Wall Street Watch: Warren Buffet’s Heir to the Throne, China 2030
On Saturday in his annual investor letter, Warren Buffet said he has found a successor for Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB), but the person remained unnamed. Buffett does not have immediate plans to retire. He said he expects a “seamless” transition, but whether or not the new leader will keep shareholders happy post-Buffett is yet to be seen.
Berkshire also reported its fourth quarter earnings and said its profit dropped 30 percent to $3.05 billion ($1,846 per share) due to declining gains from its derivatives portfolio. Berkshire’s cash increased to $37.3 billion on Dec. 31, up from $34.8 billion from the third quarter’s end.
Over the weekend, G-20 officials met in Mexico City and discussed various topics about the global economy. They included potentially rising oil prices and their effect on the global recovery and changes to the Volcker Rule, which bans the proprietary trading of foreign sovereign debt. The group delayed taking any action for international support of Europe and plan to discuss it at their next meeting in April.
In a research report called, “China 2030” created by a group from the World Bank and the Development Research Center of China’s State Council, it laid out steps for the country to address its risks over the next 20 years. This included a potential hard landing in the short term, an ageing and diminishing workforce, increasing inequality, environmental concerns and outside imbalances. The report also emphasized that in order for China to have a feasible expansion economically, the government’s role needs to be redefined; state-owned enterprises should decrease and markets should set interest rates.
HSBC Holdings PLC (NYSE:HBC) reported an annual profit of GBP 13.8 billion, up 15 percent thanks to a year of “major progress.” The company’s commercial banking unit saw a record year with its pretax profit rising almost 31 percent to GBP 5 billion. The fast-growing markets of Asia, Latin America, the Middle East and North Africa accounted for 49 percent of group revenue. The company declared a 2011 dividend of $0.41, a rise of 14 percent.
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7 Buzzing Stocks: Motorola and Netflix Drop 4%, While Ariba Jumps After Upgrade
Shares of Ariba Inc. (NASDAQ:ARBA) jumped 1.3 percent in early trading. The company received an upgrade to conviction buy from neutral at Goldman Sachs (NYSE:GS). Analysts attributed the upgrade to improved fundamentals and margins.
Lowe’s Companies Inc. (NYSE:LOW) shares increased 1.5 percent before the opening bell. The home improvement company reported fourth quarter net income of $322 million (26 cents per share), compared to $285 million (21 cents per share) a year earlier. Shares of Home Depot Inc. (NYSE:HD) edged slightly lower in morning trading.
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Motorola Solutions Inc. (NYSE:MSI) shares fell more than 4 percent early Monday. The company announced it bought 23.7 million of its shares from Carl Icahn for $49.15 each, totaling $1.17 billion.
Sprint Nextel Corp. (NYSE:S) shares dropped 1.2 percent after announcing plans to offer around $2 billion in aggregate principal amount of notes due 2020 and 2017. The company plans to use the net proceeds for general corporate purposes such as servicing outstanding debt.
Shares of Netflix Inc. (NASDAQ:NFLX) declined 4 percent after receiving a downgrade from Raymond James to underperform from market perform.
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Bank of America, Charter, Cooper Tire & Rubber, Visteon High Demand Stock Movers Feb. 27th
Bank of America Corporation (NYSE:BAC): So far, Bank of America Corp is alone in its decision not to sell mortgage loans to Fannie Mae (FNMA), which could result in the bank charging less attractive mortgage rates, reports Reuters. Well Fargo’s (NYSE:WFC) CEO John Stumpf says hes committed to expanding the company’s wealth management and insurance divisions through acquisitions, as well as potentially buying more assets from European banks that are divesting, reported Financial Times. Also, Warren Buffett said on CNBC this morning, “Bank of America CEO doing exactly what I would do.” Shares of Bank of America Corporation are trading 1.76% lower today.
Charter Communications, Inc. (NASDAQ:CHTR): Reported Q4 Internet revenue $442M; Q4 telephone revenue $217M; Q4 commercial revenue $157M. Shares of Charter Communications, Inc. are trading 0.79% lower today.
Cooper Tire & Rubber Company (NYSE:CTB): Reported Q4 revenue $1.05B, consensus $1.02B. Results on $2.66/sh gain related to valuation allowance. And, on a 16c/sh gain related to tax expense reversal. Shares of Cooper Tire & Rubber Company are trading 9.96% higher today.
Visteon Corporation (NYSE:VC): Reported Q4 revenue $1.86B, consensus $1.88B. Latest Q4 includes $66M noncash impairment charge. Shares of Visteon Corporation are trading 0.17% higher today.
Lowe’s, Tibet Pharma, Cheniere, Dendreon Stocks Attracting Trader Demand Feb. 27th
Lowe’s Companies, Inc. (NYSE:LOW): On the Q4 conference call, Lowe’s exec says consumers increasingly shopping across channels. The company also says well positioned to drive SSS growth in 2012. Shares of Lowe’s Companies, Inc. are trading 3.06% higher today.
Tibet Pharmaceuticals, Inc. (NASDAQ:TBET): CEO Hong Yu said, “In view of market bias towards Chinese companies listed in U.S. stock exchange and our past stock performance, I hereby make an offer to purchase TBET stocks not owned by me for $3.00 per share in cash.” The company also responded to responded to an unnamed website regarding its entity’s assets. Yu continued, “In recent days, we noticed thata website mentioned about auctioning our operating entity’s assets. These wereuntrue and incorrect announcements. Our company is in normal business operation. We’re conducting our investigation on this mistaken report, and will keep our investors informed onthe investigation result.” Shares of Tibet Pharmaceuticals, Inc. are trading 193.19% higher today.
Cheniere Energy, Inc. (NYSEAMEX:LNG): Cheniere Energy (AMEX:LNG) shares are jumping 20% to $16.99 after Cheniere Energy Partners (AMEX:CQP) confirmed that it has entered into an arrangement with Blackstone (NYSE:BX) under which Blackstone would purchase newly issued CQP Senior Subordinated Paid-in-Kind Units for $2B. CQP said it would use the proceeds to fund the developing, constructing and placing into service its Sabine Pass liquefaction project being developed at the Sabine Pass LNG terminal, the purchase of the Creole Trail pipeline from Cheniere Energy and other partnership business purposes. Shares of Cheniere Energy, Inc. are trading 10.46% higher today.
Dendreon Corporation (NASDAQ:DNDN): Reports Q4 revenue $202.15M, consensus $120.8M. Q4 included a royalty payment of $125M associated with the sale of its VICTRELIS royalty interest. Shares of Dendreon Corporation are trading 13.93% lower today.
Market Recap: Stocks Flat Despite Positive Housing Report
Markets closed mixed on Wall Street today: Dow -0.01%, S&P +0.14%, Nasdaq +0.08%, Oil -1.80%, Gold -0.43%.
On the commodities front, Oil (NYSE:USO) fell to $107.79 a barrel. Precious metals were mixed, with Gold (NYSE:GLD) falling to $1,768.70 an ounce while Silver (NYSE:SLV) rose 0.20% to settle at $35.49.
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Today’s markets were mixed because:
1) Housing. More Americans signed contracts to buy homes last month as the economy added jobs at a quicker pace, home prices continued to fall, and borrowing costs remained near record lows. Pending home sales were up 2 percent in January after a 1.9 percent decrease the previous month that was smaller than originally estimated, the National Association of Realtors said today in Washington.
2) Europe. All three indexes started in the red today after global financial ministers said over the weekend that European Union leaders need to strengthen their own financial firewalls before other nations agree to back more money for the International Monetary Fund. However, stocks got a boost after the German Parliament approved the nation’s contribution to a Greece’s second 130 billion-euro bailout, as expected. Finland and the Netherlands are also expected to back the bailout this week.
3) Companies. Transocean (NYSE:RIG) booked a $6.1 billion loss, though mostly on one-time charges, including a $1 billion estimated loss on the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, but shares were up today because the company reported an 11 percent jump in revenue during the last quarter, beating expectations. Motorola Solutions (NYSE:MSI) shares were also up after it said it bought back $1.2 billion in stock from activist investor Carl Icahn and affiliates.
7 Radar Stocks: Priceline Flys 6% Higher, While SINA and URS Drop
After hitting a fresh 52-week high in regular trading hours, shares of Priceline.com Inc. (NASDAQ:PCLN) surged 6.25 percent in late trading. The company reported profits of $226 million for the fourth quarter, compared to $135.7 million a year earlier.
SINA Corp. (NASDAQ:SINA) shares fell almost 4 percent after the closing bell. The company reported net earnings of $9 million (14 cents per share). However, analysts were expecting 16 cents per share. “SINA’s online brand advertising grew 27% to a historical high in 2011. The strong results of SINA’s brand advertising business have enabled SINA to make significant investments in Weibo.com. During the fourth quarter, the popularity of Weibo.com continued to grow, especially in the mobile and tablet space, where usage now exceeds those via personal computers,” said Charles Chao, CEO of SINA.
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St Joe Co. (NYSE:JOE) shares edged lower after reporting fourth quarter results. The company reported a loss of $328.6 million, compared to a loss of $2.7 million in the same quarter a year earlier.
Shares of Wells Fargo & Co. (NYSE:WFC) fell slightly in late trading, after closing nearly 3 percent higher on Monday. Berkshire’s (NYSE:BRKB) Warren Buffett announced in an interview that if he had to own only one bank stock, it would probably be Wells Fargo. Buffett also announced a personal stake in J.P. Morgan (NYSE:JPM).
URS Corp. (NYSE:URS) shares dropped .50 percent after reporting a lower net income in the fourth quarter. The company earned $28.4 million (37 cents per share), compared to $60 million (75 cents per share) a year earlier.
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