Bilibala Finance’s 5 Top Holding by Region:
(with net present value in 1 year)
American
1. Manulife Financial (MFC) CA$31.4 STRONG BUY
2. Google Inc. (GOOG) US$745.1 => US$754.6 BUY
3. Wells Fargo Financial (WFC) US$43.8 STRONG BUY
4. General Electric (GE) US$23.5 HOLD
5. TD Bank (TD) CA$92.3 HOLD
6. American Express (AXP) US$48.6 HOLD (pending to update)
7. Suncor Energy (SU) CA$50.0 BUY (pending to update)
· Mar 11 major transactions: switch to Suncor Energy (SU) CA$41.34; add Berkshire Hathaway (BRK.B) US $85.0; add American Express (AXP) US$43.2
· Why Bilibala buy Suncor? Bilibala sold Petro Canada in 2008 at $37.0 when it announced it will merge with Suncor. At that time Suncor’s debt to equity ratio was high at 54%. Given the uncertainty of whether the “marriage” will be a success or disaster, I sold it and bought Imperial Oil, lower debt, better management & technology support by Exxon Mobil (XOM), by given up the potential growth opportunity of what Suncor & Petro Canada have. In 2 years, I can see the huge improvement in Suncor by lowering its debt to equity ratio to 34% with a promise by management they will lower it further before 30% in 2011. While Imperial Oil has already ran above my expectation & fulfill its mission, I will now switch to Suncor. The reason why Suncor fall short while oil price up is cuz it has investment in Libya and have higher uncertainty of potential losses & damage. I think the political issue can go on for a long period, but who ever gain power will not destroy the energy business
· Why Bilibala add Berkshire Hathaway? I’ve reviewed the whole 2010 annual report. Looks great as usual!! Add back cuz I found out Todd Comb (the one I don’t like or do not impress) only replace Liu in GEICO who manage a portfolio of $3-4B. Looking forward, its investment income growth may slow down, given the fact General Electric & Goldman Sech will most likely buy back the preferred shares on a 10% redemption fees this year. By that time, Berkshires Hathaway will have lower before tax dividend/interest income by $0.8B, which is a lot of $$.
# Bilibala personally uses fair value @ 2016 to do all investment, however, I think for most small investors, net present value @ 2011 (fair value multiply by discount factor), would be more relevant.
· STRONG BUY with NPV over MV above 30%
· BUY btw 15% to 30%
· HOLD btw (15%) to 15%
· RE-RE-RECONSIDER below (15%)
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment