While the dominant headlines yesterday centered around Warren Buffett & Berkshire Hathaway's (BRK.A) acquisition of Burlington Nothern Santa Fe (BNI), we wanted to highlight one of his other recent moves.

Having already trimmed his stake in Moody's (MCO) a few times prior, legendary investor Warren Buffett has sold even more shares of the ratings agency. On October 28th, 2009, Buffett sold 1,133,027 shares at a price of $24.8637. Additionally, he sold 19,600 shares the next day at a price of $25.2728 per share. This brings his total ownership to 38,066,685 shares. These sales are in addition to other transactions he completed back in the beginning of September where he sold 794,388 shares between $26-27. While he has obviously been selling shares, we need to highlight that he does still indeed own quite a sizable chunk of the company. We simply take note because he has now made multiple sales within a few months.

It seems it has been some time since I updated the performance of Standard & Poor's Dividend Aristocrats. Year to date through November 4, 2009, the Aristocrats have generated a better return than the Dow Jones Industrial Index, 12.2% versus 11.7%, respectively. However, the Aristocrats performance has trailed the return on the S & P 500 Index's return of 15.9%.

In the below table, I have shaded the rows for those companies that have cut their dividend this year.

It's still unclear how many former BusinessWeek editors will be hired by Bloomberg L.P., but one thing is increasingly clear: it could have been a hell of a lot worse. Peter Kafka describes the nightmare scenario: a purchase by private equity bloodhounds ZelnickMedia that would have been only marginally better than a simple shutdown of the magazine.

This is how one-sided the Zelnick offer would have been: McGraw-Hill (MHP) would have wound up paying Zelnick to take BW off its hands. In return, BW would have been ripped limb from limb, and the entire staff would have been laid off.

Once thought inconceivable, an interesting trend was uncovered in the October 29th The Wall Street Journal, there are a number of debt issuing firms foregoing the traditional credit rating process. In an article titled Credit Rating Now Optional, Firms Find, the Journal points out some globally prominent firms and governments have decided not to have their bonds and debt backed securities to be offered rated by any of the major credit rating agencies. Instead, these issuers are insisting that their investors do their own analysis of the cash flows and risks involved in each security.

This is a noteworthy trend as ratings from the major rating firms like Moody’s (MCO) and Standard & Poor’s (MHP) in some cases were seen as a rubber stamp authenticating debt and its associated risks. However, these agencies have come under scrutiny during the credit crisis as many of their ratings have been proven unreliable. Some would argue that the credit crisis exposed risks in highly rated debt issues that seemed to catch the agencies asleep at the wheel. The emergence of non-rated debt does suggest a lack of confidence or at least lack of necessity of these established guidelines. As the CEO of Italy’s Gruppo Campari was quoted as saying, “Our reputation is good….I don’t think a rating would have mattered that much.”

McGraw-Hill (NYSE: MHP) — Cloudy Forecast

Earnings Info: Earnings dropped 14%. MHP earned $1.07 a share compared to $1.23 in the same year ago period.

McGraw-Hill Companies (MHP) recently reported third quarter 2009 results. Quarterly earnings of $1.12 per share surpassed the Zacks Consensus Estimate of $1.06, but fell 8.9% from the $1.23 delivered in the prior-year quarter.

On a reported basis, including one-time items, earnings fell 13% to $1.07 per share. The decline in the top line, partially offset by stringent cost controls, resulted in the fall to the bottom line. Due to effective cost management, the company now expects to achieve the high end of earnings guidance range of $2.20 to $2.25 per share for fiscal 2009.

Q3 2009 Earnings Call

October 26, 2009 8:30 am ET

• ING drops on spin-off, rights issue. Dutch financial services company ING Group (ING) said Monday it will raise up to €7.5B ($11.3B) in a share issue, and split up its insurance and banking businesses, after reaching a deal to repay the government half of its €10B bailout loan ahead of schedule. ING has until the end of January to repurchase government-owned shares, and will launch the share issue on Nov. 25. "We appreciate the ongoing support of the Dutch state," CEO Jan Hommen said, "but fully recognize that it is in the best interest of all parties that we get back on our own feet as quickly as possible." Shares -8.1% premarket.
• Peltz takes a foothold in Legg Mason. Legg Mason (LM) will name activist investor Nelson Peltz to its board after he quietly accumulated a 4.3% stake; in exchange for the board seat, Peltz's Trian will agree to accumulate no more than 9.9% of the company over the next two years, and will vote its share in favor of the company's slate of nominees during that period. "We welcome Nelson," Legg CEO Mark Fetting said in a statement. "We look forward to benefiting from his insights and experience as we work together to build greater value for our clients and our shareholders." Peltz prefers to think of himself as a 'constructivist investor,' though he is known to pepper management with 'idea' phone calls and emails at late hours and on weekends.
• BofA's TARP exit hits snag. Sources say Bank of America's (BAC) plans to repay its TARP loans have fallen into question due to a dispute over how much more capital it needs to raise in order to exit government oversight. Having raised $40B in new equity since May, BofA thinks it's ready to return the government's $45B investment. But some officials say it should be required to raise more than the $40B determined by government stress tests, to give it the ability to deal with any potential economic relapses. Until it exits government assistance, BofA remains bound by pay czar Kenneth Feinberg's compensation limitations, which bank executives fear will hamper its abilities to recruit talent.
• NABE survey offers cheery outlook. U.S. companies expect to hire and invest more over the next six months, according to a survey released this morning by the National Association for Business Economics, and for the first time in a year more businesses reported a rise in capital spending over the previous quarter than a decline. All 78 panelists said business decisions are being made with expectations of positive GDP growth in 2010; of those, 73% see real GDP expanding 1-3%. The survey "provides new evidence that the U.S. recovery is underway," Chicago Fed's William Strauss said. "Improving credit conditions might be part of the explanation, with respondents indicating that credit remains tight but less so than earlier in the year."
• Capmark goes under. Not unexpectedly, troubled commercial real estate lender Capmark filed for bankruptcy protection on Sunday, wiping out the private-equity investments of KKR, Goldman Sachs (GS) and Five Mile Capital, which bought 75.4% of Capmark for $1.5B in cash and more than $7B in debt in 2006; GMAC owns the remainder. Capmark is negotiating the terms of the bankruptcy with its creditors, including Citigroup (C) and JPMorgan (JPM), but they have not yet reached an agreement over a prepackaged bankruptcy. U.S. banks hold more than $1T worth of mortgages backed by commercial property, on which analysts predict they could suffer losses in the neighborhood of $150B. Bad commercial property debts have played a pivotal role in the demise of many of the 106 banks that have failed so far this year.
• FDA OKs BioCryst's swine flu drug. The FDA approved emergency use of BioCryst Pharmaceuticals' (BCRX) experimental intravenous antiviral drug peramivir to treat severe cases of H1N1. "Based upon the totality of scientific evidence available, it is reasonable to believe that peramivir IV may be effective in certain patients," it said in a letter. The authorization is only for hospitalized patients who are not responding to either oral or inhaled antiviral treatments, or for whom nonintravenous drug delivery is not feasible.
• China: undertones of an exit. China's economic growth is likely to speed up this quarter, but the government will stay the course with its loose fiscal policy, senior officials said today. Still, analysts say the "unmistakable shift" in official statements signal Beijing is starting to think about how to unwind its pro-growth policies. China set itself a goal of 8% GDP growth this year, which officials say it's on track to fulfill.
• Lloyds eyes outsourcer CPA Global. Lloyds' (LYG) private-equity arm LDC is reportedly in talks to acquire legal outsourcing company CPA Global for £400M ($652M). Lloyds is stepping up its buyout activity, aiming to become a dominant player in Britain's dwindling private-equity deal market.
• Blackstone hopes for magic from Merlin. Looking to take advantage of buoyant equity markets, Blackstone (BX) is reportedly preparing to float its theme park operator Merlin Entertainments next year. Citigroup (C), Goldman Sachs (GS), Deutsche Bank (DB), UBS (UBS) and Nomura (NMR) are advising on what could be a $3.3B IPO. Merlin - which owns the London Eye, Madame Tussauds and the Sea Life centers - is the world's number-two park operator, after Disney (DIS).
• Madoff crony found dead. Jeffrey Picower, alleged to have extracted $7.2B from Madoff's Ponzi scheme, was found dead at the bottom of his Palm Beach pool Sunday. Madoff trustee Irving Picard alleges Picower and a group of longtime Madoff investors knew or should have known of the fraud, because they requested and received oversized returns of up to 950% on their investments.

Earnings: Mon. Before Open

• Alberto-Culver (ACV): FQ4 EPS of $0.33 beats by $0.01. Revenue of $358M (-7.2%) vs. $387M. (PR)
• Corning (GLW): Q3 EPS of $0.42 beats by $0.03. Revenue of $1.48B (-4.9%) vs. $1.42B. (PR)
• Lorillard (LO): Q3 EPS of $1.44 misses by $0.08. Revenue of $1.42B (+26.1%) vs. $1.32B. (PR)
• McGraw-Hill Companies (MHP): Q3 EPS of $1.07 beats by $0.02. Revenue of $1.88B (-8.4%) vs. $1.94B. Avg. daily volume for major exchange-traded derivatives fell 23.2% from a year ago. (PR)
• National-Oilwell Varco (NOV): Q3 EPS of $0.95 beats by $0.16. Revenue of $3.09B (-14.5%) vs. $2.9B. "While difficult credit market conditions have led to order rates below our expectations so far this year, we continue to pursue new rig opportunities aggressively, and seek and execute strategic internal growth and acquisition opportunities." (PR)
• RadioShack (RSH): Q3 EPS of $0.30 misses by $0.01. Revenue of $990M (-3.1%) vs. $961M. (PR)
• Tellabs (TLAB): Q3 EPS of $0.07 beats by $0.01. Revenue of $389M (-8.3%) vs. $394M. Shares +2.1% premarket. (PR)
• Verizon (VZ): Q3 EPS of $0.60 beats by $0.01. Revenue of $27.27B (+10.2%) in-line. Shares +2.4% premarket. (PR)
• Weingarten Realty Investors (WRI): Q3 FFO of $0.50 misses by $0.04. Revenue of $145M (-6.2%) vs. $143M. Sees full-year FFO of $2.08-2.16 vs. $2.26 consensus. Overall occupancy increased to 91.1% from 90.9% in Q2. "Conditions across most of the existing portfolio appear to be stabilizing as retailers are learning to adapt to current market conditions by managing inventories." (PR)

Today's Markets

Overseas markets were mostly higher Monday.

McGraw-Hill

Guidance

Analysts are looking for EPS of $1.05 on revenue of $1.94B. The consensus range is 99c-$1.13 for EPS, and revenue of $1.9B-$1.97B, according to First Call. The company lowered its FY09 guidance when it last reported earnings, expecting FY09 EPS of $2.20-$2.25, down from $2.20-$2.30, and the company anticipates coming in at low end of the range. Consensus for FY09 EPS is $2.24. McGraw-Hill also lowered its FY09 revenue estimates expecting growth down 5.5%-6.5% vs. prior view of a 4%-5% decline.

That was fast. Steve Adler's resignation from BusinessWeek was announced late Tuesday, and according to Keith Kelly it is likely to be followed by others. Kelly makes it seem as if the staff is in chaos, with one other top editor likely to go and the status of another unclear.

Bloomberg has a reputation for being no-nonsense in such matters--in contrast to McGraw-Hill (MHP), which kept the magazine's top masthead in stasis even as it drowned in red ink. Still, I was expecting a bit more of a transition period.

Most companies use debt for a variety of reasons in their operations. It could be either short term or long-term obligations. If there’s anything the 2007-2009 financial crisis has taught us, it is that excessively leveraged companies could easily blow up after a chain of negative events. Thus it pays to know what the debt situation for a particular company you are investing in actually is.

Some investors typically focus on debt to total assets to gain a perspective on the amount of the leverage the company has. While this method is widely accepted by some investors, I believe that it has some shortcomings, which might prevent investors from seeing the bigger picture. Most importantly comparing debt to total assets does not tell whether a company could service its debt obligations or not.

Bloomberg L.P. officially became the buyer of BusinessWeek today, as expected. Here's a memo to the BW staff by the soon-to-be-former owner, and here's a Bloomberg press release.

A few things are left unclear in the official pronouncements, and they're not minor:

From the WSJ:

Not such a good week!

Last week was FANTASTIC. We had 28 winning trades out of 36 with an average gain of 42% on the winners and an average loss of 12% on the losers - now THAT’S A GOOD WEEK. We were stopped out of most of our bearish trades on Monday but we took a lot of new ones, which I’ll get into later... Of course, since we are rangish and play both ends, the good news is we still had our "losers" and puts that we sold on long positions. Those turned into huge winners in just 5 days:

Dun & Bradstreet (DNB) is a provider of business information with a history dating back over 165 years. Today's company has 3 business segments. Risk Management, driving about 64% of sales, provides reports and other information products that allow companies to determine creditworthiness of potential customers. This unit may best be thought of as a Moody's (MCO) or S&P (MHP) rating agency for private companies... In fact Moody's was spun off from the "old" Dun & Bradstreet in 2000.

The second business unit is Supply, Sales, and Marketing (28% of sales), which provides information to help customers identify market segments, profile potential customers, build mailing lists, and evaluate current and potential suppliers. The third and final segment is Internet Solutions, consisting mainly of Hoover's, which has basic information on thousands of public and private companies, and AllBusiness.com, a resource and advice portal for business managers.

By Hao Jin

One of the most popular ways for investors to select stocks is to focus on companies with long track records of increasing dividends. On Feb 27, 2009, General Electric (GE), once the most prominent dividend aristocrat, cut its dividend 68%, the first time since 1938.