Top 5 ideas of the week:

 Berkshire Hathaway (BRK.B)

there are two other reasons why we hold a position in Berkshire Hathaway (BRK.B). The first reason is the capital allocation skills of Warren Buffett and the executive management team of Berkshire Hathaway’s businesses. This success has not only enabled Buffett to transform and transmogrify Berkshire Hathaway from a struggling textile manufacturer into the world’s premier investment holding company, it has made Warren Buffett a household name throughout the world. The second reason why we hold Berkshire is because of Buffett’s uncanny ability to mitigate Berkshire’s tax expenses, particularly Berkshire’s cash tax payments.

 Verizon Communications (VZ)

Although Verizon’s (VZ) yield is now 4.8%, we believe that Verizon is still fairly valued and investors should wait for 10%-20% pullback before taking a long position in the company due to the flat 2013 performance forecasts by its CEO Lowell McAdam.


SUPERVALU (SVU) and Cerberus have agreed to a deal in which SUPERVALU undoes the disastrous deal-from-hell known as the Albertsons Inc. acquisition.  SUPERVALU also sheds half of its crushing debt load.

 Nokia Corp (NOK)

While we think that Nokia’s (NOK) fundamental business operating performance probably can’t decline any further from its lows achieved in 2012 and while we believe that Nokia’s not likely to suffer a near-term bankruptcy, we believe that Nokia’s shares are benefiting from irrational exuberance.

 J.C. Penney (JCP)

We have been following J.C. Penney Company Inc. (JCP) off and on since 2011 because Bill Ackman had taken a position in JCP and because Ackman was influential in recruiting Ron Johnson away from Apple Retail (AAPL) in order to become JCP’s new CEO to succeed Myron Ullman, who was JCP’s CEO from 2004-2011.

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