Money and Finance
Summary of recent stories of interest, sometimes enduring, to investors:
The Wide Moat Dividend portfolio (model portfolio) is designed to produce income and total returns, not drama. But there has been fair amount of the latter. There are only three stocks in there currently - Coke, IBM and GlaxoSmithKline, but they've managed to generate some interesting news
- Neil Woodford Is Going His Own Way
There was big news today in the income investing world as UK fund manager Neil Woodford announced he will leave Invesco Perpetual in 2014, after managing money there for 25 years. When I first saw the headline, I thought he might be pulling...
- Mccormick Spice - Almost Perfect
What makes a perfect investment? First off, the business should be in an excellent sector, and ideally it should control a niche in that sector. For sectors, I like how Don Yacktman looks for low cyclicality and low capex. Getting more specific,...
- The Surprising Link Between Jeff Bezos And Neil Woodford And What It Means To Dividend Investors
On the surface it appears that Amazon and Jeff Bezos are worlds away from anything a dividend investor would care about. After all, Amazon struggles to even show earnings, much less pay a dividend. But remember the first rule of investing, you are...
- Recent Buy - Glaxosmithkline (gsk)
Wow the markets have been taking a beating here lately and there's some stocks out there looking pretty cheap. The market volatility coupled with some troubling company headwinds are hitting some stocks extra hard. GSK is certainly not immune to such...
- Recent Buy - Omega Healthcare Investors (ohi)
Hi Everyone, The buys keep coming! It's been a real busy start to the year and things are not slowing down. I just got a raise at work, my wife is getting a new job that could potentially earn us a fair bit more money and we recently...
Money and Finance
High Yield Reads - 8/18/14
Summary of recent stories of interest, sometimes enduring, to investors:
The Wide Moat Dividend portfolio (model portfolio) is designed to produce income and total returns, not drama. But there has been fair amount of the latter. There are only three stocks in there currently - Coke, IBM and GlaxoSmithKline, but they've managed to generate some interesting news
- Coke paid $2.15 Billion for 16.7% of Monster, this does not appear to be that high a price. The most interesting story was a discussion of why Coke didn't just buy all of Monster. Coke wants to keep an arm's length from Monster's edgier brands.
- Stephen Lamacraft of Woodford Funds provided a useful way to look at GSK's reengineering:
GlaxoSmithKline is currently a very unpopular stock – as contrarian investors, this is one of the reasons we like it, because its unpopularity is reflected in a very low valuation. To put this into context, Bayer recently acquired Merck’s consumer healthcare business for 7x sales. If you were to put Glaxo’s consumer healthcare business (it recently put its consumer healthcare assets into a joint venture with Novartis) on the same multiple, it would be broadly equivalent to half of Glaxo’s market capitalisation.
By combining the potential valuation of the consumer healthcare division with the potential valuation of a world-class vaccines business and VIIV, a leader in HIV treatment, you get the current market value. As such you get a portfolio of existing pharmaceutical products and a strong pipeline of new drugs, in our view – for free! It’s worth mentioning that this division is no minnow with a potential valuation of £33bn, some 50% of the current market cap.
Now, we are not suggesting that a corporate bidder is going to pay that sort of money for Glaxo’s consumer healthcare business any time soon – it’s just an interesting way of looking at the valuation opportunity that exists in the stock currently. The recent earnings disappointment has fuelled the market’s desire to focus on the short-term but, in doing so, it is ignoring a very interesting long-term story. Indeed, we are increasingly positive on that long-term investment case.
- Continuing on the "significant amount of bad news already reflected in today's price", Barron's thinks the worst may be over at IBM.
- Morgan Housel - an Honest Stock Market Update.
- Interview with Lou Ann Lofton on how Warren Buffett Invests Like a Girl. "With Buffett, he doesn’t care what Wall Street’s doing. He’s not going to be suckered into that. He buys what he knows, for the long-term, and manages risk as best he can. All of these things will help people make money—that’s what it’s all about."
- Vitaliy Katsenelson shares his Robin Williams story and a great clip from Moscow on the Hudson.
- Tim McAleenan - The Twenty Stock, Twenty Year Investment Plan
- Neil Woodford Is Going His Own Way
There was big news today in the income investing world as UK fund manager Neil Woodford announced he will leave Invesco Perpetual in 2014, after managing money there for 25 years. When I first saw the headline, I thought he might be pulling...
- Mccormick Spice - Almost Perfect
What makes a perfect investment? First off, the business should be in an excellent sector, and ideally it should control a niche in that sector. For sectors, I like how Don Yacktman looks for low cyclicality and low capex. Getting more specific,...
- The Surprising Link Between Jeff Bezos And Neil Woodford And What It Means To Dividend Investors
On the surface it appears that Amazon and Jeff Bezos are worlds away from anything a dividend investor would care about. After all, Amazon struggles to even show earnings, much less pay a dividend. But remember the first rule of investing, you are...
- Recent Buy - Glaxosmithkline (gsk)
Wow the markets have been taking a beating here lately and there's some stocks out there looking pretty cheap. The market volatility coupled with some troubling company headwinds are hitting some stocks extra hard. GSK is certainly not immune to such...
- Recent Buy - Omega Healthcare Investors (ohi)
Hi Everyone, The buys keep coming! It's been a real busy start to the year and things are not slowing down. I just got a raise at work, my wife is getting a new job that could potentially earn us a fair bit more money and we recently...