Value Investing News

BMC Software is an enterprise business software company focusing on IT management products. Predictable and recurring revenues, wide operating margins, robust cash flow, high switching costs, and favorable growth prospects for the industry make this an attractive business and the stock is selling near a 5-year low valuation.

Investing in dividend growth stocks is a long-term proposition. One of the beauties of following a dividend growth strategy is that you don't have to watch your portfolio or the market on a daily basis. For the most part, daily, monthly and yearly movements are just noise in the system.

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Enterprise software is a great business, with recurring revenues, high switching costs, and sky-high operating and free cash flow margins. With 4 major providers now being screened by Magic Formula® Investing, which one is the best to buy?

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Before the internet and even before computers, critical financial information was printed daily in newspapers. Though many newspaper still print this information, most people find it easier (and faster) to get information on their stocks from financial websites. So back when financial information was a tedious and manual process what was considered relevant enough to warrant inclusion?

This short article is an update of stocks that we follow in our “Margin of Safety Portfolio.” These are stocks identified to have a durable competitive advantage and, based upon our intrinsic valuation models and fundamental analysis, are trading at a substantial discount to intrinsic value.

Current trends and events
■New strategic partnerships at Microsoft;
■HP’s webOS will go open source;

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32 best dividend stocks selected for 2012 based on valuation and earnings.

All income investors love a stock with a good yield. The smart ones look for dividends that are sustainable and likely to grow. The question is, 'In an uncertain world, how do you determine which dividends are sustainable and likely to grow?' Of coarse, there is no way to know with exact certainty which dividends are sustainable, but there are tell-tale signs that often foretell the future.

There is perceived safety in size. Giant corporations aren't randomly grown. Instead, they are carefully built through superior management and foresight. Often these are more mature companies that also offer stability and predictability, usually at the expense of dynamic growth. These are your mega-cap stocks.

As in the above example, where a few readers want to identify both Sirius and Bank of America together as being “cheap," I have come to realize there are various categories of that definition. One of the traits that fuse and unify all investors together in the market (or in the grocery store) is the need to find a bargain or a cheap stock to buy.

As the world continues to shrink through technology advancements, and all of the products that consumers demand become commoditized, a company’s brand can be a valuable competitive advantage. It’s no coincidence then that the four top brands in the world, as measured by their brand value, are also among the largest in terms of capitalization and revenue.

Value Investors often avoid the technology sector due to the rapid pace of technological change, and the accompanying disruptive nature of new technologies that can erode a company’s competitive advantage. On the subject of technology stocks, Buffett commented at the 1998 Berkshire Hathaway (BRK.A) Annual Shareholders Meeting:

IBM global capabilities include information technology services, software, computer hardware equipment, fundamental research, and related financing. Linked here is a detailed analysis and commentary.

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Once again it is time for a goals/progress update. I am pleased to report that annualized dividend income increased in October, extending the streak to 16 consecutive months of increases after June 2010's decline. Since I began publicly tracking annualized dividend income in November 2007, it has increased in 45 of the last 47 months.

Who wouldn't like to earn a safe 15% on their original investment? Normally double-digit returns are the fodder of con artists or associated with extraordinarily risky investments. In either of these cases, the person is usually left holding despair in one hand and an empty wallet in the other. However, I have discovered that you can actually enjoy high yields with minimal risk...

Microsoft, the world's largest software company, develops PC software, including the Windows operating system and the Office application suite. Linked here is a detailed analysis and commentary.