It's no secret that Warren Buffett has had tremendous success investing in large, well-known companies, many of which appear in the Dow Jones Industrial Average (DJINDICES: ^DJI ) . With earnings season upon us and the Dow in focus, here are Buffett's three largest Dow positions, according to Berkshire Hathaway's (NYSE: BRK-B ) latest 13-F filing. Keep in mind that Berkshire does not have to disclose all its stock holdings, so if you're looking for Buffett's entire portfolio, you're out of luck. And while this article should not be taken as a buy list, it is always a useful exercise to consider Buffett's investment decisions.
American Express (NYSE: AXP )
AmEx cardholders have excellent credit, which lowers default risk and raises average spending.�The model is similar to Buffett's auto insurance company, GEICO, which targets responsible drivers in order to reduce claims. Way back in 1964, shares of American Express plummeted after the company vouched for a vegetable oil company that took out large loans by falsifying collateral. American Express lost millions, and investors panicked, but Buffett considered it only a temporary setback. Ever greedy when others are fearful, Buffett recognized the long-term prospects of the company and started buying shares.
Top Gas Stocks To Watch Right Now: Groundstar Resources Ltd (GSA)
Groundstar Resources Limited (Groundstar) is a development-stage oil and gas company. The Company is engaged in exploration, development and production opportunities in international areas of interest. Through its subsidiaries, the Company�� primary operations are related to its interests in a production sharing contract in Kurdistan (Iraq), concession agreements in Egypt and a petroleum prospecting license in Guyana. Advisors' Opinion:- [By Damian Illia]
The company�� revenues come from the fees charged for operating different domain names. Most domain names��fees are charged as per agreement terms with ICANN; however, fees received for operating the .gov registry are based on the terms of agreement with the U.S. General Services Administration (GSA). As of September 2013, revenues of $125.9 million came from active domain names ending with .com and .net. Even though the company has presence all over the globe, the U.S. contributes 64.8% of revenues, while Europe, the Middle East and Africa (EMEA) contribute 15.5%, Australia, China, India and other Asia Pacific countries (APAC), 15.0%, and other countries such as Canada or Latin American countries, contribute 4.7%. Competition is increasing, especially with Latin script ccTLD registries and IDN ccTLD registries, as well as with other name service providers such as Neustar Inc. (NSR) or ARI Registry Services, and search engine providers such as Google Inc. (GOOG) Microsoft, Corp. (MSFT).
5 Best Warren Buffett Stocks To Buy Right Now: Family Dollar Stores Inc.(FDO)
Family Dollar Stores, Inc. operates a chain of self-service retail discount stores primarily for low and middle income consumers in the United States. The company offers consumables, including household chemicals, paper products, candy and snack products, health and beauty aids, hardware and automotive supplies, and pet food products and supplies; and home products, which comprise domestics, housewares, giftware products, and home decor products. It also provides apparel products and accessories consisting of men?s and women?s clothing products, boys? and girls? clothing products, infants? clothing products, shoes, and fashion accessories; and seasonal products and electronics, such as toys, stationery and school supplies, seasonal goods, and personal electronics. As of August 11, 2011, the company operated approximately 7,000 stores in rural and urban settings across 44 states. Family Dollar Stores, Inc. was founded in 1959 and is headquartered in Matthews, North Carolina .
Advisors' Opinion:- [By Ben Levisohn]
Family Dollar (FDO) became a must-have after Carl Icahn announced a 9.4% stake in the bargain retailer–and so did competitors like Dollar General (DG) and Dollar Tree (DLTR).
REUTERS Carl IcahnGuggenheim’s John Heinbockel and Steven Forbes explain why they’re bullish on Family Dollar:
Following Carl Icahn’s disclosure of a 9% stake in FDO, we reiterate our contrarian BUY, believing that significant shareholder value can be created in this well-positioned but underperforming and overcapitalized business. Our focus remains on a turnaround, not consolidation…
We would note that the 100 basis points plus of EBIT margin expansion we have built into our model represents the recovery of only 50% of the erosion seen since 2011 and would still leave a level of profitability well below that of both Dollar General (DG, BUY, $57.99) and Dollar Tree (DLTR, NC, $55.14). There are opportunities beyond what we have modeled to the degree that costs are better controlled and pricing is better managed.
The filing notes that the shares are ��ndervalued��and Icahn ��ees great long-term potential in the issuer�� (FDO��) industry��and that it ��ntends to seek to have conversations with senior management and the BOD.”��nything that further accelerates the pace of change is a positive.
Family Dollar, however, has adopted measures to keep Icahn at arm’s length following the filing.
Shares of Family Dollar have gained 14% to $68.78 at 3 p.m., while Dollar General has risen 7.5% to $62.32 and Dollar Tree has advanced 0.5% to $55.43.
5 Best Warren Buffett Stocks To Buy Right Now: Official Payments Holdings Inc (OPAY)
Official Payments Holdings, Inc., formerly Tier Technologies, Inc., incorporated in 1991, is a provider of biller direct electronic payment solutions, through its primary brand Official Payments. These solutions provide payment services via multiple channels, including the Internet, automated Interactive Voice Response (IVR), call center and point-of-sale (POS), environments. Its solutions include multiple enhanced payment services, including convenience fee payments, absorbed payments, payment reminder and automated payment scheduling. It also offers its clients a range of payment choices, including credit and debit cards, electronic checks, cash and money orders, and emerging payment methods to meet the needs of their customers. Its segments include Electronic Payment Solutions (EPS) and Wind-down operations.
The Company offers its clients a front-end platform designed for the biller direct market with a single source solution that simplifies the management of electronic payments. Its verticals include Federal, State and Local, Property Tax, Utility, Education and Others. During the fiscal year ended September 30, 2010 (fiscal 2010), it also provided services in one business area which is in the process of winding-down.
ELECTRONIC PAYMENT SOLUTIONS
The business consists of the Company�� biller direct solutions, which is called EPS. It offers services using several pricing options, such as transaction fee, convenience fee, flat fee, or client absorbed fee (fees paid directly by the client, in lieu of those charges being paid by the constituent using the service), which can be billed as a percentage fee, a fixed fee, or some combination of both. It provides services and solutions in several different verticals. Its client base includes the Unites States Internal Revenue Service (IRS), 27 states, the District of Columbia and nearly 4,600 additional clients, consisting of local governments and other public sector clients and approximately 100 private sector cli! ents. As of September 30, 2010, it offered nearly 9,200 payment types.
The Company provides businesses and individuals the opportunity to pay certain federal income and business tax obligations electronically via credit or debit cards. Payment options include all credit cards: American Express, Discover, MasterCard, Visa and all debit cards including some regional automated teller machine (ATM) card networks. Payment channels include Internet, IVR, and agent (a third-party provider who accepts payments on behalf of its client). In fiscal 2010, it provided payment services for 23 types of tax forms for the IRS. Revenues from Federal vertical represented 20.5% of EPS revenues for fiscal year 2010. Its contract with the IRS to provide payment services for federal tax payments contributed 17.1% of EPS revenue for fiscal year 2010.
The Company offers a variety of electronic payment solutions to state and local governments for electronic payments for personal income taxes and business taxes. For fiscal year 2010, this vertical represented 8.5% of EPS revenue.
Within the Utility vertical, the Company allows its customers and constituents of various companies and municipalities to pay their utility obligations electronically using all credit cards, debit card, e-check, cash or money order. The utility company customers can utilize the Internet, IVR, POS, agent, walk-up locations or kiosks to make these payments. For fiscal year 2010, this vertical represented 15.3% of EPS revenue.
The Company�� solutions within the education vertical service post-secondary education institutions. Solutions it provides to these clients include electronic payment options for tuition and fee payments, housing and alumni donations. During fiscal year 2010, this vertical represented 13.6% of EPS revenue.
Other vertical consists of state and local courts and citations, rent payments and insurance payments for various entities, electronic payment options for meal a! nd fee pa! yments for K-12 educational institutions, plus personal property tax payments. During fiscal year 2010, this vertical represented 14.8% of EPS revenues.
WIND-DOWN OPERATIONS
As of September 30, 2010, the Company�� Wind-down operations consisted of its VSA business from its former GBPO segment. In fiscal 2010, it serviced over 100 customers within this business.
The Company competes with Link2Gov, RBS WorldPay, SallieMae Business Office Solutions, TouchNet Information Systems, Inc, CheckFree, Bill Matrix, Oracle and Online Resources.
Advisors' Opinion:- [By Monica Gerson]
Official Payments Holdings (NASDAQ: OPAY) shares surged 0.23% to touch a new 52-week high of $8.65. Official Payments shares have jumped 87.61% over the past 52 weeks, while the S&P 500 index has gained 16.68% in the same period.
5 Best Warren Buffett Stocks To Buy Right Now: Crown Castle International Corporation (CCI)
Crown Castle International Corp., through its subsidiaries, owns, operates, and leases towers and other wireless infrastructure primarily in the United States and Australia. Its infrastructure includes distributed antenna system (DAS) networks, as well as rooftop installations. The company involves in the rental of antenna space of its towers to wireless communications companies. It also provides network services relating to its towers, which primarily include antenna installations and subsequent augmentations, as well as additional services, such as site acquisition, architectural and engineering, zoning and permitting, other construction, and other services related network development. As of December 31, 2010, it owned, leased, or managed approximately 23,900 towers, including 43 completed DAS networks. The company was founded in 1994 and is headquartered in Houston, Texas.
Advisors' Opinion:- [By CRWE]
Crown Castle International Corp. (NYSE:CCI) plans to release its third quarter 2012 results on Wednesday, October 24, 2012, after the market closes. In conjunction with the release, Crown Castle has scheduled a conference call for Thursday, October 25, 2012, at 10:30 a.m. Eastern Time.
- [By Victor Selva] the benefits of being in the right place at the right time.
As a matter of fact, the company is the second largest independent operator of wireless tower communication sites in the U.S. and it is the leading tower owner, with roughly 40,000 sites domestically and over 1,700 in Australia.
The firm leases and licenses antenna spaces on its controlled towers to major wireless carriers such as AT&T Inc. (T), Sprint Nextel Corporation (S) and Verizon Communications Inc. (VZ). Moreover, it leases access to its distributed antenna systems for the transmission of wireless signals related to the transmission of voice, video and data.
Long Lasting Upsides with Low Risk
Crown Castle has many advantages running to its favor, which have carved the company a narrow economic moat. For one, it boasts great visibility stemming from the fact that its long term contracts have enabled the firm to have more than 97% of its coming year�� revenue projections already assured.
Secondly, high switching costs make it unlikely for carriers to switch towers, since the costs of such a move would by far exceed the savings from changing to another operator. In addition, zoning regulations hinder carriers to do so. Third, its economies of scale allow the company great cost advantages that result in massive operating leverage.
And lastly, there is the upside of the network effect. Since each tower covers a specific area, multiple carriers will be willing to have presence in the same towers, given this is directly connected to their ability to compete over market share in the areas covered by each site.
Creating Shareholder Value
In early January 2014, Crown Castle began operating as a real estate investment trust. Upon the announcement of this decision, chief executive Ben Moreland stated that this conversion should ��ower our weighed average cost of capital and provide additional opportunities for creating long-term shareholder value.��I
- [By Anders Bylund]
Moreover, American Tower faces two massive rivals in Crown Castle International (NYSE: CCI ) and SBA Communications (NASDAQ: SBAC ) , which operate 40,000 and 20,000 American radio towers, respectively. American Tower falls right between them, with more than 21,000 company-owned towers on American soil, and another 7,200 leased tower sites. This is a tight three-horse race, with several smaller competitors trailing far behind.
- [By Brian Stoffel]
4. Crown Castle International (NYSE: CCI ) , P/E of 140
Crown is one of the major players in the industry. By "tower industry," I'm referring to the towers that now dot our landscape to help ensure wireless data can be transmitted with ease.�
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