the ink-jet printer was the last) and the company is floundering a la Kodak for so many years.


    Good luck Bill, but i think you are in a lot of canoes with leaky bottoms: fine if you can get to shore quickly.
    31 Jul 2012, 09:02 PM Reply Like
  • youngman442002
    , contributor
    Comments (5129) | Send Message
    Just cause they say they are going to buy back stock...does not mean they ever do..
    31 Jul 2012, 09:29 PM Reply Like
  • Archman Investor
    , contributor
    Comments (3028) | Send Message
    It is so disgusting to watch a salesman like Bill Nygren. (Yes folks that is all he is..a salesman.)


    The outright lies coming out of his mouth. Stocks weren't cheap 20% ago. Or 25% ago. Now they are cheap? Especially growth companies? Which I am sure Oakmark is loaded up on. Gee...I wonder why they desperately need people to sell income and buy growth?


    People need to understand something. It is something that I have been trying to educate people about for years. Bill Nygren, like most of his kind, know nothing. They mean nothing. He is a salesperson. That's all. All of his MBA's, risk management classes, etc. etc. are nothing more that smoke and mirrors. They are a distraction. He is a salesman.
    Think about it. With all his expertise, education, Wall Street experience, etc. the best stocks he can come up with are the same old stocks that are touted in the media over and over and over.
    Wall Street is about sales and getting you to buy what they need you to buy so it makes them money. It is a joke.
    Bill Nygren has not a clue if stocks are cheap. He has no idea where the market is going. What he does need are suckers to give him more money so he can collect more asset gathering fees. That is their real goal. Nothing more. Nothing less. It does not matter if he loses 90% of your money. He gets paid.
    Just ask that "legendary" former fund manager Bill Miller. He's worth a hundred million, has 300 ft yachts, houses all over the world and over the past 14 years lost more money for his fund holders that the majority of mutual fund managers.


    Bill Nygren's fortune as a mutual fund manager relies on one thing:
    a bull market. Without it he has no clue how to manage money.
    You could not pay me to invest in a mutual fund.
    31 Jul 2012, 10:04 PM Reply Like
  • HarryWanger
    , contributor
    Comments (188) | Send Message
    Your criticism of Mr. Nygren is harsh yet warranted. The goal is to get people to throw money into the arena. If they don't, he doesn't make money.


    And how do you convince people to throw money into risk assets when the entire growth of the world is starting to contract? Easy, tell them Amazon will dominate retail for the next 100 years and you'd be a fool not to put your money on a company with a p/e of 200 and staring down a loss for next Q.


    See how easy that was??
    1 Aug 2012, 12:33 AM Reply Like
  • Counterpoint
    , contributor
    Comments (914) | Send Message
    Let's all talk in ten years...long CMCSA, ORCL.
    1 Aug 2012, 08:59 AM Reply Like
  • Philip Cohen
    , contributor
    Comments (1607) | Send Message
    eBay is a favorite? Give me a break ...


    A summary of the ongoing criminal activities of eBay, the greatest knowing facilitator of wire fraud that the world is ever likely to know ...


    “Shill Bidding Fraud on eBay Auctions: Case Study #5”


    eBay / PayPal / Donahoe: Dead Men Walking
    1 Aug 2012, 04:00 PM Reply Like
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