Someone who reads my articles asked me this question: I've read a few of your articles, especially on those about Warren Buffett�� investment style�� would be grateful for your help in clarifying a question about Warren Buffett�� purchase of Coca-Cola (KO).
Throughout 1988 and 1998 Warren Buffett acquired more than $1 billion of KO stock. At the time Wall Street deduced Buffett paid way too much for the earnings indicating a high P/E.
Some investors believe Warren Buffett used some sort of discounted cash flow analysis to value his purchase in 1988 and 1989, which he projected out ten years. However from what I understand you may not be convinced that Warren Buffett uses discounted cash flow analysis in his valuation of businesses. I would be very interested to know how you think Warren Buffett valued his purchase.
Kind Regards,
Caesar
As best I can, I��l let Warren Buffett answer the question himself. Let�� start with what Warren Buffett said back in the 1990s at Notre Dame:
Top Value Companies To Watch In Right Now: BanColombia S.A. (CIB)
Bancolombia S.A., a full service financial institution, provides various banking products and services to individual and corporate customers in Colombia, as well as in Panama, El Salvador, Puerto Rico, the Cayman Islands, Peru, Brazil, the United States, and Spain. The company offers savings and checking accounts, fixed term deposits, and investment products; and trade financing, loans funded by domestic development banks, working capital loans, credit cards, personal loans, vehicle loans, payroll loans, and overdrafts. It also provides mortgage banking, factoring, treasury, cash management, foreign currency, and bancassurance and insurance; and asset management and trust services that comprise money market accounts, mutual and pension funds, private equity funds, payment trust, custody services, and corporate trust. In addition, the company offers brokerage, investment advisory, and private banking services, including selling and distributing equities, futures, foreign cu rrencies, fixed income securities, mutual funds, and structured products; and investment banking services, including advising and assisting companies from various economic sectors in project finance, capital markets, capital investments, mergers and acquisitions, restructurings, and corporate lending. Further, it provides financial and operational leases, including cross-border and international leasing services; and pension plan administration services. The company offers its services through a traditional branch network, and sales and customer representatives, as well as through mobile branches, non-banking correspondents, an ATM network, online and computer banking, telephone and mobile phone banking, and electronic funds transfer at point of sale (PACs). As of September 30, 2012, it had 978 branches and 3,703 ATMs. Bancolombia S.A. was founded in 1945 and is headquartered in Medellin, Colombia.
Advisors' Opinion:- [By Lisa Levin]
Bancolombia SA (NYSE: CIB) shares touched a new 52-week low of $47.94. Bancolombia's trailing-twelve-month ROA is 1.45%.
Posted-In: 52-Week LowsNews Movers & Shakers Intraday Update Markets
Hot Stocks For 2014: Steelcase Inc.(SCS)
Steelcase Inc. designs, manufactures, and distributes furniture systems and seating products, user-centered technologies, and interior architectural products primarily in North America, Europe, and Asia. Its furniture systems portfolio consists of panel-based and freestanding furniture systems; and complementary products, such as storage, tables, and ergonomic worktools. The company also provides seating products, including ergonomic chairs; seating for collaborative or casual settings; and specialty seating for specific markets comprising healthcare and education. In addition, its interior architectural products include full and partial height walls and doors. Further, the company offers workplace strategy consulting, lease origination, and furniture and asset management services. Additionally, it designs, manufactures, and sells visual communication products, such as static and interactive electronic whiteboards to primary and secondary education markets, as well as manu factures and sells steel and ceramic surfaces to third-party fabricators for use in the manufacture of static whiteboards. It also designs and sells surface materials comprising textiles, wall coverings, shades, screens, and surface imagings primarily to architects and designers for use in business, residential, healthcare, and hospitality applications. It sells its products to corporate, government, healthcare, education, and retail customers through the Steelcase, Turnstone, Details, and Nurture brands; and Coalesse and Designtex brands. The company markets its products and services through a network of independent and company-owned dealers, as well as directly to end-use customers. The company was founded in 1912 and is headquartered in Grand Rapids, Michigan.
Advisors' Opinion:- [By John Kell var popups = dojo.query(".socialByline .popC"); popups.forEach(func]
Steelcase Inc.(SCS) swung to a fiscal fourth-quarter profit amid growth in the company’s Americas business. The year-earlier period included big asset write-downs and restructuring-related charges. Shares climbed 9.5% to $15.96 premarket.
- [By Ben Levisohn]
Shares of HNI Corp. have gained 4.9% to $35.17 at 1:45 p.m., while Steelcase (SCS) has risen 0.8% to $16.93, Knoll (KNL) has advanced 2.5% to $18.74 and Herman Miller (MLHR) has ticked up 0.3% to $30.57.
- [By John Udovich]
Small cap office furniture stock Steelcase Inc (NYSE: SCS) jumped 11.66% after beating earnings expectations, meaning it might be time to take a closer look at the stock along with potential office or commercial furniture stock peers like�HNI Corp (NYSE: HNI), Knoll Inc (NYSE: KNL) and Virco Mfg. Corporation (NASDAQ: VIRC). After all, the performance of any company selling office or commercial furniture would tend to give some insights into the office or employment markets.
Hot Stocks For 2014: Nordstrom Inc.(JWN)
Nordstrom, Inc., a fashion specialty retailer, offers apparel, shoes, cosmetics, and accessories for women, men, and children in the United States. It offers a selection of brand name and private label merchandise. The company sells its products through various channels, including Nordstrom full-line stores, off-price Nordstrom Rack stores, Jeffrey? boutiques, treasure & bond, and Last Chance clearance stores; and its online store, nordstrom.com, as well as through catalog. Nordstrom also provides a private label card, two Nordstrom VISA credit cards, and a debit card for Nordstrom purchases. The company?s credit and debit cards feature a shopping-based loyalty program. As of September 30, 2011, it operated 222 stores, including 117 full-line stores, 101 Nordstrom Racks, 2 Jeffrey boutiques, 1 treasure & bond store, and 1 clearance store in 30 states. The company was founded in 1901 and is based in Seattle, Washington.
Advisors' Opinion:- [By Alex Planes]
This graph represents the "purchase consideration" of Men's Wearhouse against some of its largest suit-selling competitors, listed as Jos. A. Bank (NASDAQ: JOSB ) , Macy's (NYSE: M ) , and Nordstrom (NYSE: JWN ) , among others. The industry average has been pretty steady, but Men's Wearhouse appears to be wearing thin among millennials (and among male consumers on the bubble between the millennial generation and Generation X). If that's so, then why did Men's Wearhouse report a nice spike in profits in its latest report? Well, older consumers still like the way they look in a Zimmer-promoted suit:
- [By Jonas Elmerraji]
First up is department store retailer Nordstrom (JWN). By and large, Nordstrom has failed to live up to the broad market's impressive rally this year. While the S&P is up more than 25% since the calendar flipped over to January, Nordstrom has only managed to make half that. But if the price action holds, JWN could be in store for a big move higher.
Nordstrom is currently forming a cup-and-handle pattern, a classic bullish price setup that's formed by a cup-shaped rounding bottom and a short-duration channel down. So even though JWN has been trending lower for the last two months, the longer-term prognosis is higher ground. The buy signal comes on a move through the pattern's price ceiling at $63.
The 50-day moving average has been a pretty good proxy for support in the past, so this week's test of that level could be the start of the move back up to $63 resistance. After the breakout, it's also the level when I'd recommend keeping a protective stop.
- [By Peter Graham]
The Q1 2014 earnings report for troubled J.C. Penney Company, Inc (NYSE: JCP), a peer of other department store stocks like Kohl's Corporation (NYSE: KSS), The Bon-Ton Stores, Inc (NASDAQ: BONT) and Nordstrom, Inc (NYSE: JWN), is scheduled for after the market closes on Thursday. Aside from the J.C. Penney Company's earnings report, it should be said that�Kohl's Corporation will report Q1 2014 when the market opens on Thursday; Nordstrom will report earnings after the market closes on Thursday; and The Bon-Ton Stores will report Q1 2014 earnings on Thursday, May 22nd before the market opens. However, all eyes will be on the J.C. Penney Company earnings report to see if there are any signs the company has turned itself around from the ill-fated�leadership of CEO Ron Johnson���who ironically was also trying to turn things around��/p>
Hot Stocks For 2014: Market Vectors Coal ETF (KOL)
Market Vectors-Coal ETF�� (the Fund) investment objective is to replicate as closely as possible, before fees and expenses, the price and yield performance of the Stowe Coal Index (the Coal Index). Van Eck Associates Corporation is the investment adviser to The Fund.
As of December 31, 2007, the Stowe Coal Index consists of the stocks of 60 publicly traded companies. These companies are engaged in the mining and/or transportation of coal, the manufacture of coal mining equipment and the production of clean coal.
Advisors' Opinion:- [By Peter Krauth]
The best way to gain exposure to the potential coal bull is through the Market Vectors Coal ETF (NYSE Arca: KOL). This fund invests in companies that generate at least 50% of their revenues from coal production, mining, mining equipment, transportation, or storage.
- [By Jonathan Yates]
Even though China is not posting double-digit economic growth like it did before, shipping (NYSE: SEA), natural gas (NYSE: UNG) and coal (NYSE: KOL) should all fear the way the leadership is positioning the country.
Hot Stocks For 2014: Banner Corporation(BANR)
Banner Corporation operates as the holding company for Banner Bank and Islanders Bank that provide commercial banking and financial products and services to individuals, businesses, and public sector entities. It generates various deposit instruments, including demand checking accounts, negotiable order of withdrawal accounts, money market deposit accounts, regular savings accounts, certificates of deposit, cash management services, and retirement savings plans. The company also originates commercial business and commercial real estate loans, agricultural business loans, construction and land development loans, one to four-family residential loans, and consumer loans. In addition, it engages in mortgage banking operations primarily through the origination and sale of one to four-family residential loans. As of December 31, 2010, Banner Bank operated 86 branch offices and 7 loan production offices in Washington, Oregon, and Idaho; and Islanders Bank conducted business from 3 locations in San Juan County, Washington. The company was founded in 1890 and is based in Walla Walla, Washington.
Advisors' Opinion:- [By Marc Bastow]
Bank holding company Banner (BANR) raised its quarterly dividend 20% to 18 cents per share, payable April 15 to shareholders or record as of April 7.
BANR Dividend Yield: 1.75% - [By Lauren Pollock]
Bank-holding company Banner Corp.(BANR) on Tuesday said it had agreed to buy Home Federal Bancorp Inc.(HFBL) (HOME) for $197 million in cash and stock. The deal, expected to close in the first quarter of 2014, will result in a combined company with about $5.2 billion in assets, making it the fourth-largest bank in the Pacific Northwest by assets, the companies said.
Hot Stocks For 2014: Omnicom Group Inc.(OMC)
Omnicom Group Inc., together with its subsidiaries, provides advertising, marketing, and corporate communications services. It offers services in traditional media advertising, customer relationship management, public relations, and specialty communications groups. The company?s services include advertising, brand consultancy, corporate social responsibility consulting, crisis communications, custom publishing, database management, digital and interactive marketing, direct marketing, directory advertising, entertainment marketing, environmental design, experiential marketing, field marketing, financial/corporate business-to-business advertising, graphic arts, healthcare communications, and instore design. Omnicom Group also offers investor relations, marketing research, media planning and buying, mobile marketing services, multi-cultural marketing, non-profit marketing, organizational communications, package design, product placement, promotional marketing, public affairs, public relations, recruitment communications, reputation consulting, retail marketing, search engine marketing, and sports and event marketing services. It offers its services in the Americas, Europe, the Middle East, Africa, Asia, and Australia. The company was founded in 1944 and is based in New York, New York.
Advisors' Opinion:- [By Sue Chang and Ben Eisen]
OMC: An announcement by European Union regulators cleared the way for advertising powerhouses Omnicom Group Inc. (OMC) �and rival Publicis Groupe SA (PUBGY) (PGPEF) � (FR:PUB) to merge. The combined firm is expected to be the world�� largest advertising agency. Shares of Omnicom Group were up 1.4%.
- [By Geoff Gannon]
I suppose I could lay out the same sorts of iffy arguments for stocks I��e bought. Omnicom (OMC) and IMS Health were bought during a stock market panic. And a panic can explain anything. Advertising was going to be weak for a couple years in a global recession. People thought this wasn�� the time to buy an advertising company. IMS Health was a healthcare company while healthcare reform was being discussed. Some Senators brought up things they didn�� like about IMS Health in regards to patient privacy. And one state actually passed legislation that could��e harmed IMS Health. But none of this seemed all that material to the stock. And it�� kind of hard to see how people would actually believe it was material to the company�� business. It�� not like they were debating the fees IMS Health could charge (the way credit card companies, banks, etc., were being discussed).
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