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Saturday, March 30, 2013

WASHINGTON POST: Heinz shareholders will vote on $23.3B sale to Buffett’s company, 3G Capital on April 30


PITTSBURGH — Shareholders of H.J. Heinz Co. will vote on April 30 whether to sell the ketchup maker to Warren Buffett’s Berkshire Hathaway and 3G Capital for $23.3 billion.
Heinz also said Wednesday that antitrust regulators approved the deal early, clearing one of the conditions to completing the transaction.

Heinz shareholders will receive $72.50 in cash for each share they own if the deal is approved.
Based on Pittsburgh-based Heinz’s number of shares outstanding, the deal is worth $23.3 billion. Including debt, the deal is worth about $28 billion.
Berkshire Hathaway Inc., based in Omaha, Neb., is putting up $12.12 billion in return for half of the equity in Heinz, as well as $8 billion of preferred shares that pay 9 percent. Brazil’s 3G Capital will run Heinz.
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BLOOMBERG: Swiss Re Settles Contract Dispute With Berkshire Hathaway


Carolyn Bandel - Mar 28, 2013 9:58 PM GMT+1300
Swiss Re Ltd. (SREN), the world’s second- biggest reinsurer, expects to post a first-quarter gain of about $100 million after settling a dispute over a so-called retrocession deal with Warren Buffett’s Berkshire Hathaway Inc. (BRK/A)
Swiss Re will take back some of the risks covered by the closed block of U.S. life reinsurance and in return will receive a payment of $610 million from Berkshire Hathaway, the Zurich- based company said today in an e-mailed statement.
The Swiss Re building, also known as the "Gherkin", center, stands alongside buildings in the city of London. Photographer: Simon Dawson/Bloomberg
Berkshire Hathaway will reduce the reinsurance protection it provides to Swiss Re for the retrocession deal to $1.05 billion from the $1.5 billion the Omaha, Nebraska-based company agreed to take on in January 2010. Berkshire Hathaway had alleged damages of between $500 million and $1 billion after the contract resulted in a 2011 pretax underwriting loss of $642 million as assumptions about mortality rates were exceeded.
“The settlement of the dispute with Berkshire Hathaway and the advantageous outcome for Swiss Re” are positive, said Georg Marti, a Zurich-based analyst with Zuercher Kantonalbank who has a market weight rating on the stock.
Swiss Re rose as much as 0.7 percent in Zurich trading and was up 0.5 percent to 77.60 Swiss francs at 9:26 a.m., valuing the company at 28.8 billion francs ($30.2 billion). The stock has gained 18 percent this year.

Producing Losses

“Prior to recapture, the treaties have been producing losses,” Swiss Re said in the statement. “There is no assurance that the payments received from Berkshire Hathaway will be sufficient to cover future losses.”
The retrocession contract was one of a number of deals between Swiss Re and Berkshire Hathaway over the past five years. Buffett’s firm injected 3 billion francs of capital into Swiss Re in February 2009 after record losses at the reinsurer. Swiss Re repaid the funds in November 2010.
Berkshire Hathaway also bought about 3 percent of Swiss Re in 2008, when it signed a quota share agreement that gave the U.S. firm 20 percent of the reinsurer’s new or renewed property and casualty business. That contract ended in December.
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Friday, March 29, 2013

NASDAQ: Warren Buffett's Berkshire Hathaway Keeps Buying NOV

\By GuruFocus March 28, 2013, 07:25:03 PM EDT

Ranked 184th on this year's Fortune 500 list of America's largest companies, National Oilwell Varco, Inc. NOV ) also ranks on Warren Buffett 's keeps-buying list as one of the stocks with the highest average 10-year EBITDA growth rate of 28.4%. With a portfolio weighting of 0.48% as of Dec. 31, 2012, Berkshire Hathaway lists 5,294,800 NOV shares, valued around $361.8 million, but a fraction of the portfolio. The current NOV share price is $70.60, with a change from average down 2%. Last year on this day, stock was $78.21. 

Berkshire Hathaway BRK.A ) BRK.B ) last added to its NOV position by 26.46%, quarter ending Dec. 31, 2012. In that same quarter, Gurus John Burbank, Chuck Royce and Bruce Kovner sold out. Other Gurus buying or adding to their NOV position that same quarter are: T. Boone Pickens, David Rolfe, Jim Simons, Robert Olstein, Paul Tudor Jones and John Rogers.

Competing with other Fortune 500s, Halliburton, 118th on the list, and Baker Hughes, 141st on the list, and others in the oil and gas equipment services arena, Houston-based National Oilwell Varco, Inc., is a giant among providers of oil and gas drilling equipment and components. The company has operations in over 900 locations across six continents. 

The company has a market cap of $30.23 billion. The P/E ratio is 12.2, and the P/S ratio is 1.5063. National Oilwell Varco ( NOV ) 12-month growth rate is 36.1%, annual rate per share. 

Here's Warren Buffett's NOV holding history: 



Last month National Oilwell Varco, Inc. completed its $2.5 billion all-cash acquisition of Robbins & Myers, Inc., a supplier of application-critical equipment and systems in global energy, chemical and other industrial markets. According to Rigzone, the combination of the two companies' manufacturing infrastructure and technology portfolio would allow NOV to further advance its presence in oil and gas markets. Pete Miller, Chairman, President and CEO of National Oilwell Varco, stated, "Robbins & Myers has many complementary products with those National Oilwell Varco currently offers the industry...I am particularly enthusiastic about the prospect of incorporating their downhole tools, pumps and valves into National Oilwell Varco Petroleum Services & Supplies and Distribution & Transmission segments." 

Here's a detailed financial history of NOV performance. 

For Warren Buffett's top buys, top sales, and top holdings, take a look: 


Here is the complete portfolio of Warren Buffett. 

Also check out: 

1. Warren Buffett's Undervalued Stocks 
2. Warren Buffett's Top Growth Companies 
3. Warren Buffett's High Yield stocks 
4. Stocks that Warren Buffett keeps buyingAbout GuruFocus: GuruFocus.com tracks the stocks picks and portfolio holdings of the world's best investors. This value investing site offers stock screeners and valuation tools. And publishes daily articles tracking the latest moves of the world's best investors. GuruFocus also provides promising stock ideas in 3 monthly newsletters sent to Premium Members .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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Warren Buffett was working as an investment salesman in Omaha.



Warren Buffett was working as an investment salesman in Omaha.
BloombergTV

In his early 20s, Buffett worked as an investment salesman for Buffett-Falk & Co. in Omaha before moving to New York to be a securities analyst at age 26. During that year, he started Buffett Partnership, Ltd., an investment partnership in Omaha.
New York just wasn’t for him, Buffett told NBC. “In some places it’s easy to lose perspective. But I think it’s very easy to keep perspective in a place like Omaha.”

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Thursday, March 28, 2013

FOX BUSINESS: Goldman Sachs Massages '08 Warrant Deal With Warren Buffett


Published March 26, 2013
FOXBusines




Warren Buffett said he plans to hold a “significant investment” in Goldman Sachs (GS) after the Wall Street investment bank amended terms of crisis-era warrants awarded to the billionaire’s Berkshire Hathaway (BRK.A). 
Goldman shareholders cheered the news, bidding the financial giant’s shares more than 1% higher in premarket trading.

“We are pleased that Berkshire Hathaway intends to remain a long-term investor in Goldman Sachs,” Lloyd Blankfein, Goldman’s CEO, said in a statement.

Goldman, which received a crucial $5 billion investment from Buffett during the financial crisis, said it has amended its warrant agreement with Berkshire from cash settlement to net share settlement.

Under terms of the original agreement, Berkshire had the right to acquire 43,478,260 shares of Goldman’s common stock at an exercise price of $115 at any time until October 1.

Goldman’s shares closed at $146.11 on Monday, meaning Berkshire conceivably could have sold its approximately $5 billion of new shares for about $6.35 billion on the open market.

However, Goldman said it will now deliver to Berkshire the number of shares of common stock equal in value to the difference between the average closing price over the 10 trading days preceding October 1, 2013, and an exercise price of $115 multiplied by the number of shares of common stock covered by the warrant (43,478,260).

“We intend to hold a significant investment in Goldman Sachs, a firm that I did my first transaction with more than 50 years ago," said Buffett, the CEO of Berkshire. "I have been privileged to have known and admired Goldman's executive leadership team since my first meeting with Sidney Weinberg in 1940."
Shares of New York-based Goldman gained 1.3% to $147.97 in premarket trading on Tuesday, putting them on track to extend their 2013 rally of 14.5%.

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THE INDEPENDANT: Wall Street critic Warren Buffett gets 2% of Goldman Sachs



NEW YORK
 


Warren Buffett, the American investor who in the past has criticised the casino culture that pervades Wall Street, is set to become one of the leading shareholders in Goldman Sachs, the investment bank he backed by taking a stake during the financial crisis. And he won't even have to spend a penny of his own money.

Back in 2008, Buffett's Berkshire Hathaway conglomerate invested billions of dollars in Goldman and in return received warrants allowing it to buy around 9 per cent of the bank for $115 per share by October 2013. 

Yesterday, however, Goldman said Berkshire had instead agreed to exchange its potential profit on the warrants for the bank's stock, meaning that it wouldn't have to dip into its cash reserves to become a sizable shareholder with around 2 per cent of Goldman. That would make it – and Mr Buffett – the bank's ninth largest shareholder. "We intend to hold a significant investment in Goldman Sachs," Mr Buffett said yesterday.

The investment adds Goldman to a share portfolio that, despite Mr Buffett's often vocal calls for a realigning of what he once called "unbalanced incentives" on Wall Street, already includes Wells Fargo, Bank of America and the smaller though still sizable M&T Bank.

Recently he has gone on record to defend institutions that he believes have attempted to roll back the excesses and, in the years since the crisis, sought to build up their capital buffers. "The banks will not get this country in trouble, I guarantee it," he told the Bloomberg financial news service earlier this year. "The capital ratios are huge, the excesses on the asset side have been largely cleared out." He added: "Our banking system is in the best shape in recent memory."

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THE MOTLEY FOOL: Warren Buffett's Top 5 Bank Stocks



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The catchphrase used to be, "When E.F. Hutton talks, people listen." Now when it comes to financial advice, you could easily insert the name Warren Buffett.
Does the Sage of Omaha need an introduction? Just in case, according to Forbes Buffet is the fourth-richest man in the world. As a general rule, he got that way by investing in companies he can easily get his head around, have powerful brands, have wide moats, and are undervalued.
Through his company, Berkshire Hathaway (NYSE: BRK-B  ) , Buffet invests in a little bit of everything, including bank stocks. Here are Berkshire's top five bank holdings, along with a quick explanation of why Buffett and his team might like them:
5. M&T Bank (NYSE: MTB  )
At around $551 million, M&T is Berkshire's smallest bank holding. It's a regional bank assets of about $81 billion. Not big by JPMorgan Chase standards, but big enough to do serious business and potentially exhibit serious growth, which it's already done.
In the past year, M&T's share price has increased by 18.68%. The bank also has a price-to-book ratio of 1.41: indicating it's not a screaming value, but also that the bank certainly isn't overvalued.
Small enough to get your head around, but big enough to make things happen, all at a reasonable valuation: From a Buffett perspective, what's not to like?
4. Bank of New York Mellon (NYSE: BK  )
At around $555 million -- just slightly more than M&T -- BNY Mellon is Berkshire's next biggest bank holding. But BNY is a big bank, the country's eighth largest. It has nearly $360 billion in assets on its balance sheet. 
That said, it's run rather conservatively. Most of the business it does is with other banks, all of which is conducted in a straightforward manner. Ever read about BNY in the news, getting fined left and right by regulators? Or being sued by angry investors?
No, BNY is a throwback to the days when banks were beautifully boring, yet profitable. BNY has returned 14.64% to investors in the past year, and the P/B of is 0.93: all right up Buffet's alley.
3. U.S. Bancorp
At a little over $2 billion, U.S. Bancorp is Buffett's next biggest bank holding. Like BNY Mellon, it's a big bank, with assets of around $353 billion. 
Also like BNY Mellon, U.S. Bancorp is another bank that -- for all its immensity -- also operates relatively under-the-radar. And while its P/B is little high -- 1.83 -- its return on equity is a fabulous 14.59%, which means it's out there making good on Buffet's investing dollars.
In the past year, it's only returned 4.86% of positive share-price growth, but Buffett doesn't necessarily go for high-flyers. He'll typically take steady, low-drama growth any day of the week.
2. American Express (NYSE: AXP  )
This is a bit of cheat. AMEX isn't a bank, but it's a big financial services company that Buffett likes enough to hold more than $10 billion of.
AMEX is a classic American company that's been around forever, and that -- like Coca-Colaand General Electric, other Buffet holdings -- always performs well for both customers and investors in the long run. Over the past year, the share price of AMEX increased by 12.68%, and its ROE is a staggering 23.79%.
Performance. Stability. A powerful brand name. There's no surprise AMEX is one of Buffett's biggest holdings.
1. Wells Fargo (NYSE: WFC  )
From a Warren Buffett perspective, we now come to the king of stocks. Wells Fargo is not only Berkshire Hathaway's biggest single financial holding, it's Berkshire's biggest single holding, period: more than $16 billion. 
For all its immensity, and for how involved it was (and still is) in the U.S. mortgage market, Wells came through the boom and bust in excellent shape: smartly staying away from the excesses that sunk or caused endless trouble for other big banks.
And in the last year, Wells has returned 8.2% to its investors. It's another big, well-run, beautifully boring yet profitable bank. Again, right up Warren Buffett's -- or anyone's -- alley.
Foolish bottom lineJust because one person invests one way, even if he is the fourth-richest person in the world, doesn't necessarily mean you should do the same. But an investing philosophy like Buffet's -- backed up by years of outstanding performance -- is certainly worth considering seriously.
As noted earlier, Wells Fargo's dedication to solid, conservative banking helped it vastly outperform its peers during the financial meltdown. Today, Wells is the same great bank as ever, but with its stock trading at a premium to the rest of the industry, is there still room to buy, or is it time to cash in your gains?
To help figure out whether Wells Fargo is a buy today, check out this premium research report from one of The Motley Fool's senior banking analysts and Wells specialist -- John Maxfield. For instant access to this in-depth take on Wells Fargo, simply click here now.
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