Money and Finance
- Paying Up For Quality Stocks
Price is what you pay, value is what you get. - Warren BuffettA few years back, my wife and I were shopping around for a leather couch to put in our new home. As we walked around the showroom of a furniture store and had a look at some of the price tags...
- Use The Market's Short-termism To Your Advantage
Here's a general criticism that I often hear about investing in companies with economic moats: Companies with economic moats always look expensive and they trade with premium multiples to the market. How can we invest with a suitable margin-of-safety...
- Make The Most Of Your Investing Mistakes
Like most people, I don't like being wrong. Trouble is, I'm wrong quite often. To err is human, after all, and I've come to accept the fact that I'll make incorrect choices in the course of everyday life, such as the time I was about...
- A Simple Guide To Selling Stocks
Last weekend, a good friend came to town for a visit. We both started our financial careers on the same day -- and in the same training room, in fact -- but our career paths diverged a few years ago when he went the financial planning route and I went...
- The Importance Of Keeping A Good Watchlist
When Warren Buffett says of an investor's commentaries, "When I see memos from (him) in my mail, they're the first thing I open and read. I always learn something, and that goes double for his book," that's a pretty good sign that you...
Money and Finance
Broyhill Asset Management's thesis on Hospira, Inc.
As equity markets make seemingly daily new highs, it would be easy to accept the current prices of stocks as “truth” but the correct price is impossible to ascertain, given the massive distortion encouraged by relentless and continuous central banks buying of bonds (and other assets). For value investors, this can be a difficult and frustrating environment. On the one hand, it is a terrific time to be a seller of assets, but on the other hand, it is much more challenging to find compelling ideas that meet our return requirements.
Given these challenges, it is important to remember that economic uncertainties have always existed, so in some ways, investing in an unbalanced world simply comes with the territory. As a result, we aren’t doing anything radically different in light of the current macro backdrop. Rather, we continue to focus on investments that are largely insensitive to market risk, investments that do not require government intervention to generate profit, and investments that have several paths to profitability and multiple layers of protection. In short, our research seeks to identify outstanding companies, with sustainable competitive advantages, trading at a discount to intrinsic value. This collection of profitable businesses makes up The Broyhill High Quality Dividend Portfolio.
This week, we shared our investment thesis on a recent addition to the portfolio with Forbes. While Hospira (HSP) does not currently pay a dividend, we were able to establish our position in this high quality, market leader at an average cost below $31 and sold options on the stock to generate an additional $3.35 of premium. In this report, we outline our rationale for an investment in Hospira. We think the thesis is so simple that it could be sketched on the back of a napkin, so we did. For those looking for greater detail, it can be found in the balance of our report, by clicking on the napkin below.
- Paying Up For Quality Stocks
Price is what you pay, value is what you get. - Warren BuffettA few years back, my wife and I were shopping around for a leather couch to put in our new home. As we walked around the showroom of a furniture store and had a look at some of the price tags...
- Use The Market's Short-termism To Your Advantage
Here's a general criticism that I often hear about investing in companies with economic moats: Companies with economic moats always look expensive and they trade with premium multiples to the market. How can we invest with a suitable margin-of-safety...
- Make The Most Of Your Investing Mistakes
Like most people, I don't like being wrong. Trouble is, I'm wrong quite often. To err is human, after all, and I've come to accept the fact that I'll make incorrect choices in the course of everyday life, such as the time I was about...
- A Simple Guide To Selling Stocks
Last weekend, a good friend came to town for a visit. We both started our financial careers on the same day -- and in the same training room, in fact -- but our career paths diverged a few years ago when he went the financial planning route and I went...
- The Importance Of Keeping A Good Watchlist
When Warren Buffett says of an investor's commentaries, "When I see memos from (him) in my mail, they're the first thing I open and read. I always learn something, and that goes double for his book," that's a pretty good sign that you...