Tag Archive | "Stocks"

Warren Buffett Is Buying These Stocks, Should You?

No one person’s commentary about the stock market commands quite as much attention as that of Warren Buffett. Of course, the “Oracle of Omaha” has certainly earned that level of respect, amassing billions of dollars over decades of meticulous investing. But this also means that when Buffett’s Berkshire Hathaway BRK.B reports its latest holdings, investors often move quickly to copy its recent moves.

Berkshire filed its 13F for the fourth quarter on Wednesday, providing the would-be Buffetts of the world with an update on the conglomerate’s latest adjustments and giving Wall Street the closest thing to a look inside the mind of the billionaire investor that it could possibly have.

Berkshire Hathaway’s U.S. long stock portfolio holds positions in 45 individual stocks, with the five-largest of those positions accounting for roughly 62% of its total value. Some of the company’s larger stakes include Wells Fargo WFC, Bank of American BAC, and Kraft Heinz KHC.

During the fourth quarter, the portfolio’s value increased about 8%, reaching a whopping $191 billion on the back of one major new addition and several position increases. Should you be following in Buffett’s footsteps by buying the same stocks? Let’s take a closer look.

Apple Inc. AAPL

Berkshire Hathaway increased its stake in Apple by about 23% during the quarter. The technology behemoth is now the portfolio’s largest holding at 14.63% of its total value. Berkshire first purchased AAPL in Jan. 2016, and when asked to explain the move at the time, Buffet responded by simply saying, “Because I liked it.”

Apple is currently holding a Zacks Rank #3 (Hold) and has been hammered by the recent market sell-off, which occurred just days after the company reported disappointing iPhone sales during the holiday quarter. Nevertheless, the stock is sporting a “B” grade for Value in our Style Scores system, and the fact that it presents such a rare value opportunity in the tech sector probably explains Buffett’s position.

Shares of Apple are trading at just 15x forward earnings, coming in slightly below the market-wide average. Meanwhile, the stock has a PEG of 1.26, so investors are getting a decent price for its growth aspirations as well. Apple’s P/S of 3.55 is a bit stretched, but the company remains a cash cow and is generating more than $11.30 in cash per share right now, significantly outpacing its industry peers.

Apple remains a strong buy-and-hold option for investors focusing on financial security and value. The firm’s dominant grip on the consumer tech industry might be slipping a bit, but Apple should remain a titan for years to come.

Bank of New York Mellon Corporation BK

Buffett and Berkshire took the bulk of their position in BNY Mellon during the second quarter of 2012. Since then, the size of the holding has fluctuated a bit, including several small decreases in 2015 and two 50% increases in 2017. The conglomerate also upped its stake in BK by about 20% during the fourth quarter, buying a number of shares between $51 and $55.

BNY Mellon has performed basically in line with the market over the past year, moving a respectable 18% higher over that time. The stock is currently sporting a Zacks Rank #3 (Hold) and has an overall VGM grade of “D.”

Investors should not expect explosive earnings growth or consistent market-beating returns from BNY Mellon. But the stock is probably a decent option for investors looking to diversify their financial holdings with a sound asset servicing company.

Teva Pharmaceutical Industries TEVA

Berkshire surprised many investors with the revelation that it had taken a new stake in this struggling drugmaker during the fourth quarter. Its position is relatively small and accounts for just 0.9% of the portfolio’s value, but it led many on Wall Street to question whether Buffett could see something in the stock that others were missing.

The generic drug giant has faced significant headwinds lately, due in large part to lower U.S. generic drug prices and increased competition—causing management to take out massive loans to protect from its shrinking profit margins.

Berkshire could be well positioned to benefit from the company’s planned turnaround, but investors should note that Teva is currently holding a Zacks Rank #4 (Sell). Nevertheless, the Zacks Rank is only a one-to-three month indicator, and we know that Buffett likes to buy and hold his stocks well beyond that. Teva might be risky right now, but if the company can solve its debt crisis, it could bounce back over the next few years.

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3 Stocks to Buy and Hold for Decades

3 Stocks to Buy and Hold for Decades

It can take a long time to research companies and figure out which investment is right for you. And even after you’ve finished the hard part of picking a stock, there’s still no guarantee that its share price will go up, of course.

But you can increase your chances of finding solid long-term investments — think decades, not months — by looking for companies that have the right management, strong financials, and the potential to move into new markets. To help you find those companies, we asked three Motley Fool investors for stocks that they think you can buy and hold for decades, and they came back with Prudential Financial (NYSE: PRU), 3M (NYSE: MMM), and Microsoft Corporation (NASDAQ: MSFT). Here’s why.

A company so solid it uses an actual rock as its corporate symbol

Chuck Saletta (Prudential Financial): For a company’s stock to be worth holding for decades, it needs to be a solid enough business that investors have good reason to believe it will last at least that long. The term “rock-solid” comes to mind, which helps make insurance giant Prudential Financial worth considering. Prudential Financial cares so much about its underlying financial strength that it uses the Rock of Gibraltar as its corporate symbol.

It backs up that symbolism with real strength, too. Its balance sheet sports a debt-to-equity ratio below 0.7 and a current ratio above 1, both of which indicate a conservative approach to managing its own finances. And while past performance isn’t a guarantee of future results, Prudential Financial has over 140 years of insurance and financial operations under its belt. That gives credibility to its claims of financial strength, as those 140 years include some pretty tumultuous economic times.

Perhaps even better for investors looking to initiate a position, Prudential Financial trades at what looks like a reasonable valuation. Its shares can be purchased for around 10 times its expected forward earnings and just above its book value. Although insurance profits can swing wildly from year to year if claims exceed expectations, over the next five or so years, Prudential Financial is expected to be able to increase its earnings by just over 11% annualized.

As a rock-solid company at a reasonable price and with well over a century of proven staying power, Prudential Financial may very well be worth buying today to hold for decades.

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How investors can still fatten their portfolios with these tax-friendly stocks

How investors can still fatten their portfolios with these tax-friendly stocks

Some are calling it a political “earthquake” after Roy Moore failed to ride his trusty steed to victory in Alabama.

A victory for Doug Jones — the first Democrat to hold that seat in 25 years — puts his party within two seats of a Senate majority, which could be tripuscky for POTUS and Republicans in the future.

But no signs of panic thus far, with both stock futures and the dollar largely holding up. That’s probably because the Republicans are likely to push through the tax bill by next week, before Jones is sworn in. And there’s some distraction en route, given the Federal Reserve decision and likely rate hike today, with all ears perked for signals on the pace of rate increases in 2018.

While U.S. equities have been riding high since Trump’s election on optimism over what tax reform will do for stocks, our call of the day from Stifel says that legislation is a “present yet to be unwrapped” for several restaurant stocks.

Chris O’Cull, from Stifel’s consumer and equity team, notes that every restaurant in their coverage will benefit from a cut in the federal corporate tax rate to 20% from 35% — and many of them seem willing to invest that windfall in the business. (Refresher: What every S&P 500 company actually pays in taxes)

“Based on conversations with several management teams and operators, we expect a substantial portion of any tax savings to be reinvested to improve value propositions,” he says.

For one, casual dining chains that have been struggling to draw traffic may use those savings for remodels, service enhancements and upgrades to food quality, O’Cull suggests.

What else could restaurant companies do? Some might cut back on financial leverage, repurchase stock and/or increase dividends. Stifel says look at Darden DRI, +1.67% , McDonald’s MCD, +0.53% and Texas Roadhouse TXRH, +0.91% for companies that could deliver dividends.

Here’s Stifel’s chart that shows how much upside some stocks stand to get from tax reforms:

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7 Dividend Stocks Increasing Payouts – KSU NDSN DDS CBU FAF PF BMI

The S&P 500 Index dipped down at the end of the week as investors digested increasing political tensions and a terrorist attack in Barcelona. However, a handful of dividend stocks continued powering through and issued a vote of confidence in their businesses in the form of dividend raises.

Seven notable dividend stocks increased their payouts over the last week, including two financial services firms, two industrial products manufacturers, a large railroad business and a department store.

Here are seven dividend stocks increasing payouts.

Kansas City Southern (NYSE:KSU) grew its quarterly dividend from 33 cents per share to 36 cents, representing a raise of 9%. The railway company will pay out its higher dividends to shareholders of record as of Sept. 11 on Oct. 4. KSU shares trade ex-dividend on Sept. 8.
KSU Dividend Yield: 1.36%

Nordson Corporation (NASDAQ:NDSN) increased its quarterly dividend by 11%, raising its payment to 30 cents per share from 27 cents. Shareholders of record as of Aug. 22 will receive their higher dividends on Sept. 5 from the adhesives dispenser manufacturer. NDSN shares will be ex-dividend on Aug. 18.
NDSN Dividend Yield: 0.96%

Badger Meter, Inc. (NYSE:BMI) increased its quarterly dividend by 13% to 13 cents per share from 11.5 cents. Shareholders of record as of Aug. 31 will receive dividends from the manufacturer of flow measurement and control products on Sept. 15. The company’s shares will go ex-dividend on Aug. 29.

BMI Dividend Yield: 1.18%

Pinnacle Foods Inc (NYSE:PF) increased its quarterly dividend by 14%, raising its payment to 32.5 cents per share from 28.5 cents. Shareholders of record as of Aug. 29 will receive dividends from the branded food products company on Oct. 9. The company’s shares will go ex-dividend on Aug. 25.
PF Dividend Yield: 2.17%

First American Financial Corp (NYSE:FAF) announced a 12% increase to its quarterly dividend, raising it from 34 cents per share to 38 cents. Dividends will be paid from the title insurance provider on Sept. 15 to shareholders of record as of Sept. 8. FAF shares become ex-dividend on Sept. 7.
FAF Dividend Yield: 3.15%

Community Bank Systems, Inc. (NYSE:CBU) announced a 6% increase to its quarterly dividend, raising it from 32 cents per share to 34 cents. Dividends will be paid from the banking and financial services firm on Oct. 10 to shareholders of record as of Sept. 15. CBU shares become ex-dividend on Sept. 14.
CBU Dividend Yield: 2.63%

Dillard’s, Inc. (NYSE:DDS) raised its quarterly dividend by 43%, increasing it from 7 cents per share to 10 cents. The department store will pay its higher dividend to shareholders of record as of Sept. 29 on Oct. 30. DDS shares will trade ex-dividend on Sept. 28.
DDS Dividend Yield: 0.51%

As of this writing, Brian Bollinger did not hold a position in any of the aforementioned securities.

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How To Invest In Stocks

How to Invest in Stocks – Stock Investing 101 – TheStreet

Stocks are an equity investment that represents part ownership in a corporation and entitles you to part of that corporation’s earnings and assets.

Common stock gives shareholders voting rights but no guarantee of dividend payments. Preferred stocks provides no voting rights but usually guarantees a dividend payment.
In the past, shareholders received a paper stock certificate — called a security — verifying the number of shares they owned. Today, share ownership is usually recorded electronically, and the shares are held in street name by your brokerage firm.

Investing in stocks can be tricky business. In fact, it’s best to treat all of your investment pursuits as a business. Heck, that’s what Benjamin Graham (Warren Buffett’s stock market mentor) recommended.
Before you buy your first stock, you should master the basics of stock investing. This won’t make you a great investor overnight, but only when you understand the fundamentals of investing can you learn how to invest in stocks with confidence.

Source: https://www.thestreet.com


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