Expanding shares of fast-growing markets By Stephen Leeb Before Warren Buffett, the word “franchise” referred to sports teams or perhaps to utilities that controlled a particular market by virtue of legal rights or regulatory authority. Buffett’s genius was to extend the concept to companies that controlled markets because of their… Read More

It could be a dynamo in the right hands By Stephen Leeb We rarely recommend a stock simply because we think it’s a potential takeover. Once in a while, though, we’re tempted. The reality today is that money is running freely and interest rates are very low—explaining why mergers… Read More

Stericycle and Lindsay play off key trends By Stephen Leeb We’re taking sizable profits in Gilead and Occidental Petroleum. Gilead remains a great company, with a nearly unassailable franchise in HIV medicines and a strong position in hepatitis C. That hepatitis C lead is the chief reason for the stock’s… Read More

7 stocks he should want to acquire By Stephen Leeb At 83, Warren Buffett is still going strong. In fact, in the last few years he made two of his biggest acquisitions ever: Burlington Northern for nearly $35 billion and more recently, in partnership with private equity firm 3G, Heinz for about $20 billion. With money still cheap and acquisition fever burning—nearly $350 billion in acquisitions topping $20 billion each were announced in the past six months—don’t be surprised if Buffett jumps into the fray again. Indeed at Berkshire Hathaway’s (Growth Portfolio) recent annual meeting, Buffett acknowledged being on the prowl for another major purchase. Given the nearly $50 billion on Berkshire’s balance sheet that’s earning very little, it certainly would make sense to deploy some of that cash for a company with decent free cash flow and good growth potential.   Read More

It’s the fastest-growing transmission company By Stephen Leeb If there isn’t a saying that a country is only as strong as its infrastructure, there should be—and it’s a statement that presents a direct challenge to the U.S. As we noted in the preceding article, the American Society of Engineers rates much of America’s infrastructure as being in serious disrepair, with hundreds of billions of dollars needed to bring it up to snuff. Our electric grid, which in places dates back to the 1880s, is of particular concern, according to the ASCE, which terms it a “patchwork system of…power generating plants, power lines, and substations…that must operate cohesively to power our homes and businesses.” One company that understands the importance of the grid and the need to diversify our energy sources is Berkshire Hathaway (Growth Portfolio). The most significant recent acquisition by MidAmerican Energy Holdings, the Berkshire-controlled utility, was NV Energy. NV derives the vast bulk of its revenues and income from the generation, transmission, and distribution of electricity—exactly what the country needs to better its failing energy infrastructure. Read More

Technology that maximizes energy extraction By Stephen Leeb In December our Spotlight stock was Core Laboratories. We loved the stock but held back from adding it to Growth Portfolio because of its excessively high valuation.  Recently, though, a relatively small disappointment, which in no way dims the company’s long-term prospects, has brought the shares within our buying range. We’re jumping on this opportunity and adding Core Labs to Growth Portfolio this issue. One of the world’s leading specialized technology companies, Core Labs focuses on the hydrocarbon arena and in particular on the two related parts of the industry arguably most critical to the future of oil and gas. They go by the acronyms EUR—for “estimated ultimate recovery”—and EOR—for “enhanced oil recovery.” Read More

A handy metric linking value and growth By Stephen Leeb Who does better—value investors or growth investors? The question has long divided Wall Street pros. Our preferred approach: be both at once. Value investors typically look for stocks with low P/E ratios, high dividend yields, and low price-to-book values. Growth… Read More

A deeply undervalued growth stock in a critical field By Stephen Leeb The latest warning that the world faces a severe food shortage comes from the Nobel Prize-winning Intergovernmental Panel on Climate Change, whose head, Rajendra Pachauri, recently noted that it has “become evident in some parts of the world… Read More

Low-tech Valeant and high-tech Monsanto shine By Stephen Leeb This issue we are selling Celgene and replacing it with a polar-opposite kind of drug company, Valeant Pharmaceuticals. In the agricultural area, we’re selling Potash and adding Monsanto.  Celgene remains a strong long-term investment, but three biotechs seem like a lot… Read More

All investors should own our hedges By Stephen Leeb As we write this, fast-moving events in Crimea and Ukraine both spotlight the world’s dangers and show how inextricably political and economic events are connected. Any major political crisis risks severe economic fallout, and not just to the most immediate participants… Read More