Showing posts with label newspaper. Show all posts
Showing posts with label newspaper. Show all posts

Friday 22 June 2012

Investor's Checklist: Media

Look for media companies that consistently generate strong free cash flow.  We like to see free cash flow margins around 10 percent.

Seek out companies that have high market share in their primary markets - monopolies are often great for profits.  Licenses, especially in broadcasting, also serve to reduce competition and keep profit margins high.

Seek out companies with a history of well-executed acquisitions that have been followed by higher margins.

A strong balance sheet enables media companies to make selective acquisitions without increasing the risk for shareholders or diluting the shareholders' ownership stake.

Look for candid management teams, a history of sensible acquisitions, and either conservative reinvestment of shareholders' capital or the return of capital to shareholders through dividends and stock repurchases.


Don't chase hits.  Buying a stock because there's a lot of buzz about a hit movie or TV show rarely pays off.


Ref:  The Five Rules for Successful Stock Investing by Pat Dorsey



Read also:
Investor's Checklist: A Guided Tour of the Market...

Sunday 11 December 2011

The annual report should be an essential read for all current and potential shareholders to a company.

While the share price tables in the newspaper provide a useful summary of company information, they are limited because their price information is historical and the data only represents part of the company story.  

The share price tables in the business section of  the newspaper provide an excellent summary of key information on a company.  They generally show the previous day's closing price, price range, upcoming dividends, yield and PE ratio.  The detail will vary depending on the newspaper.  By its nature this information is always going to be dated and does not provide an investor with other important elements to the company's story, such as management experience, recent business developments and what their competitors are doing.


What document are these crucial information sources found in:  Director's report, company financial tables, corporate governance report, and largest shareholders table?  Answer:  Annual report.


The annual report should be an essential read for all current and potential shareholders to a company.  It contains key information on the current and expected future health of a company.


http://www.asx.com.au/courses/shares/course_07/index.html?shares_course_07


Monday 4 May 2009

Buffett admits investment mistakes but shareholders keep the faith

Buffett admits investment mistakes but shareholders keep the faith

The legendary stockpicker dubbed the Sage of Omaha still wowing the crowds despite 35% drop in Berkshire Hathaway share price

Andrew Clark in Omaha, Nebraska
guardian.co.uk, Sunday 3 May 2009 19.47

It is usually a festival of financial self-congratulation in the US heartland. But a sombre tone descended on Warren Buffett's annual investor meeting as the legendary stockpicker was obliged to defend the worst year of his career.

Facing a record crowd of 35,000 shareholders in his Berkshire Hathaway business empire, who had come from as far afield as Australia and South Africa, Buffett admitted this weekend that he had failed to "cover himself in glory" since the global financial crisis began.

"It's been an extraordinary year," he said. "I'm not sure you'll see this again in your lifetime."

Held in Buffett's home city of Omaha, the quirky annual gathering of Berkshire's shareholders has become known as Woodstock for capitalists. Investors queued from 4am yesterday to snatch prime seats in the Qwest arena. A light-hearted video depicted the billionaire being demoted to a mattress salesman in one of his Nebraska Furniture Mart stores as punishment for the loss of Berkshire's treasured triple-A credit rating.

For six hours, Buffett, 78, and his lifelong business partner, Charlie Munger, 85, fielded queries chosen by a panel of journalists about their investment approach. "There's always a lot of things wrong with the world," Buffett told investors. "Unfortunately, it's the only world we've got so we have to deal with it."

Losing Berkshire's blue-chip credit rating, Buffett admitted, was "disappointing", causing the firm to "lose some bragging rights around the world" in terms of the rock-solid reliability of the insurance policies it sells. It was part of a string of setbacks for Berkshire, which has seen its shares slump by 35% since the start of 2008.

The book value of the company's assets, which include a stake in Tesco and ownership of Northern Electric, fell by 9.6% in only his second negative year since 1965. Investments ranging from Fruit of the Loom underwear to American Express credit cards and NetJets corporate aircraft caught the thick edge of the recession. First-quarter operating profits fell from $1.9bn (£1.3bn) to $1.7bn.

Shareholders, by and large, are still unstinting in their faith. Charles Hostetler, an insurance agent from Kansas, compared Buffett to a St Louis Cardinals baseball star of the 1960s, Bob Gibson. "You've got a great pitcher like Bob Gibson. He had one bad year in a 20-year career and 18, 19 good years," said Hostetler. "You wouldn't give up on him after one bad year, now would you?"

He added: "It wasn't a good year for Berkshire, but it wasn't a good year for America either."

But Wall Street critics say Buffett's Midas touch has deserted him through a series of unforced errors. A punt on two Irish banks went spectacularly awry as their stocks plunged by 89% and he made a costly investment in the energy firm ConocoPhillips just as the oil price peaked last summer.

Many have queried a decision by Buffett to plunge into derivatives – once scorned by the billionaire as "financial weapons of mass destruction". At the end of 2008, Berkshire had contracts with a notional long-term value of $67bn betting on the long-term performance of stocks and bonds.

Buffett has also found himself on the back foot over Berkshire's 20% stake in the credit-rating agency Moody's.

Quizzed about this, he said: "There was almost total belief throughout the country that house prices not only wouldn't fall significantly but would keep rising. The ratings agencies built that into their models."

The cult-like status of Buffett endures, despite these mishaps. In the Qwest arena's exhibition hall, shareholders snapped up packs of playing cards bearing images of Buffett and a popular T-shirt for children reads: "Warren Buffett is building my future."

Some took a more sceptical view. David Newton, a South African who came from Johannesburg for the meeting, welcomed the tougher examination of Buffett: "Last time I was here was completely a prayer meeting. If somebody had asked Warren if they should fly to the moon and he'd said yes, they'd have gone straight off and done it."

Still sprightly in his seventies and adept at playing the ukulele, Buffett has balked at publicly naming a successor, saying he sees no value in having a "crown prince" lurking around. He has, however, revealed that he has four potential proteges in mind. In a worrying sign, Buffett disclosed that none of these apprentice investment managers had beaten a 37% drop in the S&P 500 index last year. "You would not say they covered themselves with glory," he said. "But I didn't cover myself in glory either, so I'm pretty tolerant of that."


Bad news for papers

A former paperboy, Warren Buffett is a fan of newspapers but he offered a gloomy perspective on prospects for publishers struggling with falling readerships and dwindling advertising. "For most newspapers in the United States, we wouldn't buy them at any price," said Buffett, who has a stake in the Washington Post and owns the Buffalo News in New York.

Buffett said circulations were being eroded at an accelerating pace, hitting commercial revenue: "They were essential to advertisers only as long as they were essential to readers, and that is changing … I don't see anything on the horizon that causes that erosion to end." Although a technophobe, he feels newspapers, with the possibility of "unending losses", offer little attraction for investors.

http://www.guardian.co.uk/business/2009/may/03/warren-buffett-shareholder-meeting

Buffett offers bleak outlook for U.S. newspapers

Buffett offers bleak outlook for U.S. newspapers
Sun May 3, 2009 12:33am EDT

OMAHA, Nebraska (Reuters) - Warren Buffett is fond of newspapers -- he reads five a day -- but the billionaire investor warned shareholders of his Berkshire Hathaway Inc that the reeling industry may never recover because it lacks a sustainable business model.

At Saturday's annual meeting of Berkshire, which owns the Buffalo News and has a big stake in Washington Post Co, Buffett said that as readership falls, so does the attraction of newspapers for advertisers, and for investors in the companies that publish them.

"For most newspapers in the United States, we would not buy them at any price," Buffett said. "They have the possibility of nearly unending losses. ... I do not see anything on the horizon that sees that erosion coming to an end."

Many U.S. newspapers have lost 20 percent or more of their advertising revenue as changes in technology and reading habits shrink circulation and more readers to get their news online.

Several newspapers in large U.S. cities have closed in recent months, and the future of the money-losing Boston Globe, owned by The New York Times Co, remains up in the air.

"Twenty, thirty years ago, they were a product that had pricing power that was essential," said Buffett. "They have lost that essential nature."

Buffett said Berkshire would hold on to the Buffalo News, a daily newspaper in the New York state city of the same name, if only because Berkshire buys businesses for the long term and does not sell simply because the companies hit a rough patch.

He did not rule out having to squeeze out excess costs, including possible job cuts, or eventually shuttering the paper if it goes too deeply into the red.

"On an economic basis you should sell this business. I said I agree 100 percent but I am not going to do it," he said. "The union has been cooperative in having an economic model that will at least give us a little bit of money."

Charlie Munger, Berkshire's vice chairman, called the decline of the newspaper industry "a national tragedy."

"What replaces it will not be as desirable as what we are losing," he said.

(Reporting by Lilla Zuill and Jonathan Stempel; Editing by Xavier Briand)


http://www.reuters.com/article/businessNews/idUSTRE5420I820090503