Warren Buffett's Best Stocks of 2013 Helping Him Beat DJIA/S&P500

2013 is yet another year getting off to a great start for stocks, and Berkshire Hathaway Inc. (NYSE: BRK-A) is actually outperforming the broad stock market so far in 2013. As of Tuesday, the S&P 500-tracking SPDR S&P 500 (NYSEMKT: SPY) is up about 6% and the DJIA-tracking SPDR Dow Jones Industrial Average (NYSEMKT: DIA) is up about 7%. With a 1% gain on Tuesday, Berkshire Hathaway Inc. (NYSE: BRK-A) A shares are up 9.3% and the Berkshire Hathaway Inc. (NYSE: BRK-B) B-shares are up by about 8.7%.

We have looked at the year-to-date performance of Warren Buffett's portfolio holdings of Berkshire Hathaway Inc. (NYSE: BRK-B) to see which stocks he has that are helping to drive gains so far in 2013.  We looked through all of Warren Buffett's top stock holdings to identify the biggest winners. What is so interesting today is that the actual Berkshire Hathaway shares are outperforming about 90% of the actual stock holdings that make up the Buffett and Berkshire investment portfolio.

We have included the purchase or sale transaction history of each pick. We have also provided color and the implied upside to the Thomson Reuters consensus (mean) price target objective.

Phillips 66 (NYSE: PSX) remains a relatively new holding for team Buffett but was kept steady last quarter at 27.1 million shares worth more than $1.65 billion. It is also Buffett's top stock in 2013 so far with gains of more than 15%. We expect that the way Mr. Buffett talked so positively about this oil refinery that he may add to the position ahead. We expect upside to the 1.6% dividend yield and this trades with more implied upside as the $61.30 price is short of the consensus analyst price target of $66.38.

Procter & Gamble (NYSE: PG) has been on fire in 2013 and shares have been hitting new 52-week highs and this DJIA consumer products giant is up about 13.5% so far in 2013. What is interesting is that Mr. Buffett had been lowering his stake and it had fallen by nearly half of its share amount down to 52.8 million shares. That number may be even lower ahead as Buffett tends to keep selling stocks he starts selling out of. If the position is somehow static, that position would be worth more than $4 billion. This hit a 52-week high on Tuesday above $76.50 and the consensus analyst price target is $78.75 with a 3% dividend yield as of now.

We have two runner-ups which we are not formally counting as Buffett's best performing stocks even though they have been in the holdings before. United Parcel Service, Inc. (NYSE: UPS) is technically the third best position in the Team Buffett portfolio, but there is just one small problem. This had been almost entirely eliminated down to 59,400 shares from 261,900 shares last quarter and versus 1.429 million shares two quarters ago. That being said, this 9% gain year to date is almost immaterial for Berkshire's $242 billion market cap. Ingersoll-Rand (NYSE: IR) is yet another one which would have been great had Buffett remained on its side, but he has sold out of that position in late 2012 as well. That is too bad as this was up 8% year to date in 2013.

source: dailyfinance.com

Barclays to Slash 3,700 Jobs Amid Cost Cutting

Barclays is axing at least 3,700 jobs and pruning its investment bank as its new boss put his stamp on the troubled British bank by aiming to cut 1.7 billion pounds ($2.7 billion) in annual costs and raise standards after a series of scandals.

The plans form part of an overhaul which Chief Executive Antony Jenkins hopes will convince a sceptical public that he can change a bank which has been dogged by controversy, including a $450 million fine for rigging Libor interbank lending rates.

"I understand the cynics and the sceptics out there, but cynics and sceptics never built anything. It will take years before people actually change their impression of us. I'm not daunted by that at all," Jenkins told BBC radio.

Jenkins is taking a harder line on pay and Barclays said it had cut the average bonus for its investment bankers to 54,100 pounds for last year, down 17 percent on the year. It will pay 1.85 billion pounds in bonuses, down 14 percent on the year.

Barclays said the job cuts will include 1,800 in corporate and investment banking and 1,900 in its European retail and business banking. Finance Director Chris Lucas said 1,600 of the investment bank cuts had already been made.

Jenkins plans to focus investment in Britain, the United States and Africa, and reduce the bank's presence in continental Europe and Asia.

That will include a scaling back of the investment bank's equities and advisory businesses in continental Europe and Asia. It will refocus its retail businesses in Italy, Spain, Portugal and France on mass affluent customers.

Jenkins, 51, has said he expects his plan, dubbed "Project Transform", to take five to 10 years to rebuild Barclays, and has told staff they should leave if they do not want to sign up to the new standards.

Barclays shares were up 4 percent by 0930 GMT, the best performer in a flat European banking index.



DIVIDEND LIFT

Jenkins aims to cut the bank's cost base to 16.8 billion pounds in 2015, excluding one-off costs to achieve that of 2.7 billion over the next three years, and lift its dividend to achieve a 30 percent payout ratio.

The bank will pay a dividend of 6.5 pence per share for 2012 from 6p in 2011, which analysts said was encouraging given that UK regulators are telling banks to conserve capital.

"We take this as a positive for the UK banks - the fact that a bank was allowed to increase its dividend in a backdrop where the Bank of England has been talking about capital holes in the UK banks," said Chira Barua, senior analyst at Sanford Bernstein.

Jenkins, a retail banker who was picked at the end of August to run the bank after his predecessor Bob Diamond was forced to quit, will unveil more details on his plan to media and investors later on Tuesday at London's Edwardian Royal Horticultural Halls.

He will reduce the balance sheet by cutting legacy assets. Barclays held 387 billion pounds in risk-weighted assets at the end of December, but that would be equivalent to 464 billion under stricter capital rules coming into force, and Jenkins said he aims to reduce that to 440 billion by the end of 2015.



CHANGING STANDARDS

Much of his focus has been on changing standards and culture that have been criticised as too lax after the bank's Libor fine, the mis-selling of products to millions of customers and investigations into whether Barclays provided enough disclosure in fundraisings from Middle East investors.

The Financial Services Authority and Serious Fraud Office are investigating certain commercial arrangements between Barclays and Qatari investors related to two 2008 fundraisings.

The bank confirmed it will close its controversial but profitable tax advisory business.

Jenkins' plan to keep but scale back the investment bank was expected, as it contributes more than half of group earnings.

Unveiling the strategic plan alongside annual results, the bank reported a 2012 pretax profit of 246 million pounds, down from 5.9 billion in 2011 due to the cost of compensating customers and losses on the value of its own debt.

However, the bank said its adjusted pretax profit for 2012 was 7.05 billion pounds, up 26 percent on the year and in line with the average forecast by analysts.

Pretax profit at the investment bank rose by 37 percent to 4.1 billion pounds, stronger than expected. Income in the investment bank was down 2 percent from the previous quarter, but up 13 percent on a year ago, with fixed income, equities and advisory arms all up.

The bank said it had a good January. "We've had a good start to the year, pretty much across the board and all businesses so we move into the rest of 2013 with confidence," Lucas told reporters on a conference call.

source:  http://www.foxbusiness.com/industries/2013/02/12/barclays-to-slash-3700-jobs-amid-cost-cutting/

5 Smart Ways to Avoid a Cash Crisis

Here’s an interesting puzzler. How is it possible for a profitable business to be growing and failing at the same time? The all important answer to this conundrum lies in the company’s cash flow.

Hot product companies that experience rapid sales growth have to purchase and assemble inventory months in advance of shipment to retailers and distribution partners. This eats up a company’s cash. And, just when customers get around to paying for last month’s product shipments the company has to invest its available cash in the next inventory production run. This is how too much success can quickly lead to an empty bank account.

If a commercial bank doesn’t step in to help a company catch up, the company may have to lay off workers, cut back production or face bankruptcy. This scenario is the living nightmare of American business today.

Here are five easy ways to protect your company’s precious cash life line.

No. 1: Limit exposure to high risk customers.  Are your largest customers also your company’s slowest paying customers?  If so, take immediate steps to diversify the customer mix to favor faster paying customers.  Sales commission payments should be tied to the timing of customer collections too.

No. 2: Bill frequently.  Most service-oriented businesses bill on a monthly basis or at the end of a project.  Why not bill customers every week or every two weeks in the form of progress payments?  The faster companies invoice customers, the faster they get paid.

No. 3: Reduce dependence on a single funding source.  As too many entrepreneurs have learned, it’s relatively easy for banks to pull credit lines when companies can least afford it.  To minimize the risks of sudden cash shortfalls, smart entrepreneurs set aside one or two credit cards for emergencies.

The first time a bank lending officer learns about your company should not be the day you are desperate for cash.  If you don’t know the names of at least four bank credit officers, ask your business colleagues for referrals now!  Smart business owners are always eager to meet credit officers from big and small community lenders.

No. 4: Streamline product lines.  Entrepreneurs who don’t have a lot of loose cash should avoid producing too many products in too many styles to sell to too many different types of customers.  The more complex a company’s product line, the more cash that is required to produce, store, advertise and deliver goods to customers.

No. 5: Set high profitability standards.  The companies that are most vulnerable to financial heartaches during a recession or credit crisis are low profit margin businesses.  Simply stated, low margin businesses have no margin for error.  Don’t be shy about axing products or services that don’t match or exceed your industry’s average gross profit margins.

There is another reward for entrepreneurs who emphasize cautious cash management in their day-to-day business operations.  Lenders and investors compete to fund them.

source: foxbusiness.com

Here’s an interesting puzzler. How is it possible for a profitable business to be growing and failing at the same time? The all important answer to this conundrum lies in the company’s cash flow.
Hot product companies that experience rapid sales growth have to purchase and assemble inventory months in advance of shipment to retailers and distribution partners. This eats up a company’s cash. And, just when customers get around to paying for last month’s product shipments the company has to invest its available cash in the next inventory production run. This is how too much success can quickly lead to an empty bank account.
If a commercial bank doesn’t step in to help a company catch up, the company may have to lay off workers, cut back production or face bankruptcy. This scenario is the living nightmare of American business today.
Here are five easy ways to protect your company’s precious cash life line.
No. 1: Limit exposure to high risk customers.  Are your largest customers also your company’s slowest paying customers?  If so, take immediate steps to diversify the customer mix to favor faster paying customers.  Sales commission payments should be tied to the timing of customer collections too.
No. 2: Bill frequently.  Most service-oriented businesses bill on a monthly basis or at the end of a project.  Why not bill customers every week or every two weeks in the form of progress payments?  The faster companies invoice customers, the faster they get paid.
No. 3: Reduce dependence on a single funding source.  As too many entrepreneurs have learned, it’s relatively easy for banks to pull credit lines when companies can least afford it.  To minimize the risks of sudden cash shortfalls, smart entrepreneurs set aside one or two credit cards for emergencies.
The first time a bank lending officer learns about your company should not be the day you are desperate for cash.  If you don’t know the names of at least four bank credit officers, ask your business colleagues for referrals now!  Smart business owners are always eager to meet credit officers from big and small community lenders.
No. 4: Streamline product lines.  Entrepreneurs who don’t have a lot of loose cash should avoid producing too many products in too many styles to sell to too many different types of customers.  The more complex a company’s product line, the more cash that is required to produce, store, advertise and deliver goods to customers.
No. 5: Set high profitability standards.  The companies that are most vulnerable to financial heartaches during a recession or credit crisis are low profit margin businesses.  Simply stated, low margin businesses have no margin for error.  Don’t be shy about axing products or services that don’t match or exceed your industry’s average gross profit margins.
There is another reward for entrepreneurs who emphasize cautious cash management in their day-to-day business operations.  Lenders and investors compete to fund them.


Read more: http://smallbusiness.foxbusiness.com/finance-accounting/2012/11/15/5-smart-ways-to-avoid-cash-crisis/#ixzz2COXjczLv

Here’s an interesting puzzler. How is it possible for a profitable business to be growing and failing at the same time? The all important answer to this conundrum lies in the company’s cash flow.
Hot product companies that experience rapid sales growth have to purchase and assemble inventory months in advance of shipment to retailers and distribution partners. This eats up a company’s cash. And, just when customers get around to paying for last month’s product shipments the company has to invest its available cash in the next inventory production run. This is how too much success can quickly lead to an empty bank account.
If a commercial bank doesn’t step in to help a company catch up, the company may have to lay off workers, cut back production or face bankruptcy. This scenario is the living nightmare of American business today.
Here are five easy ways to protect your company’s precious cash life line.
No. 1: Limit exposure to high risk customers.  Are your largest customers also your company’s slowest paying customers?  If so, take immediate steps to diversify the customer mix to favor faster paying customers.  Sales commission payments should be tied to the timing of customer collections too.
No. 2: Bill frequently.  Most service-oriented businesses bill on a monthly basis or at the end of a project.  Why not bill customers every week or every two weeks in the form of progress payments?  The faster companies invoice customers, the faster they get paid.
No. 3: Reduce dependence on a single funding source.  As too many entrepreneurs have learned, it’s relatively easy for banks to pull credit lines when companies can least afford it.  To minimize the risks of sudden cash shortfalls, smart entrepreneurs set aside one or two credit cards for emergencies.
The first time a bank lending officer learns about your company should not be the day you are desperate for cash.  If you don’t know the names of at least four bank credit officers, ask your business colleagues for referrals now!  Smart business owners are always eager to meet credit officers from big and small community lenders.
No. 4: Streamline product lines.  Entrepreneurs who don’t have a lot of loose cash should avoid producing too many products in too many styles to sell to too many different types of customers.  The more complex a company’s product line, the more cash that is required to produce, store, advertise and deliver goods to customers.
No. 5: Set high profitability standards.  The companies that are most vulnerable to financial heartaches during a recession or credit crisis are low profit margin businesses.  Simply stated, low margin businesses have no margin for error.  Don’t be shy about axing products or services that don’t match or exceed your industry’s average gross profit margins.
There is another reward for entrepreneurs who emphasize cautious cash management in their day-to-day business operations.  Lenders and investors compete to fund them.


Read more: http://smallbusiness.foxbusiness.com/finance-accounting/2012/11/15/5-smart-ways-to-avoid-cash-crisis/#ixzz2COXjczLv

Monique Lhuillier opens store in New York

Monique Lhuillier opened her first New York store on Oct. 5, and within five minutes made a sale—a fur-and-lace jacket from her Fall ready-to-wear collection.

The store is in a two-story brownstone on East 71st Street. Next day, 43 brides had appointments on the second floor, which is the bridal section.

Monique’s New York flagship store comes 12 years after she opened her first store in Los Angeles, and four years after that in Edina, Minnesotta.

“We are very strategic in how we grow, and we grow within our means,” Monique told writer Jessica Iredale. She added that “there was never really a rush to open in New York … just when it felt right.”

The business is owned by Monique and her husband Tom Bugbee, the company’s chief executive officer. They always wanted a space in New York City’s upper East side, since that’s “where our customer base is.”

They found this location in 2010, at first limited to the ground floor. But soon the second floor gallery became available, as well as a one-bedroom apartment on the same floor.

Monique’s New York flagship store has 3,000 sq ft, with enough space to house all the label’s collections—RTW, bridal, table top, shoes and chandeliers done for Waterford.

The chandeliers hang from the high ceilings, designed by Monique with tiers of multifaceted crystal baguettes. They imitate the layers of fabric and beadwork of her gowns.

Flagship

Monique’s signature gray color scheme is evident in her New York flagship. The walls are in gray suede. Chairs from the ’60s and ’70s are covered in gray velvet.

Monique worked with designed Jennie Abbott, who designed her Los Angeles home and store. There are two commissioned works by New York sculptor Silas Seandel. More artworks are by Herve van der Straeten, Daniel Gluck, Neal Small and Nany Lorenz.

An open staircase framed by 22-foot glass walls leads to the bridal section on the second level. The RTW collection is on the ground floor because Monique and Tom want it more accessible to the customer. It is also the category they consider essential for more growth.

In 1986, Monique launched her business as strictly bridal. She soon became one of the top designers in the US, thanks to her celebrity clientele. Britney Spears wore Monique Lhuillier in her wedding to Kevin Federline in 2004.

Bridal is the foundation of Monique’s meteoric success. As she says, “I feel like in bridal we’re at the top of our game right now.” However, at the moment, her primary focus in on RTW.

Now that they have opened their New York flagship store, Monique and Tom are looking forward to possibly opening in the Philippines and Hong Kong.

Establishing her own network of stores will result in the company’s expansion.

As she told Iredale,  “A lot of department stores or specialty boutiques that carry me buy me for wedding gowns or solely evening gowns.

We really feel like the future for us is in the ready-to-wear collection, and housing the entire thing in our stores. Now the customer has access to it all.”

Monique was born in Cebu, the youngest of four children of Michel Lhuillier, Honorary Consul of France in the Visayas, and Amparito Llamas Lhuillier, who Monique always says has been her inspiration.

source: lifestyle.inquirer.net

UK ‘excited’ over trade with Philippines

LONDON—The Philippines is a “hugely exciting” market where the United Kingdom is keen on boosting reciprocal investment.

Key trade officials here bared this bright outlook, noting that the UK was setting its sights on Southeast Asia as a priority growth area amid the continuing dim prospects in Western economies.

They said the UK hoped to step up trade with growing markets to combat a general sense of pessimism over economic numbers here and in the euro zone.

Nick Baird, chief executive of UK Trade and Investment (UKTI), the state body that links UK firms to the global market, said that British firms were looking at ways to tap the Philippines’ robust economy and invest in major infrastructure, health care and retail-related projects.

“I think that for us, the huge opportunities there are certainly around big infrastructure projects, health… We’re also very interested in areas I would describe as building on and working with countries’ growing middle classes, so [it’s about] providing better education, health services, accessing the consumption of these middle classes through the retail sector,” Baird told Asean reporters on a visit here.



Enjoys Brits’ confidence

Baird said the Philippines enjoyed the confidence of the UK business community, particularly of Richard Lambert, former head of the UK employers group, the Confederation of British Industry (CBI), and now chancellor of the University of Warwick, a top British university.

“We have a lot of very strong champions for the Philippine market. I was talking recently to Mr. Lambert, former head of CBI, which is our biggest business organization and he’s saying the Philippines is a hugely exciting market,” said Baird.

The Philippines is currently regarded among the world’s booming markets and is expected to retain in the second semester the 6.1-percent growth rate it posted in the first half of the year.

International credit ratings agencies Moody’s Investors Service, Fitch Ratings, and Standard and Poor’s upgraded the country’s rating to a notch just below investment grade, citing the Philippines’ steady growth pace.

The UK is sending a trade mission to the Philippines this week to touch base with the government and business sector and discuss possible partnerships in social infrastructure and transport.

Participating UK companies include Arup, Tata Steel International, Kier Construction, Tony Gee & Partners, GE Healthcare, Ryder Architecture, IMC Worldwide, SKM Colin Buchanan and KM&T, top firms in construction, design and architecture, project management and consultancy, services and supply chain management, according to the UK Embassy in Manila.

Total bilateral trade between the Philippines from January to August of this year was placed at 512.9 million British pounds (P33.8 billion), a five-percent growth over the same period last year.

‘Asean is very important’

Such an economic glow in the Philippines, also mirrored across the region, is a bright spot amid continuing economic troubles in the euro zone and the slow recovery in the United States. The latest UK growth rate was placed at one percent and the struggle to raise this is expected in the next few years.

“The Asean is really very important to us not just because this is such, collectively, a huge economy, comparable in size to China and Japan, bigger than India, but also because in many of the countries, we have good strong positive relationships,” Baird said.

Expand export capacity

He said the UK hoped to establish greater two-way trade with Asean firms, stepping up both export and inward investments. Currently, Singapore, Malaysia and Thailand are among the UK’s major trade and investment partners.

More than half of UK exports go to the developed but currently struggling markets and it has only a 1.2-percent share of imports in major growth markets, including the whole of Asean.

“Britain wants to hugely expand its export capacity, with particular focus on the growth markets and, in that, the Asean markets have a special place for us. And second, this is a country that is massively open to foreign investors and companies of all kinds. It’s very easy to set up business here,” he said.

He said the UK aimed to double its trade with each of the Asean countries by 2015. And while concerns about political stability, corruption and business ease may remain, the UK holds the view that there is “far less risk to trade with Asean than there is to trade with China, Africa or India,” he said.

Giving Asia attention

“We have been trading successfully in the last few years in our European backyard and with the United States, but of course those markets are still weak and we need to get much better trading into the big growth markets of Asia, Latin America and Africa,” Baird said.

The UKTI, through the year-old UK Asean Business Council, is hoping to facilitate this exchange through spreading greater Asean market awareness to UK firms, said the council’s executive director, Tom Burden.

“We are working on raising awareness of Asean markets in the UK. It’s really about giving Asia the attention it deserves,” Burden told reporters in a separate briefing.

source: business.inquirer.net