Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (2740)	2/28/2011 1:10:40 PM
From: richardred	Respond to of 7256

I forgot to mention Hershey Foods as a target. I've already sold my position in the SITT portfolio awhile back. The Hershey trust owning a big block of stock. IMO the stock is already trading at a high multiple. IMO any potential Buffet offers would be limited to the low sixties. I'm looking to possible add General Mills to my potential takeover list.

To: richardred who wrote (2740)	3/3/2011 1:10:17 AM
From: richardred	Read Replies (1) \| Respond to of 7256

Five Companies Buffett Might Want To Acquire Forbes picks for Warren Illinois Tool Works Automatic Data Processing Kennametal Expeditors International of Washing.. .W.W. Grainger blogs.forbes.com

To: richardred who wrote (2740)	3/20/2011 10:20:06 PM
From: richardred	Respond to of 7256

Consumer-staples stocks are attractive: Barron's NEW YORK \| Sun Mar 20, 2011 6:20pm EDT NEW YORK (Reuters) - Consumer staples stocks have largely underperformed in recent years but could be good buys for investors looking for "ample cash flow, steady earnings growth, fabled brand names and generous dividends," Barron's financial newspaper said on Sunday. The paper recommended ten consumer-staples stocks: Colgate-Palmolive (CL.N), Procter & Gamble (PG.N), Clorox (CLX.N), General Mills (GIS.N), Kellogg (K.N), PepsiCo (PEP.N), Coca-Cola Enterprises (CCE.N), Molson Coors Brewing (TAP.N), Avon Products (AVP.N) and Campbell Soup (CPB.N). reuters.com

To: richardred who wrote (2740)	3/21/2011 10:32:01 AM
From: richardred	Read Replies (2) \| Respond to of 7256

8 Likely Buyout Targets to Consider Today 1 comment \| by: Investment Underground March 21, 2011 \| about: AVP, DPS, HANS, LO, PEET, STZ, UA, WPO With their recently announced deal to buy half of Yoplait, General Mills (GIS) has prompted rumors of further consolidation in the consumer durables sector. Looking forward, we at Investment Underground think the following stocks could be prime takeover candidates: Avon Products (AVP): Avon Products is a global manufacturer and marketer of beauty and related products. The three main categories that Avon operates in are beauty, fashion, and home products. They are also the world’s largest direct seller with more than $10 billion in annual revenue. AVP has a market cap of $11.43B, operating cash flow of $702M, and consistent quarterly dividends around $0.22 per share, making AVP a leader in personal products globally. Given AVP’s positioning in the personal products industry, Avon could be a prime takeover candidate for competitors such as The Estee Lauder Company (EL) or French conglomerate L'Oreal SA (LRLCY.PK) looking to expand their reach into the direct sales portion of the personal products market. Because AVP currently has one of the lowest operating margins in the sector (11.50%), competitors such as EL could view AVP as an attractive investment in hopes of increasing profitability. Constellation Brands (STZ): Constellation Brands, Inc. is a wine company with a market position in the United States, Canada, the United Kingdom, Australia and New Zealand. STZ has three core business segments: Constellation Wines (branded wine, spirits and other), Corporate Operations and Other, and Crown Imports (imported beer). Some of STZ’s largest brands include: SVEDKA vodka, Robert Mondavi wines, Arbor Mist, and Simi. Through a 50/50 joint venture with Grupo Modelo, STZ is positioned as a leading importer of premium beer in US, with a strong brand portfolio that includes: Corona, Modelo, Pacifico, and St. Pauli Girl. STZ has a market cap of $3.85B, operating cash flow of $582.8M, and currently trades at a 19.38 P/E multiple. STZ could be a potential target for Diageo (DEO) given STZ’s strong wine portfolio and lucrative joint beer venture with Grupo Modelo. Diageo is currently the world’s leading producer of spirits, but buying a company with strong exposure to the wine and beer categories such as STZ would allow DEO to expand their market presence in the alcoholic beverages industry. Lorillard (LO): Lorillard is a manufacturer of cigarettes in the US. LO’s most popular product by far is their Newport line of menthol flavored cigarettes, which comprise a 35% market share of all menthol cigarettes sold in the US, although LO does manufacture other brands including: Kent, True, Maverick, and Old Gold. Lorillard has a $12.68B market cap, which makes it one of the smallest tobacco manufacturers in the US. LO has the highest operating margin in the industry at 29.14%, an operating cash flow of $1.09B, and pays a $1.12 dividend. LO could be a potential LBO target of tobacco conglomerate Altria (MO), given LO’s consistent cash flows, and the FDA’s decision to not ban menthol cigarettes last Friday. Dr. Pepper Snapple Group (DPS): Dr Pepper Snapple Group, Inc. is an integrated brand owner, manufacturer and distributor of non-alcoholic beverages in the United States, Canada and Mexico. Some of DPS’ brands include: Dr. Pepper, 7UP, Snapple, Mott’s, Hawaiian Punch, and Clamato. Currently, half of DPS’ annual volume is distributed through a company-owned bottling and distribution network, with the remaining volume divided among Coca-Cola, Pepsi, and independent third-party distributers. DPS has a market cap of $8.48B, has an operating cash flow of $2.54B, and pays a $0.25 dividend. Due to DPS’ 40.4% market share of non-cola carbonated soft drinks, DPS is a strong potential takeover target of industry titans Coca-Cola (KO) and PepsiCo (PEP). Hansen Natural (HANS): Hansen Natural Corporation is a holding company that, through its subsidiaries, develops, markets, sells and distributes products in the alternative beverage category which includes: natural sodas, fruit juices, juice drinks, energy drinks and energy sports drinks. HANS has a market cap of $4.93B, operating cash flows of $229M, and trades at a 24.28 P/E multiple. HANS is particularly lucrative target, as it has $599M in cash on its balance sheet with only $274k in debt. HANS is situated in a similar position as DPS with regards to potential takeover candidates, which include KO and PEP. Under Armour (UA): Under Armour is a relative newcomer to the performance apparel and gear industry that pioneered an immensely popular compression and perspiration wicking fabric that is widely used by both professional athletes and the general public. UA now competes with industry staples Nike, Reebok, and Adidas. UA has a market cap of $3.24B, operating cash flows of $50.11M, and trades at a 47.64 P/E multiple. Due to UA’s competitive operating margin of 11.68%, and $203M cash on its balance sheet compared with only $15.9M of debt, UA could be a potential takeover target of rival Nike (NKE), who currently holds $4.79B of cash on its balance sheet and could greatly benefit through the acquisition of UA branded products. Peet's Coffee & Tea (PEET): Peet's Coffee & Tea, Inc. is a specialty coffee roaster and marketer of fresh roasted whole bean coffee and tea. The Company sells its coffee through multiple channels of distribution, including grocery stores, home delivery, office, restaurant and food service accounts and Company-owned and operated stores in six states. PEET has a market cap of $617M, operating cash flows of $24.76M, and trades at a 37.5 P/E multiple. Given the recent announcement of a Starbuck’s (SBUX) and Green Mountain Coffee (GMCR) partnership to provide Starbuck’s coffee in GMCR’s k-cup home brewing station, there has been pressure on PEET to team up if possible. Additionally, there have been rumors of a Starbuck’s buyout to provide PEET products in grocery stores and single-serve coffee dispensers. Washington Post (WPO): The Washington Post Company is a diversified education and media company. The company’s Kaplan, Inc. subsidiary provides a variety of educational services, both domestically and outside the United States. WPO’s newsprint holdings are concentrated in their flagship Washington Post newspaper, but WPO also has magazine holdings in Newsweek, and operates six television broadcast stations. WPO has a market cap of $3.55B, pays a dividend of $2.35/share, and has operating cash flows of $693M. There have been talks of WPO selling off divisions, or possible selling the company to a private equity buyer. Due to Goldman Sachs (GS) holding a 40% stake in Education Management Corporation (EDMC), possible buyout candidates for WPO may include other prominent investment banks such as JP Morgan (JPM) or Barclays PLC (BCS) in an effort to gain a piece of this increasingly profitable industry. Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. seekingalpha.com

To: richardred who wrote (2740)	3/29/2011 1:13:44 PM
From: richardred	Respond to of 7256

Thank Avon Ladies For AVP’s Upcoming 33% Gain Mar. 29 2011 - 12:06 pm Posted by Trefis Team Lady Gaga is not an Avon lady What differentiates Avon from other beauty and personal care players such as L’Oreal, Procter & Gamble, Estee Lauder and Unilever is not what it sells but how it sells. It’s the sellers, not the buyers, that drive Avon’s stock value. Avon is the largest direct selling organization in the world, with over 6.2 million sales representative generating annual revenues of nearly $11 billion in 2010. Avon sells everything from shower-gels to watches to nutritional supplements. While others sell their products through third party establishments like drugstores or mass volume retailers (think Wal-Mart), Avon sells its products directly to the final consumer. Avon’s sales representatives are independent contractors that pitch Avon’s products to consumers and, upon receiving an order, buy the product from Avon at a discount and earn the difference. Direct selling brings Avon closer to the consumer. When a sales representative visits a household, she gets access to the consumer’s other personal and home-related requirements. This explains why Avon has such a diverse portfolio of unrelated products, as it allows the company to generate more sales per consumer visit. Since a higher number of sales representatives leads to higher sales totals, it is actually the number of sales representatives that drives Avon’s stock value. How Does Avon’s Seller-Driven Model Shape The Business? Resistance to Economic Downturns: During the economic downturn in 2007-08, year-on-year growth in the number of sale representatives increased from 2% in 2007 to 7% in 2008 as people looked for alternative source of earnings amidst rising unemployment levels. Thus, when the global economy was heading for a recession, Avon posted a 13% rise in revenues in 2007 and 8% in 2008. Impact of the Size of its Sales Force: We currently estimate a moderate 2% annual rise in the number of Avon sales representatives through our forecast period (from about 6 million in 2010), and our $36.60 price estimate for Avon stock remains notably sensitive to this metric. If, for example, Avon’s sales representative total were to instead rise by 3% annually, it would imply 6% upside to our price estimate. As it stands, our $36.60 price estimate is already about 30% above the stock’s market price. You can test your own assumptions for Avon’s sales representatives total, and see how various scenarios affect the company’s stock value, by dragging the trend line in the interactive chart above. blogs.forbes.com

To: richardred who wrote (2740)	10/13/2011 2:02:41 AM
From: richardred	Read Replies (1) \| Respond to of 7256

Just picked up a case of Campbells Chicken Noodle at Topps. Just .50 cent a can, down from a buck regular price. Now that's a deal. To bad Andy wasn't around to update his painting with self opening lids.

To: richardred who wrote (2740)	2/25/2012 11:49:05 AM
From: richardred	Respond to of 7256

Buffett Says He’s ‘On the Prowl’ for Large Acquisitions to Build Berkshire By Andrew Frye - Feb 25, 2012 11:38 AM ET Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. (BRK/A), said he’s “on the prowl” for large acquisitions after railroad, energy and some manufacturing subsidiaries posted record earnings in 2011. Berkshire is seeking “to purchase some large operations that will give us a further boost,” Buffett said today in his annual letter to shareholders. “We now have eight subsidiaries that would each be included in the Fortune 500 were they stand- alone companies. That leaves only 492 to go. My task is clear, and I’m on the prowl.” Buffett, 81, has spent more than $35 billion on takeovers since the end of 2009 as operating units generated cash. The billionaire investor, who doesn’t pay dividends to Berkshire shareholders, bought a maker of engine additives in September and a railroad in 2010. Buffett is focusing on acquisitions and buying publicly traded stocks because current yields on bonds, he said, aren’t enough to compensate for the risk of inflation. Bonds and other bets tied to currencies are “among the most dangerous of assets,” Buffett said. Interest rates “do not come close to offsetting the purchasing-power risk that investors assume.” Buffett’s letters are reviewed by investors for insight into his views on the economy, markets and corporate governance. Since last year’s letter, Buffett invested $5 billion in Bank of America Corp. and took a stake of more than $10 billion in International Business Machines Corp. Lubrizol Corp., the engine additives maker, was acquired for about $9 billion. Burlington Northern Operating earnings last year rose to records at each of Berkshire’s five biggest non-insurance units. Railroad Burlington Northern Santa Fe, toolmaker Iscar Metalworking, Lubrizol, industrial conglomerate Marmon Group and power producer MidAmerican Energy Holdings (329802Q) produced pretax profit of more than $9 billion. “Unless the economy weakens in 2012, each of our fabulous five should again set a record, with aggregate earnings comfortably topping $10 billion,” Buffett said. Berkshire bought MidAmerican in 2000, Iscar in 2006 and Marmon in 2008 as Buffett made the company less reliant on insurance operations. Employment (USURTOT) in the U.S. hasn’t kept pace with a “steady and substantial comeback” in the economy, according to the billionaire. The housing industry “remains in a depression” and his prediction last year on the timing of a recovery in residential property was “dead wrong,” Buffett said. In February 2011, Buffett said the rebound would start “within a year or so.” Housing ‘Depression’ This “hugely important sector of the economy, which includes not only construction but everything that feeds off of it, remains in a depression of its own,” Buffett said. “I believe this is the major reason a recovery in employment has so severely lagged the steady and substantial comeback we have seen in almost all other sectors of our economy.” Pretax profit in 2011 at Berkshire’s carpet-maker Shaw, insulation provider Johns Manville, Acme Brick and MiTek, a maker of building products, was $513 million, “similar to 2010,” Buffett said. That compares with $1.8 billion in 2006. “Our housing-related companies sputter,” Buffett said. Employment at these Berkshire units has dropped to 43,315 from 58,769 in 2006. Buffett said Bank of America will need years to clean up the “huge mistakes” made by the company’s management prior to Brian Moynihan’s promotion to CEO in January 2010. Moynihan has made “excellent progress,” Buffett said, as he works to move beyond losses tied to home loans. Buffett said he had sympathy, in some cases, for lenders hurt by foreclosures. ‘Big Mistake’ “Large numbers of people who have ‘lost’ their house through foreclosure have actually realized a profit because they carried out refinancings earlier that gave them cash in excess of their cost,” Buffett said. “In these cases, the evicted homeowner was the winner, and the victim was the lender.” Buffett said he made a “big mistake” a few years ago when he spent about $2 billion buying bonds in Energy Future Holdings Corp., the Texas utility formerly called TXU Corp. Berkshire wrote down the holdings by $1 billion in 2010 and $390 million last year as natural gas prices declined. The bonds are now carried by Berkshire at their market value of $878 million. “If gas prices remain at present levels, we will likely face a further loss, perhaps in an amount that will virtually wipe out our current carrying value,” Buffett said. “Conversely, a substantial increase in gas prices might allow us to recoup some, or even all, of our write-down. However things turn out, I totally miscalculated the gain/loss probabilities when I purchased the bonds.” Succession Planning Buffett and Vice Chairman Charles Munger, 88, are preparing Berkshire for its next generation of leaders. The company has hired Todd Combs and Ted Weschler to help manage investments, and directors have selected a candidate to take over as CEO, Buffett said in the letter, without identifying the manager. The board is “enthusiastic about my successor as CEO, an individual to whom they have had a great deal of exposure and whose managerial and human qualities they admire,” Buffett said. “Do not, however, infer from this discussion that Charlie and I are going anywhere; we continue to be in excellent health, and we love what we do.” Berkshire has two “superb back-up candidates,” Buffett said. Last year, before the departure of energy executive David Sokol, Berkshire said it had identified four company managers as possible CEO successors and that one had been singled out “should a replacement be needed currently.” Berkshire began buying back stock for the first time under Buffett last year as the billionaire bet the shares were undervalued. The company slumped 4.7 percent in 2011 in New York trading while the Standard & Poor’s 500 Index was little changed. Berkshire has climbed 4.6 percent since Dec. 31, while the S&P 500 jumped 8.6 percent. bloomberg.com

To: richardred who wrote (2740)	10/24/2012 10:31:27 AM
From: richardred	Respond to of 7256

The Buffett wait continues on. Buffett hunting for big acquisition for BerkshireWarren Buffett says he still wants to find another big acquisition for Berkshire Hathaway Associated Press – 1 hour 24 minutes ago OMAHA, Neb. (AP) -- Billionaire investor Warren Buffett says he continues looking for a major acquisition for his Berkshire Hathaway, but he's not willing to pay more to compete with other bidders. Buffett says Berkshire has lost out on a couple of major acquisitions in recent years because private equity firms are bidding aggressively with borrowed money. Berkshire doesn't borrow for acquisitions. The Berkshire chairman and CEO said Wednesday during an interview on CNBC that Berkshire has about $40 billion cash on hand currently. Buffett says that Berkshire has made about 15 smaller acquisitions this year. He calls those bolt-on acquisitions because they are just added to Berkshire's existing businesses. He also says he has added to Berkshire's Wells Fargo and IBM stock investments this year, but he'd still prefer to make a big acquisition.

To: richardred who wrote (2740)	11/30/2012 11:16:06 AM
From: richardred	Read Replies (2) \| Respond to of 7256

Sold two of my iconic brand names today. CPB & GIS to lock up the dividends made already, and moderate stock appreciation. I'm looking at some other dividend stocks to replace these.

To: richardred who wrote (2740)	12/17/2013 11:51:52 AM
From: richardred	Respond to of 7256

Sold position awhile back. Campbell Seen as Next Buffett Target Post-Heinz: Real M&A.Campbell Soup Co. ( CPB:US), the maker of Goldfish crackers and chicken noodle soup, may be next on acquirers’ grocery lists after the $29 billion takeover of H.J. Heinz Co. this year. Campbell options contracts surged this month amid speculation the $13 billion company could attract takeover interest. After 3G Capital and Berkshire Hathaway Inc. ( A:US) agreed in February to buy ketchup maker Heinz, investors are eyeing Campbell as the next big target in the packaged food industry, said Edward Jones & Co. Investment firm 3G may be interested because of the benefits of combining Heinz’s and Campbell’s vegetable processing, and Warren Buffett’s Berkshire could help bankroll a deal again, Sanford C. Bernstein & Co. said. Like Heinz, Campbell has a strong brand, which may appeal to other food makers and financial buyers, said S&P Capital IQ. Even as Campbell faces slowing sales of its iconic soups as consumers turn to fresher foods and competing brands such as Progresso, the company still offers a buyer the biggest share of the soup market at 22 percent. While a takeover would need approval from family members owning more than 40 percent of Campbell’s shares ( CPB:US), the company also is more affordable than 70 percent of food-manufacturing peers based on its price-earnings ratio, according to data compiled by Bloomberg. Video: Campbell Soup Seen as Next Course for Buffett Campbell has “obviously got some brands that are really worthwhile,” Jack Russo, a St. Louis-based analyst at Edward Jones, said in a phone interview. After the acquisition of Heinz, “investors tend to think where there’s one, there could be two or three” deals. Soup Decline Carla Burigatto, a spokeswoman for Camden, New Jersey-based Campbell, declined to comment on a potential sale of the company. A representative for 3G declined to comment, and Buffett didn’t respond to a request for comment sent to an assistant. A month ago, Campbell reported a decline in first-quarter soup sales and said profit for the year ending in July will be less than previously forecast ( CPB:US). Amid market-share losses to rivals such as Progresso-maker General Mills Inc. ( GIS:US), Campbell has been focusing on bolstering its beverage division. Story: The German Economics of Chicken Foot Soup Campbell has made acquisitions since 2011 to catch up with shifting consumer preferences, including the purchases of juice maker Bolthouse Farms and baby food purveyor Plum Organics. After Berkshire and 3G announced the acquisition of Heinz on Feb. 14, shares of Campbell advanced along with other consumer stocks such as General Mills and J.M. Smucker Co. Campbell rose as much as 6.2 percent that day for the biggest intraday gain since 2008. Buffett, 3G One thing that drew Buffett and 3G to Heinz was the opportunity to use the acquisition “as a platform to sort of get bigger around the global food industry,” Bill Johnson, former chief executive officer of the ketchup maker, said during a February conference call. Story: Dear Ma, Dear Pa: Welcome Back ... Watch Your Back If 3G is seeking to increase its foothold in packaged foods, Campbell “would definitely be next on the list,” Alexia Howard, a New York-based analyst at Bernstein, said in a phone interview. “Heinz’s big businesses are largely vegetable-based. Obviously, they’ve got tomato ketchup here in the U.S., and in the U.K., they’ve got a soup business that’s actually very like Campbell’s. There probably would be a lot of benefits on the vegetable procurement front.” Campbell saw record volume Dec. 6 in a series of bullish options ( CPB:US) that will pay off if the stock advances more than 5 percent by the end of this week. More than 20,000 contracts of $43 December calls changed hands that day, compared with an average daily volume of about 60, data compiled by Bloomberg show. ‘Classic Example’ Henry Schwartz, president of Trade Alert LLC, a New York-based provider of options-market data and analytics, said it was “a classic example of what takeover speculation looks like in the options market.” Story: A Lucrative Promise for India's Men: Whiter Skin While 3G likely lacks the financial resources to acquire Campbell on its own as it digests the Heinz takeover, Buffett could use his deep pockets ( B:US) to help fund a deal sooner, Howard said. Berkshire also already owns candy maker See’s Candies, and helped finance the purchase of Wm. Wrigley Jr. Co. by Mars Inc. in 2008. Buffett has praised the business model of turning commodity ingredients into premium-priced products. businessweek.com