Investment Ideas of the Week 12-10-12
Top 5 ideas of the week:
We recommend Discovery Communications Inc (NASDAQ DISCK) as a Strong Buy based on strong revenue and profit growth from scientific, educational and non-fiction media content business and ample free cash flows, Fair Value Price of $64.90 per share.
Ever since the May 9th announcement by Hilltop Holdings that it was acquiring PlainsCapital Corporation, we have been eagerly counting down the days towards when the deal will close. We even published a comprehensive research report analyzing and evaluating PlainsCapital and Hilltop, as well as the merger deal itself.
The well-known, well respected bond fund manager Daniel Fuss of Loomis Sayles and his team has nearly $408M in SVU debt. Fuss and his team have $70M of SVU’s Real Estate Term Loan and $338M in SVU’s New Albertsons debt.
We have been long Berkshire Hathaway (BRK.B, BRK.A) since early last year. We took a stake in Lee Enterprises (LEE) this year because of Warren Buffett’s $85M investment in Lee’s 2nd Lien Term Loans earlier this year. We think that investors overreacted to the news that Berkshire sold out of its position by taking the stock down by over 20.5% the day after Berkshire’s 13-F Form was filed.
We have recently completed three reports analyzing and evaluating Pitney Bowes Inc (PBI). We considered investing in it in August but refrained from doing so. Because the company is a well-known cash cow and because it has a high dividend yield, it would be foolhardy to keep it on our pay no mind list.