Commentary | Value Investing News

Commentary

Investors Should Look For Companies That Have A Pseudo-Monolopy

Rating: 
No votes yet
  • During his recent interview with Tobias, Eddy Elfenbein, who owns the popular investing blog Crossing Wall Street Blog, discusses why investors should look for companies that have a pseudo-monopoly.
  • Eddy Elfenbein: Because they don’t have the legal pressure of it.
  • I mean, I’ve liked Disney, but it’s a new stock I added at the beginning of this year.

Joel Greenblatt: Investors Should Search For Companies That Achieve A High Return On Capital

Rating: 
No votes yet
  • In short, companies that achieve a high return on capital are likely to have a special advantage of some kind.
  • Businesses that don’t have anything special going for them (such as new or better products, well-known brand names, or strong competitive positions) are likely to earn only average or below-average returns on capital.
  • They’ll keep competing until returns on capital are driven down to average levels.

Genworth MI – sold to Brookfield Business Partners

Rating: 
No votes yet
  • The winner of the Genworth MI auction (presumably there were multiple interested partners) was Brookfield Business Partners LP (TSX: BBU.UN) at CAD$48.86 per share, for 57% of Genworth MI shares.
  • Brookfield Asset Management owns about 80% of Brookfield Business Partners.
  • Brookfield Business Partners may in the future consider the appropriateness of such an offer after discussion with Genworth Canada’s shareholders and other stakeholders.

Country Risk: A Mid-year 2019 Update

Rating: 
No votes yet
  • The Sources of Country Risk When companies invest outside their domestic markets, the most immediate risk that they are exposed to is exchange rate risk, since revenues, profits and cash flows are affected by changing exchange rates.
  • Political Risk: If the last few years have taught us a lesson, it is that politics can affect economic and market risk, not just in emerging markets, but also in developed ones.

Finding High Quality Stocks Starts With The World’s Simplest Valuation Measure

Rating: 
No votes yet
  • Maybe we’ll have a higher mean, but we realize that in a year, so much of your profit has not been through profits but through margin expansion, and you just have to understand that that is not lasting, and that will come back and will bite you.
  • So a lot of those valuation things will fade over time, and you really are investing in the underlying strength of the company.

Warren Buffett: The Investor’s Misery Index

Rating: 
No votes yet
  • Here’s a great excerpt from Warren Buffett’s 1979 Berkshire Hathaway Shareholder Letter in which he illustrates the impact that inflation can have on an investor’s returns, using what he calls – “the investor’s misery index”, saying:
  • That combination – the inflation rate plus the percentage of capital that must be paid by the owner to transfer into his own pocket the annual earnings achieved by the business (i.e., ordinary income tax on dividends and capital gains tax on retained earnings) – can be thought of as an “investor’s misery index”.

Another Osram update

Rating: 
No votes yet
  • I do not know these AMS guys at all they had already pulled their offer once the AMS offer is clearly more hostile, Osram management might oppose it as they might not get the same deal that the PEs offered them.
  • Yes, there is clearly a small chance that the PEs will increase their bid but overall this new situation is too hard to handicap for me at the moment.
  • If the AMS deal would fall away again, I don’t think that the PEs woul reach the 70% now with the 35 EUR offer and I am not sure if they would increase their bid in this scenario.

"What is an Oddball Stock?" with Nate Tobik on SNN Network

Rating: 
No votes yet
  • Nate had an appearance on SNN Network talking about our recent post, " What is an Oddball Stock? "

"What is an Oddball Stock?" with Nate Tobik on SNN Network

Rating: 
2
Average: 2 (1 vote)

How To Do A Bank Valuation With Old School Value

Rating: 
No votes yet
  • Because most of their assets are tradable financial assets, these book values are a fairly reasonable estimate of their market value.
  • To screen for attractive banks where it would make sense to think more thoroughly about the valuation, here are filters I’d recommend using:
  • Note that this is using a discount rate of 7.5%, which is probably a little higher than JPM’s cost of equity.

7 Dividend Stocks Building Future Yield

Rating: 
No votes yet

Driven by computers that cost more than the average person will earn in their lifetime the investment markets move at light speed. To keep pace hedge funds, mutual funds, institutional investors and multi-billion dollar money managers spend large sums of money on high-tech tools to give them an edge. So, what chance does a small individual investor have? Not much of a chance if you let the Wall Street players define the rules.

A Pair of Cheap, Well-Run California Banks

Rating: 
No votes yet
  • With shares trading in the high $180s, River City Bank has a trailing P/E ratio of just over 10.
  • River City has a long history of successfully managing these risks, and I expect the bank’s strong balance sheet and high lending standards will help them manage whatever the next down cycle brings.
  • Rather than passing shares down to his heirs at his death, Exchange Bank co-founder Frank Doyle established a trust that would own 50.44% of the bank’s shares for the benefit of the community.

Old School Value Nugget Fest (August 8th Edition)

Rating: 
No votes yet
  • The markets continue to be volatile and policy unpredictable.
  • Though there are rational explanations for value to trade at a greater discount today than it does usually, we believe that cheap stocks are somewhat undervalued and therefore poised to deliver decent excess returns going forward.”
  • It’s ignorant to say this is noise, but it’s naive to think you can find the signal.”

(Ep.23) The Acquirers Podcast: Eddy Elfenbein – Buy List, Fundamentally Sound, High Earnings Quality

Rating: 
No votes yet
  • – How To Construct A Buy List
    – Finding High Quality Stocks Starts With The World’s Simplest Valuation Measure
    – There’s Mean Reversion Among Multiples
    – You May Not Think You’re A Factor Investor, But You Are
    – The Single Best Metric In Investing Is…
    – Why Return On Equity Is So Important
    – How Can Investors Spot Warning Signs Of Fraud
    – It’s The Second Mouse That Gets The Cheese – Embryonic Industries
    – Investors Should Look For Companies That Have A Pseudo-Monolopy

Safal Niveshak, Uncopyrighted

Rating: 
No votes yet
  • He didn’t “hack” the network to secure those downloads.
  • My Ode to Aaron Swartz I did not hear much about Aaron Swartz until I heard about his death in 2013.
  • By uncopyrighting my free content and ideas, I am trying to do just that – remove all barriers to share my knowledge and ideas freely with the world.

Pages

Subscribe to RSS - Commentary