Filed under: Deals, Management, Competitive strategy, Berkshire Hathaway (BRK.A), Entrepreneurs, Bargain stocks, Chasing Value, Ideal Stocks for 2008, Loews Corporation (LTR)

This was one of my last to make the list of 8 for 2008, and didn’t show up in previous stories, but investors should take note. Everything we read and hear about the investment climate in 2008 makes one rather tepid about the stock market. One of my friends even suggested to me a few days ago that he was considering going to all cash. That’s a bad idea. A better idea is to find investments that will do well in this environment. Loews Corp. (NYSE: LTR) might very well be that company. The stock shut on December 28, 2007, at $49.35.

In a current news release, Loews announced a plan to spin-off Lorillard. By mid-summer LTR should be separated from this tobacco company and maker of the Newport brand of cigarettes. This will free up some cash for stock buybacks, according to the article, and also from some liability. This might be good news to many but isn’t the reason I like Loews so much.

The real reason is that in searching out investment opportunities I took an interest in Diamond Offshore (NYSE: DO) as a major player in the search for oil offshore. Well it turns out that Loews is a major shareholder. When I was reviewing insurance companies, which were way down in 2007, and I think oversold now, I came across CNA Financial (NYSE: CNA), which has fallen on hard times and might be a comeback story. Then I learn that Loews owns a major stake in CNA too.

The intrigue didn’t end there. Last year and this, I was high on Duke Energy (NYSE: DUK) which split-off its subsidiary Spectra Energy (NYSE: SE), so I’ve been watching the natural gas industry. Loews seems to be everywhere I want to be; they’re movers and shakers owning Boardwalk Pipeline (NYSE: BWP) out of Texas.

It just seemed to me that through Loews you are getting a miniature version of Berkshire Hathaway (NYSE: BRK.A) with equally impressive management (very important) in the Tisch family. They have controlled Loews for decades and I imagine have nothing but grateful shareholders to show for it as the five-year chart portrays.

Loews had a great run from 2004 to mid 2007, and then it became erratic. But the spin-off of Lorillard, along with stock buybacks and increased liquidity, might be setting the stage for the next rise.

Loews has a reasonable P/E around 11 (TTM), a P/S of 1.62, and a P/B of 1.55, and a PEG ratio (something I look at less frequently) of 0.57. Loews adds strong management, good diversification, and the potential to take advantage of opportunistic investing in 2008 at what I believe is a reasonable price.

To find potential opportunities and verify my track record, read Chasing Value and Serious Money.

DISCLOSURE: I’m an active investor. I don’t own shares of LTR but might acquire shares at a future date.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

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Filed under: International markets, Competitive strategy, Chasing Value, Commodities, Anglo Amer ADR (AAUK), Ideal Stocks for 2008

To me Anglo American plc (ADR) (NASDAQ: AAUK) is another must-own stock that could end up in M&A discussions, and in this year of uncertainty that’s all the more likely. Let’s see, it’s a global player in diamonds, gold, silver, platinum, coal, and more. This is a currency play, a commodities play, a global play, and an inflation hedge — got to love that if you can get it at the right price. It was higher, but the closing price on December 28, 2007, for AAUK was $30.79.

Unlike oil prices that may be affected by the weather, new technologies, or alternative sources, these commodities will remain in demand. Gold may be used instead of silver, platinum instead of gold, but except for locating new supplies the demand for these precious metals and commodities can only grow with the growth of the new economies and the wealth of their citizens.

AAUK was one of my superior calls during 2007, up about 30%, but I take pause wondering if it will do well based on economic fear driving precious metals up, or whether it will have to rebalance its mining efforts based on less demand for commodities if there is a slow down.

As the five year stock chart indicates, global economic expansion has been good to AAUK, which is a reflection of the commodities market and further supported in the rise in value of gold too. The economy is sputtering now but I do not think I would get much argument even from perma-bears that AAUK is a good bet on the long-term demand for commodities. This trend should last for decades.

Some of the stocks included in my 2008 picks were selected to create a well-balanced strategic long-term portfolio. I think that can be accomplished with seven to ten stocks. However, if I were to create a tighter group with four or five I would still think about AAUK.

To find potential opportunities and verify my track record, read Chasing Value and Serious Money.

DISCLOSURE: I currently own shares of AAUK.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

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Filed under: Deals, Consumer experience, Competitive strategy, Time Warner (TWX), Sony Corp ADR (SNE), Verizon Communications (VZ)

Warner Brothers, part of Time Warner Inc. (NYSE: TWX), has decided that its HD material will only be released on the Sony (NYSE: SNE) supported Blu-ray format. That’s bad news for Toshiba, which has championed the rival HD-DVD technology. According to Reuters “Warner Bros., Hollywood’s biggest seller of DVDs, represents about 18 to 20 percent of sales in the United States and was one of the few studios that backed both formats.”

While the news is good for Sony, it is hard to say whether it will speed high definition DVD adoption. The fact that there are two formats has confused consumers. This has likely kept them out of the market and forced them to rely on HD content delivered over cable and satellite. As a matter of fact, it might be a key to improved satellite TV subscription numbers.

The presence of two formats has likely also helped the new fiber-to-the-home products from telephone companies like Verizon Communications (NYSE: VZ). They’ve enough bandwidth to support a number of HDTV channels.

Sony may have gotten some good news, but consumers might have already turned elsewhere for high definition content.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: World wide web, Office, Productivity, Web services, Google, web 2.0

Google promises a feature-packed 2008 for Google Docs and we believe them. Not even a week into the new year, Google Docs has already implemented some new features. The most striking additions affect Google Presentations, the newest arm of Google Docs. Although we were impressed with Google Presentations when it debuted a few months ago, there was definitely room for improvement.

What stuck out to us the most was Google Presentation’s inability to export a presentation as a .PPT file. While you can’t export presentations as a PPT file, you can now easily embed presentations into your blog or website.

Take a look at this presentation we made with Google Docs to see some of the other features.

[via Googlified]

Read

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Filed under: International markets, Forecasts, Consumer experience, Competitive strategy, Brazil, Chasing Value, Agriculture, Stocks to Buy, Bunge Ltd. (BG)

Bunge Limited (NYSE: BG) is everywhere on the food chain according to the AOL Money & Finance profile. This includes being the leading global soybean processor, a leading South American fertilizer maker and the world’s largest oilseed producer. The stock has hardly taken a breath in its ascent over the last five years. On December 28, 2007, BG closed at $119.03 per share.

Soy is used in so many products as an alternate ingredient and/or vegan-friendly product, with new ones being created each day. This fact alone might make Bunge a growth story, even if world demand for food wasn’t increasing at such a rapid pace.

Over the last year, Bunge leaped 70%; in the last five years, BG has gained 433%. Normally this is not a place I would be looking for a cheap purchase. However, its P/E ratio is only 19, which, given its growth chart, it still seems cheap. When we think about its P/S of 0.33 which is cheap, and a small dividend yield of 0.58%, it does seem like a value, that is if demand continues to rise.

I believe it will continue to rise since the rapidly growing global economy is raising the standard of living dramatically for hundreds of millions of “newly minted capitalists” in China, Russia, India, Eastern Europe, Brazil and elsewhere. Improved of at least changing diets are ‘feeding demand,’ and people are also eating much more.

No longer satisfied with starchy rice, potatoes and beans, they’ve increased their consumption of fish, poultry, beef, and a wider variety of fruits and vegetables, and even alcoholic beverages. Of course they continue to adopt to the dubious growth of Western fast food restaurants too.

In my pursuit of 2008 value stocks that offer growth opportunities and safety too, I looked for companies that would benefit from these trends for many years. Looking at the five-year chart and the rapid jump in the stock price over the last six months I have to wonder if I’m making this pick at the tail end of a euphoric run or just getting in at the early stages of a long term trend. I choose to believe the latter.

People have to eat, and soybean products are not only a basic staple but they are becoming an integrated part of the vegan world, designer foods and special diets too. This seems like a very safe bet, and one “my pal Warren” might find just boring enough to invest in.

To find potential opportunities and verify my track record, read Chasing Value and Serious Money.

DISCLOSURE: I am an active investor. I do not own shares of BG but might acquire shares at a future date.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

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Filed under: International markets, Forecasts, Consumer experience, Competitive strategy, Brazil, Chasing Value, Agriculture, Stocks to Buy, Bunge Ltd. (BG)

Bunge Limited (NYSE: BG) is everywhere on the food chain according to the AOL Money & Finance profile. This includes being the leading global soybean processor, a leading South American fertilizer maker and the world’s largest oilseed producer. The stock has hardly taken a breath in its ascent over the last five years. On December 28, 2007, BG closed at $119.03 per share.

Soy is used in so many products as an alternate ingredient and/or vegan-friendly product, with new ones being created each day. This fact alone might make Bunge a growth story, even if world demand for food wasn’t increasing at such a rapid pace.

Over the last year, Bunge leaped 70%; in the last five years, BG has gained 433%. Normally this is not a place I would be looking for a cheap purchase. However, its P/E ratio is only 19, which, given its growth chart, it still seems cheap. When we consider its P/S of 0.33 which is cheap, and a small dividend yield of 0.58%, it does seem like a value, that’s if demand continues to rise.

I believe it will continue to rise since the rapidly growing global economy is raising the standard of living dramatically for hundreds of millions of “newly minted capitalists” in China, Russia, India, Eastern Europe, Brazil and elsewhere. Improved of at least changing diets are ‘feeding demand,’ and people are also eating much more.

No longer satisfied with starchy rice, potatoes and beans, they have increased their consumption of fish, poultry, beef, and a wider variety of fruits and vegetables, and even alcoholic beverages. Of course they continue to adopt to the dubious growth of Western fast food restaurants too.

In my pursuit of 2008 value stocks that offer growth opportunities and safety too, I looked for companies that would benefit from these trends for many years. Looking at the five-year chart and the rapid jump in the stock price over the last six months I’ve to wonder if I’m making this pick at the tail end of a euphoric run or just getting in at the early stages of a long term trend. I choose to believe the latter.

People have to eat, and soybean products are not only a basic staple but they are becoming an integrated part of the vegan world, designer foods and special diets too. This seems like a very safe bet, and one “my pal Warren” might find just boring enough to invest in.

To find potential opportunities and verify my track record, read Chasing Value and Serious Money.

DISCLOSURE: I am an active investor. I don’t own shares of BG but may acquire shares at a future date.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

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Filed under: Competitive strategy, News Corp’B’ (NWS)

News Corp (NYSE:NWS) today announced that it will revamp its Fox Business Network lineup in response to recent viewership reports showing that Americans would rather undergo a cavity search than watch the shows.

Drawing upon inspiration from its successful Fox Entertainment division, we hear that a number of new programs are under consideration:

• Homer Nose Business — a “Simpsons” take on making ‘d’oh’ in the food and beverage industries, with field reporters Apu Nahasapeemapetilon, Jr. and Moe Szyslak.
• 24:00 Stocks — Kiefer Sutherland hosts a new studio show in which CEOs of tanking corporations are subjected to waterboarding and other pleasing non-torture interview techniques in order to extract crucial investor information.
• American Idle –The ‘idle rich’ report by Paris Hilton, featuring the latest expos

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Filed under: Competitive strategy, News Corp’B’ (NWS)

News Corp (NYSE:NWS) this day announced that it will revamp its Fox Business Network lineup in response to current viewership reports showing that Americans would rather undergo a cavity search than watch the shows.

Drawing upon inspiration from its successful Fox Entertainment division, we hear that a number of new programs are under consideration:

• Homer Nose Business — a “Simpsons” take on making ‘d’oh’ in the food and beverage industries, with field reporters Apu Nahasapeemapetilon, Jr. and Moe Szyslak.
• 24:00 Stocks — Kiefer Sutherland hosts a new studio show in which CEOs of tanking corporations are subjected to waterboarding and other entertaining non-torture interview techniques in order to extract crucial investor information.
• American Idle –The ‘idle rich’ report by Paris Hilton, featuring the latest expos

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Filed under: Competitive strategy, Valero Energy (VLO), Bargain stocks, Chasing Value, Oil, Stocks to Purchase, Ideal Stocks for 2008

If you do not own Valero Energy Corporation (NYSE: VLO) already, you were not listening last year when I was ranting and raving every month why this was a must-own stock. It was one of my favorites last year, remains one of my favorites now and looks to have an open road ahead of it in 2008.

Valero’s profit margins were squeezed in the second half of 2007 by high crude prices rising while pump prices were stable, but that is apt to change, and I think the stock can continue to appreciate significantly. It may not change fast , as the economy is going through some rough spots. Also, VLO, which is reporting earnings on January 29, may still have some lingering margin issues.

Last year this was one of my top picks and jumped 36%. I rarely make specific predictions as analysts tend to do, but I feel comfortable stating VLO can beat all the major indices. Everything I liked about Valero last year is still in play now, so I’m letting this winner ride.

I’ve no idea what Wall Street is thinking, but VLO still seems too cheap with a P/E of 8 (TTM), a P/S of 0.43 and still no one seems to be building any new refineries, except outside the United Says. Valero remains the largest independent refiner of heavy and lightweight crude in North America. This could hardly have changed since last year, given that it would take a decade to build a new refinery from scratch.

The five-year chart shows the 2007 ride. It looks to have faltered along with the overall market but never retreated to anywhere close to the entry point near fifty. VLO closed at $70.55 per share on December 28, 2007, our starting point for this journey.

I do not want to give anyone the impression that Valero is the screaming purchase it was last year at this time when the P/E was 5.8. However it continues to have some very favorable metrics like an ROE of 32%, ROA of 16% and a ROIC of 25% — very solid indeed. It has a P/B of 1.89 and pays a small dividend of 0.69%.

The chart indicates I purchased in near the low point over the last two years. The stock is about 12.5% off its 52-week high now, and I think it can reach a new high this year. Unless they start giving away the oil, this seems like a modest goal.

• Disclosure: I own shares of VLO

To find potential opportunities and verify my track record read Chasing Value or Serious Money.

Sheldon Liber is the CEO of a small private investment company and the design and research principal for an architecture & planning firm.

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Filed under: Consumer experience, Internet, Competitive strategy, Google (GOOG)

Google (NASDAQ: GOOG) had a very busy 2007 — initiatives and projects, product launches and a furious growth rate that kept analysts guessing each single quarter. With so much going on at the world’s most popular internet search engine, will Google lose focus on the bread-n-butter machine of its revenue — web searches?

If Google would pour as much focus and resources into all its products as it does the constant refinements it gives its search-related advertising, the company would have many revenue legs to stand on (most likely). However, Google has a history of launching products to see how they do before dedicating too many resources to it. After all, it took years for text advertising on Google searches to produce billions in quarterly revenue. The more products prove themselves, the more attention they get.

What other products from Google will get more and more attention in 2008? The New York Times states that Google could eventually control 80% to 90% of internet searches, up from today’s sub-70% level. Can Google really attain search engine growth to attain complete and utter domination of search?

If not, where are supplemental revenues going to come from? Google is lining up products to fill this void, but it can’t lose focus on its core search business, even for a nanosecond. To fuel all the growth and the large product launches from the company, the revenue will have to be there. Right now, that’s all search — and it must continue to be Google’s main focus in everything it does.

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