Archive for 2007

• Fiserv Agrees to Acquire CheckFree for $4.4 Billion
  Eddy Elfenbein, August 2nd, 2007 at 2:22 pm

  Big news from Fiserv (FISV), one of our Buy List stocks.

  Fiserv Inc., the manager of check- processing and cash machines for 17,000 companies, agreed to buy CheckFree Corp. for about $4.4 billion, adding software that runs Internet-banking services.
  CheckFree shareholders will receive $48 a share, 30 percent more than yesterday’s close, Brookfield, Wisconsin-based Fiserv said today in a statement.
  Fiserv’s biggest acquisition gives it CheckFree’s electronic systems for online bill-paying and technology that processes more than 1 billion transactions a year. Fiserv was outbid by Fidelity National Information Services Inc. earlier this year when it tried to buy rival EFunds Corp. for $1.5 billion.
  “Electronic banking is increasing at a significant pace,” said Benton Gup, a professor of finance at the University of Alabama. “More financial-services companies are going to offer online banking if they don’t already.”
  Shares of Norcross, Georgia-based CheckFree rose $8.73, or 24 percent, to $45.56 at 12:17 p.m. in Nasdaq Stock Market composite trading. Shares of Fiserv gained 7 cents to $49.26.
  The combination will allow the company to eliminate about $100 million a year in expenses, Fiserv said in the statement. The sale, which the companies expect to close by the end of the year, will add more than $125 million to revenue. The purchase should add to earnings per share in 2008, Fiserv said.

• We’re Back Up
  Eddy Elfenbein, August 2nd, 2007 at 11:19 am

  Sorry, we had some technical difficulties earlier today. I’d explain it to you, but you probably wouldn’t understand. Let’s just say it’s related to the subprime fallout.
  

• Buy List Since 2006
  Eddy Elfenbein, August 1st, 2007 at 2:05 pm

  Here’s a look at how our Buy List has done going back to the beginning of last year:
  
  We were fairly even with the market until this spring, but we missed the big surge in cyclical stocks. However, we’ve held up a lot better during the recent sell-off. We were over 10% behind the S&P, now we’re 7% behind.
  Our relative volatility has plunged in the past few months. Since February, the Buy List is about 12% less volatile than the S&P 500.

• Crimson in the Red
  Eddy Elfenbein, August 1st, 2007 at 10:59 am

  From the WSJ:

  Harvard University’s endowment fund has graduated some of the most sought-after money managers in the hedge-fund world.
  Now one of those stars is teaching Harvard a lesson of its own.
  In the past month, the university lost about $350 million through an investment in Sowood Capital Management, a hedge-fund firm founded by Jeffrey Larson. Mr. Larson managed Harvard’s foreign-stock holdings until 2004, when he left to set up Sowood, which recently lost more than 50% of its value amid bad bond investments.
  Mr. Larson isn’t the only high-profile former Harvard-endowment manager with a mixed record since leaving the ivory tower. Jack Meyer, Harvard’s former top investment manager, last year raised a $6 billion hedge fund, Convexity Capital, including an initial $500 million investment from Harvard. While Convexity’s returns were subpar early on, its performance has improved lately, according to people familiar with the figures.

  (Via Joe DealBreaker)

• Murdoch Wins
  Eddy Elfenbein, August 1st, 2007 at 9:42 am

  It’s over. Murdoch won his bid for Dow Jones (DJ). This was a silly spectacle and after a lot of drama the only thing Bancroft family did was embarrass themselves.
  Here’s all you need to know:
  
  DJ’s stock has barely moved in a generation. That last uptick is from Murdoch’s $60 a share offer.

• The King and Buy
  Eddy Elfenbein, August 1st, 2007 at 9:30 am

  It turns out that one of Thailand’s best investors is the king:

  Mondays are different in Thailand. It’s the day of the week on which the world’s longest-reigning monarch, Bhumibol Adulyadej, was born.
  And in this Southeast Asian nation, the sidewalks, trains, ferries and food stalls selling fiery curries take on a canary- colored glow as Thais — from chief executive officers to street sweepers — pay respect to their king by dressing in the royal color of yellow.
  Investors are finding reasons to be enthusiastic about Bhumibol too: The $5 billion of shares that the 79-year-old king controls through the Crown Property Bureau, the asset management company established by Thailand’s government, are weathering the nation’s vicissitudes better than most.

• The Dividend Aristocrats
  Eddy Elfenbein, July 31st, 2007 at 11:02 am

  S&P tracks its list of “Dividend Aristocrats,” these are S&P 500 stocks that have increased their dividend every year for the last 25 years.
  Here’s the list ranked by current dividend yield:
  FHN 5.51%
  BAC 5.34%
  ED 5.29%
  USB 5.21%
  PFE 4.92%
  BBT 4.81%
  CMA 4.73%
  RF 4.68%
  FITB 4.43%
  MO 4.09%
  KEY 4.09%
  CINF 3.55%
  LEG 3.44%
  GCI 3.24%
  LLY 3.12%
  KMB 3.10%
  SNV 2.85%
  GE 2.83%
  JNJ 2.72%
  BUD 2.69%
  PPG 2.68%
  CLX 2.61%
  MTB 2.60%
  KO 2.59%
  ROH 2.58%
  ABT 2.57%
  AVY 2.56%
  VFC 2.51%
  CBSS 2.47%
  CB 2.27%
  PEP 2.27%
  PG 2.24%
  SWK 2.21%
  EMR 2.20%
  MMM 2.15%
  MCD 2.05%
  SLM 2.01%
  WWY 2.01%
  ADP 1.96%
  WMT 1.90%
  SHW 1.77%
  GWW 1.57%
  SVU 1.54%
  FDO 1.50%
  DOV 1.43%
  MHP 1.34%
  ADM 1.34%
  STT 1.28%
  BDX 1.25%
  JCI 1.17%
  LOW 1.14%
  SIAL 1.01%
  STR 0.95%
  TGT 0.90%
  WAG 0.85%
  NUE 0.84%
  BCR 0.75%
  CTL 0.56%
  PGR 0.19%

• Quote of the Day
  Eddy Elfenbein, July 31st, 2007 at 12:30 am

  Private equity firms are draining the capital out of our communities, and draining the lifeblood of our country.

  From John Edwards’ campaign blog

• RIP: Chet Currier
  Eddy Elfenbein, July 31st, 2007 at 12:14 am

  Long-time financial writer, Chet Currier, died on Sunday. This is from his final Bloomberg column:

  For one long-standing indicator of shifting moods in the stock market, a now-or-never moment is at hand.
  The gauge in question, which focuses on cash reserves held by managers of stock-mutual funds, has been emitting increasingly bearish signals about the market outlook.
  But nobody has been paying much attention. The indicator’s once-stellar record of accuracy has been less than compelling lately. What’s more, the whole premise behind it may be out of date.

• GDP Revisions
  Eddy Elfenbein, July 30th, 2007 at 2:02 pm

  One of my constant complaints about the government’s economic data is that it’s subject to endless revisions. Then the revisions are updated and the updates are subsequently revised. Geez, folks. Just wait till you get a final number and give it to me.
  In Friday’s GDP report, the government revised all the GDP numbers going back to 2004. It turns out that the economy was a bit weaker than it originally said. They were only off by about $120 billion. Unless, of course, that gets revised.
  Funny, I don’t feel any different.
  Anyway, here’s a look at GDP, new numbers and old:
  
  Eleven of the 13 quarters were revised lower. Here’s a look at the quarterly growth numbers:
  
  …………………….Old………..…..New
  Q1-04………..3.85%………….2.96%
  Q2-04………..4.04%………….3.48%
  Q3-04………..3.10%………….3.60%
  Q4-04………..2.61%………….2.55%
  Q1-05………..3.40%………….3.07%
  Q2-05………..3.26%………….2.81%
  Q3-05………..4.18%………….4.46%
  Q4-05………..1.76%………….1.19%
  Q1-06………..5.58%………….4.82%
  Q2-06………..2.56%………….2.44%
  Q3-06………..1.96%………….1.07%
  Q4-06………..2.45%………….2.09%
  Q1-07………..0.69%………….0.60%
  Q2-07………………..…………….3.38%
  (We pass the graphics savings on to you.)