Companies Warren Buffett invested between 1998 and 2001 (Part 2)

Companies Warren Buffett invested between 1998 and 2001 (Part 2)

Aegis Realty: This is a real estate investment trust (REIT) that owns and manages three million square feet of shopping-center space. We believe Buffett was buying it in 2000 for around $8 to $9 a share. It pays a dividend of $0.96 a share and has a book value of $14.81 a share. This is an interest play that pays a 10% return and a Grahamian value play that's selling below book value.

Price paid: $8 to $9 a share
Dividend: $0.96 a share
Book value: $14.81 a share
Initial return: 10%


Dun & Bradstreet Corp: This sells business information about other businesses.. Buffett bought this in 1998 because it is a great company and it was about to spin off its lucrative Moody's Investors Services. In spin-offs, the market sometimes fails to fully appreciate the value of the whole divided into separate parts. This is a Berkshire holding, believed to have been purchased in 1999 before the spin-off for approximately $15 a share. As of May 2001, it trades at $27 a share. Moody's Investors Services was spun off on September 30, 2000, at $26 a share, and as of May 2001 it trades at $32 a share. On Buffett's original $15 investment in D&B he made $12 on the D&B side and $32 on the Moody's side for a total profit of $44, which equates to a 293% return on his original investment of $15. Where was the rest of Wall Street? Off chasing tech stocks, of course.

Price paid: $15 a share


First Data Corp: This company process those millions of credit card transactions. It's a fantastic business with which Buffett has long been fascinated. This is a Berkshire holding.
Buffett started buying it in 1998 during a fall contraction/panic sell-off that dropped its price down to $20 a share against earnings of $1.56 a share, which equates to an initial return of 7.8%. It's per share earnings had a 15% annual rate of growth. In May 2001 its stock was trading at $66 a share, which equates to a 48% compounding annual rate of return.

Price paid: $20 a share
Earnings: $1.56 a share
Initial return: 7.8%
Per share earnings annual growth rate: 15%


Furniture Brands International: Buffet probably saw this one in Value Line, did his scuttlebutt at the Nebraska Furniture Mart, and discovered that Furniture Brands International was the number one manufacturer of residential furniture in America. This is a Berkshire holding.
We believe that he started buying it in 2000 for around $14 a share against earnings of $1.92 a share, which equates to an initial return of 13.7%. Its per share earnings have been growing at an annual rate of 28%. This is a great business. Everyone buys furniture at some time or another, and FBI is there to sell it to them. It has been in business since 1921 and has strong earnings and great returns on equity and total capital. Over the years it has come to dominate its field. Buffett bought after the 1999 bubble burst. It didn't stay down long. By February 2001 it was trading at $25 a share, giving Buffett a quick 79% return on his money.

Price paid: $14 a share
Earnings: $1.92 a share
Initial return: 13.7%
Per share earnings annual growth rate: 28%



Related articles:
Companies Warren Buffett invested between 1998 and 2001 (Part 1)
Companies Warren Buffett invested between 1998 and 2001 (Part 2)
Companies Warren Buffett invested between 1998 and 2001 (Part 3)
Companies Warren Buffett invested between 1998 and 2001 (Part 4)
Companies Warren Buffett invested between 1998 and 2001 (Part 5)