Warren Buffett has always been identified as a “value investor” but those who have studied his investing career know that it is not so easy to pigeonhole his true investing style. This should not come as a particular surprise since it is obvious that an investing outlier such as Mr. Buffett must have applied unique insights over the years. According to Prem Jain, author of Buffett Beyond Value, Mr. Buffett’s true investing style is “value + growth”. In other words, the goal is to find investments that offer solid prospects of future growth while also providing substantial downside protection.
Prem Jain published a brief article today summarizing his views on Warren Buffett’s investing style. Here is a brief excerpt: [more]
Despite paying the largest penalty ever assessed against a financial firm by the Securities and Exchange Commission, Goldman Sachs is still an attractive target for government panels investigating the financial crisis. Goldman agreed to pay a $550 million settlement on July 15 in connection with the Abacus case in which the SEC alleged that Goldman failed to disclose key information regarding the portfolio selection process. Today, the Financial Times reported that Goldman is facing a separate inquiry by the Financial Crisis Inquiry Commission (FCIC) regarding the company’s use of derivatives. [more]
Ensco plc recently announced second quarter 2010 earnings of $126.3 million, or $0.89 per share. As expected, the results were negatively impacted by lower utilization for the fleet as well as lower average dayrates. Contract drilling revenues were $406.3 million compared to $449.4 million for the first quarter. Second quarter 2009 contract drilling revenues were $497.3 million. The company ended the quarter with $1.2 billion of cash and tangible book value of $5.4 billion, or approximately $38 per share. The long term debt to capital ratio was 4 percent and total contract backlog was $2.6 billion.
We profiled Ensco in greater detail on June 11 when shares traded at $38.31. The share price has advanced to $41.20 at the close of trading today. Recently, we learned that Greenlight Capital acquired a large position in Ensco during the second quarter. David Einhorn, President of Greenlight Capital, recently explained his rationale for the Ensco position. In this article, we will take a closer look at Ensco’s results with a particular focus on trends in dayrates as well as the company’s increasing commitment to the deepwater segment. [more]
General Motors has announced an all cash transaction to purchase AmeriCredit for $3.5 billion. AmeriCredit is an automobile financing company that was founded in 1992 and has particular expertise in non-prime lending. GM has lacked an in house financing unit since 2006 when it divested General Motors Acceptance Corporation (GMAC) which has since been rebranded as Ally Financial. Having a “captive” financing unit will allow GM to provide credit to customers who find it difficult to qualify for loans due to subpar credit. Once the acquisition is complete, AmeriCredit will also enter the leasing business which should further expand opportunities for GM to attract customers. [more]
Tractor Supply Reports Strong Q2 Results Published on July 21, 2010 at 6:05 pm
ontango Oil & Gas Company issued a press release today that announced new production from recent discoveries in the Gulf of Mexico. In addition, the company announced new production from eight onshore wells in Texas that are part of a joint venture. Five additional onshore wells are planned through the joint venture. Read article with analysis and commentary: http://www.rationalwalk.com/?p=8372 [more]
Noble Corporation recently announced second quarter 2010 earnings of $218 million, or $0.85 per share. The results were negatively impacted by a combination of lower utilization for the overall fleet and sharply lower average dayrates. As a result, contract drilling revenues dropped to $687.5 million for the second quarter compared to $808.6 million for the first quarter. Second quarter 2009 contract drilling revenues were $868.2 million.
We profiled Noble in some detail in early June when the shares traded at approximately $28. After significant volatility in trading yesterday, Noble shares closed up 4.6 percent at $32.06 on the earnings news despite failing to meet analyst estimates. In this article, we will take a closer look at Noble’s quarterly results with particular attention devoted to trends on dayrates and Noble’s changing mix of revenues by rig type. Noble still appears attractive. [more]