Warren Buffett’s Annual Letter: Mistakes, Buybacks and Apple
Warren Buffett published his annual letter to shareholders over the weekend. The annual update, which has become one of the largest events in the calendar for value investors, provided Buffett's views on one of the most turbulent and extraordinary years for the financial markets in recent memory. Q4 2020 hedge fund letters, conferences and more Read More
- US: Dow: 13208.00 (0.32%), S&P 500: 1405.87 (0.22%), NASDAQ: 3020.86 (0.07%)
- Europe: CAC: 3435.62 (-0.61%), DAX: 6944.56 (-0.29%), FTSE: 5847.11 (-0.08%).
- Asia-Pacific: Australia: 4277.30 (-0.72%), China: 2168.81 (-0.24%), Hong Kong: 20136.12 (-0.66%), India: 5320.40 (-0.05%), Japan: 8891.44 (-0.98%).
- Metals: Gold: 1622.80 (0.16%), Silver: 28.06 (-0.12%), Copper: 3.39 (-0.95%)
- Energy: Crude Oil: 92.87 (-0.52%), Natural Gas: 2.77 (-5.94%)
- Commodities: Corn: 8.09 (-1.76%), Soya Bean: 16.43 (0.77%), Wheat: 9.01 (-2.78%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2290 (0.12%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5691 (-0.33%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.2750 (-0.38%)
- 10 year US Treasury: 1.657% (-0.031)
Market and Economy News Update
U.S. markets end higher: U.S. markets rallied in the final minutes of trade to close higher on Friday as investors shrugged off a disappointing Chinese trade report. The Dow Jones Industrial Average (INDEXDJX:.DJI) rose 42.76 points, or 0.32 percent, to close at 13,207.95. The S&P 500 (INDEXSP:.INX) edged up 3.07 points, or 0.22 percent, to finish at 1,405.87, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) squeezed out a gain of 2.22 points, or 0.07 percent, to end at 3,020.86. For the week, the Dow gained 0.8 percent while the S&P 500 and NASDAQ were both up more than 1 percent. This was the fifth straight winning week for the Dow and the S&P 500.
Oil prices fall: Oil prices declined on Friday amid a fall in Chinese crude oil imports in July, and forecast from the International Energy Agency for weaker global oil demand. Crude oil for September delivery fell 0.5 percent, to settle at $92.57 a barrel on the New York Mercantile Exchange. Brent oil for September settlement rose 0.3 percent to $113.50 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- Apple Inc. (NASDAQ:AAPL) sold 8.34 million iPhones in the U.S. in fiscal third-quarter, a court filing related to its trial against Samsung Electronics showed today.
- Facebook Inc (NASDAQ:FB) moved 3.8 percent higher after board member Reed Hastings bought nearly 50 thousand shares at an average price of $21.03 a share, and a report showed that time spent on its website grew nearly 10 percent last month.
- Swiss money manager Julius Baer is reportedly close to a deal to buy Bank of America Merrill Lynch’s non-U.S. wealth management business, and an announcement is expected to come as early as Monday.
- The U.S. Justice Department said it will not bring criminal charges against Goldman Sachs Group, Inc. (NYSE:GS) or its employees related to allegations by a Senate panel that the bank bet against the same subprime mortgage securities it was selling to clients. Separately, Goldman Sachs Group, Inc. (NYSE:GS) will sell Japanese construction company Fujita Corp to home builder Daiwa House Industry Co Ltd (TYO:1925) for 50 billion yen ($636 million), Reuters reported.
- Asset manager Janus Capital Group Inc. (NYSE:JNS) ended 10 percent higher after it entered into a partnership with Dai-ichi Life Insurance Co Ltd (TYO:8750), Japan’s largest listed life insurer, under which Dai-ichi will invest $2 billion of its general-account assets with the money manager, and acquire up to a 20 percent stake in the company.
- Monster Beverage Corp (NASDAQ:MNST) plunged 11.3 percent after the country’s biggest energy drink maker disclosed that it was being investigated by an unidentified state attorney general for its advertising practices and ingredients.
- Cisco Systems, Inc. (NASDAQ:CSCO) fell 0.9 percent after an analyst at Lazard Capital Markets LLC said the outlook for the networking-equipment bellwether may be worse than previously estimated.
- The Boeing Company (NYSE:BA) has named company veteran John Wojick as head of global sales for its commercial aircraft business. Wojick was formerly the head of North American sales at the planemaker.
- PNC Financial Services (NYSE:PNC) holds a passive 10.32 percent stake in alcoholic drink maker Brown-Forman Corporation (NYSE:BF.B), worth $810.9 million, making it the company’s largest shareholder.
- Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) reported a second-quarter net loss of $22.1 million or 12 cents per share, on revenue of $21.98. Analysts were expecting the biopharmaceutical company to report a loss of 7 cents per share $10.04 million in revenue.
- Payment and invoice service provider Bottomline Technologies (NASDAQ:EPAY) jumped 20.5 percent after reporting fourth-quarter adjusted earnings of 26 cents per share, on revenue of $61.4 million that beat the analysts’ estimates.
- Biofuels maker Codexis, Inc. (NASDAQ:CDXS) reported a wider second quarter loss, projected flat full-year pharmaceutical sales and said that it does not anticipate any further funding from partner Royal Dutch Shell plc (ADR) (NYSE:RDS.A) (LON:RDSA) after October 31 for research into converting biomass to fuel.
- Las Vegas-based gambling machine company Bally Technologies Inc. (NYSE:BYI) moved 6.3 percent higher after posting fourth-quarter earnings and revenue that beat Street estimates. The company said operating margin narrowed to 19.8 percent from 20.6 percent, due to a 16 percent rise in operating expenses.
- Semiconductor maker Spreadtrum Communications, Inc. (ADR) (NASDAQ:SPRD) ended 11.7 percent lower after reporting a 36 percent fall in second-quarter profit, providing current quarter revenue guidance that was lower than analysts’ expectations.
- Manchester United plc (NYSE:MANU) ended 0.4 percent lower at $14 in its market debut today, after raising $233 million in the largest initial public offer on record for a sports team.
Hedge Fund News Update
- Activist hedge fund manager Dan Loeb, who controls a 5.8 percent stake in Yahoo! Inc. (NASDAQ:YHOO), has supported Chief Executive Marissa Mayer’s decision to re-evaluate a plan to return the cash generated from the sale of its stake in Chinese internet company Alibaba, to shareholders, Reuters reported.
- Japan-focused hedge funds posted a decline of 1.5 percent in the second quarter of 2012, which comes on the back of gains of 5.2 percent during the first quarter, Hedge Fund Research reported. Hedge funds investing in China slid 1.6 percent, while those investing in India shed 8.4 percent. Korean funds were the biggest underperformer, losing a whopping 10.8 percent during the second quarter.
- Activist investor Carl Icahn has accused drugmaker Forest Laboratories, Inc. (NYSE:FRX) of hiding information from shareholders that might show it has built a poison pill into a licensing agreement it inked in 2004.
- Hedge fund administrator BNY Mellon’s Alternative Investment Services business has been named as the largest global administrator of alternative UCITS funds in a survey by Absolute UCITS publication.
- Currency-focused hedge funds returned 0.98 percent last month, rebounding from a loss in June, as fund managers benefited from a decline in the euro, according to Chicago-based Hedge Fund Research.
Brokerage Upgrades and Downgrades on Friday, August 10, 2012
- AG Mortgage Investment Trust Inc (NYSE:MITT) was upgraded to “buy” from “neutral” by analysts at Sterne Agee with a target price of $24.50.
- Broadcom Corporation (NASDAQ:BRCM) was raised to “outperform” from “market perform” by analysts at Sanford C. Bernstein.
- Cogent Communications Group, Inc. (NASDAQ:CCOI) was lifted to “neutral” from “underperform” by analysts at DA Davidson with a target price of $18.
- EnerNOC, Inc. (NASDAQ:ENOC) was raised to “buy” from “hold” by analysts at Capstone Invest.
- Graco Inc. (NYSE:GGG) was upgraded to “outperform” from “perform” by analysts at Oppenheimer with a target price of $58.
- Jive Software Inc (NASDAQ:JIVE) was raised to “buy” from “hold” by analysts at Needham & Company with a target price of $20.
- National Financial Partners Corp. (NYSE:NFP) was lifted to “buy” from “neutral” by analysts at Citigroup with a target price of $18.
- Northern Oil & Gas, Inc. (NYSEAMEX:NOG) was raised to “buy” from “accumulate” by analysts at Global Hunter Securities with a target price of $27.
- Semiconductor Manufacturing Int’l (ADR) (NYSE:SMI) was lifted to “overweight” from “neutral” by analysts at HSBC with a target price of $2.35.
- Siliconware Precision Industries (ADR) (NASDAQ:SPIL) was raised to “outperform” from “market perform” by analysts at Sanford C. Bernstein.
- Abraxas Petroleum Corp. (NASDAQ:AXAS) was downgraded to “hold” from “buy” by analysts at Wunderlich with a target price of $3.
- Advance Auto Parts, Inc. (NYSE:AAP) was lowered to “neutral” from “outperform” by analysts at Credit Suisse with a target price of $75.
- Brinker International, Inc. (NYSE:EAT) was downgraded to “market perform” from “outperform” at Raymond James.
- Codexis, Inc. (NASDAQ:CDXS) was cut to “neutral” from “outperform” by analysts at Credit Suisse with a target price of $4.
- Cablevision Systems Corporation (NYSE:CVC) was downgraded to “equal weight” from “overweight” at Barclays Capital.
- FXCM Inc (NYSE:FXCM) was lowered to “neutral” from “buy” by analysts at Citigroup.
- North American Energy Partners Inc. (USA) (NYSE:NOA) was cut to “equal weight” from “overweight” by analysts at Stephens.
- Robbins & Myers, Inc. (NYSE:RBN) was downgraded to “hold” from “buy” by analysts at Stifel Nicolaus.
- Roundy’s Inc (NYSE:RNDY) was downgraded by analysts at Jefferies Group from “buy” to “hold.”
- Spreadtrum Communications, Inc. (ADR) (NASDAQ:SPRD) was cut by analysts at Bank of America from “neutral” to “underperform” with a target price of $15.
- Ubiquiti Networks Inc (NASDAQ:UBNT) was lowered to “hold” from “buy” by analysts at Deutsche Bank with a target price of $12.