Murray Stahl

Murray Stahl

Last Update: 2014-02-13

Number of Stocks: 519
Number of New Stocks: 21

Total Value: $7,923 Mil
Q/Q Turnover: 3%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Murray Stahl Watch

  • Tennessee Whiskey: The Ultimate Profit Machine

    It’s known that American brown spirits are provided throughout the world by very few companies, such as Diageo Plc (ADR) (DEO) and BEAM Inc. (BEAM). However, while these firms focus on Scotch and Bourbon, Brown-Forman Corporation (BF.B) holds the leading market share of Tennessee Whiskey via its famous Jack Daniel’s brand. Despite a distribution scale six times smaller than Diageo, this beverage manufacturer has the most solid balance sheet in the industry, and the longest market presence with its 142 years of family owned business experience. Thus, investment gurus like Steven Cohen (Trades, Portfolio) and Murray Stahl (Trades, Portfolio) recently added more of this company’s shares to their portfolio, hoping to gain future profits. A bet well placed, in my view.


    A Tennessee Crown Jewel in the World

      


  • Murray Stahl on Ascent Capital

    In the case of Ascent, again, it's really not the purpose of this call to talk about investments of that type, but just understand that the strategic thrust is to put together a string of acquisitions in burglar alarms, because the whole idea is that burglar alarms are very similar to the cable business, and you know who orchestrates the big mergers in the cable business. It really isn't that different, and with the rise of technology there are all sorts of services that are possible to provide over the conventional burglar alarm wire, and we're in the first inning of seeing those advances happen. And, of course, if you follow Ascent, you'll know it's a small cap company that doesn't have a lot of float, and it's a volatile stock.... It goes up a lot, it goes down a lot and I guess that's the nature of the beast.


    Source: FRMO Corp. Q2 2014 Conference Call

      


  • Murray Stahl on Sears Hometown

    Suffice it to say this much: in the case of Sears Hometown (SHOS) I have some stock. I'm not selling mine. It's a big factor in appliances. There are 22 million shares outstanding and you know what appliances are tied to. Appliances are basically tied to two things—home sales and home renovations. So it's a nice balance sheet. It certainly doesn't have any major liabilities. If and when —maybe I should say when and not if—home sales and home renovation activity in this country return to normal, there's a lot of operating leverage for Sears Hometown. If they don't, well then the share price reflects it.


    Source: FRMO Corp. Q2 2014 Conference Call

      


  • A Look at the Profitability of a Boston Brewer

    The domestic beer market is characterized by vast competition, as much as consumer preferences. While imported AB InBev and MillerCoors concentrate 80% of the overall market, Boston Beer Company Inc. (SAM) is most popular along the East Coast. In fact, not only is this craft brewer the fourth-largest in the U.S., but it’s also the largest publicly traded brewer nationwide. Under its flagship brand, Samuel Adams, the firm has achieved large scale, having sold 3.4 million barrels of beer in 2013 alone.


    While craft beer still remains one of consumers' preferred beverages in the domestic market, competitors like Anheuser Busch Inbev SA (ADR) (BUD), which offered premium light beers, have been swapped for other craft brewers trying to imitate the Samuel Adams brand. And although the company enjoys a narrow economic moat rating, competition is heating up among privately owned brewers, like AB InBev, New Belgium and MillerCoors, which are planning to take over Boston Beer’s market share.

      


  • Murray Stahl's Horizon Kinetics on Texas Pacific Land Trust

    Texas Pacific Land Trust (the “Trust”) will be the last example of a company that despite being much higher in price than it was a year ago, is actually cheaper. The Trust was actually Horizon Kinetics’ first research report. At that time, in early 1995, it traded at $4.00 per share. At yearend 2013, the shares closed at $99.99, which works out to about a 19% annualized return.


     

      


  • Murray Stahl's Horizon Kinetics on DreamWorks Animation

    DreamWorks Animation, about the 3rd largest holding in the Core Value strategy, more than doubled this year, and is about 35% higher than when the position size was increased this past June. Yet, I believe that the shares are cheaper today than they were 12 or 18 months ago. Until then, DreamWorks did one thing: it made animated movies, and it was analyzed and valued as such. We thought it did two things: the movie making and, over time, the building of its movie library, which may be valued separately and had the characteristics of a dormant asset. Here’s what has happened in the past 18 months or so, none of which has yet had time to make an appreciable, visible impact upon revenues or earnings:


     

      


  • Murray Stahl's Horizon Kinetics on Sears Canada

    It can take weeks or even months to qualify a security or sector for purchase in our portfolios. Recently, it required not so many days, perhaps a Horizon Kinetics record, and it couldn’t have been done without the assistance of the press. This is the article that caught my eye some weeks ago. Note the decisive, emotive terminology. From the headline itself: “Sears Canada…In Bid to Survive”, and from the 2nd sentence in its own standalone paragraph: “…lightens its ballast in a bid to stay afloat.”


     

      


  • Murray Stahl's FRMO Corporation - 2013 Annual Meeting of Shareholders (Transcript)

    FRMO Corporation Annual Meeting of Shareholders


    Tuesday, August 27, 2013

      


  • Horizon Kinetics Third Quarter Commentary

    No one can accuse us, in these pages, of not being diligent in using our words, though we have been accused at times of using too many. So this review switches modalities somewhat, with more exhibits and fewer words. What won't switch are the themes, which are as relevant as ever: 1) the important and dysfunctional ways in which indexation is affecting security valuations, risk, and returns; and 2) the antithesis of indexation—active management and individual security selection, of which we, certainly, are practitioners.

    Prices in the marketplace are made by the marginal, or last, buyers or sellers—it's not the 99%+ of Apple (AAPL)'s shareholders who determine its price, but the net buying or selling pressure of the fractional percent who are transacting on a given day. It's certainly not us: we've been accused of harboring really long-term holding periods—years and even decades. Granted, we inhabit one end of the spectrum. So, here are some recognizable benchmarks: the annual turnover rate for IBM (IBM)(the proportion of its outstanding shares traded each year) is about 83%; the figure for ExxonMobil (XOM) is 68%. The average mutual fund has 68% annual turnover.  


  • Horizon Kinetics - Canadian Real Estate Companies and REITs (December 2013)

    In their continued search for yield, many investors have turned to Real Estate Investment Trusts (“REITs”). These companies pay out a significant percentage of their earnings as dividends; accordingly, they have historically provided a high level of income. However, a high dividend payout ratio leaves little in the way of earnings that can be reinvested in the business, such that the REIT must sell more shares in order to acquire additional income‐producing properties. Lately, in order to support continued dividend increases—which are required to support continued share issuance—many REITs have also resorted to reducing their capital expenditures below the levels that will ultimately be required to properly maintain their properties. We have previously touched on these and other risks associated with investing in American REITs and, for the most part, prefer to implement any real estate exposure through owner‐operated real estate development and management companies rather than through REITs. Real estate developers frequently have dormant assets, in that undeveloped land generates no cash flow, which makes such developers more difficult to value using standard metrics such as capitalization rates, price to earnings ratios and adjusted funds from operations multiples. Furthermore, their value‐creating projects are generally very long‐term in nature, which reduces their utility to investors focused on near‐term results.

    Broadly speaking, Canadian‐listed companies trade at a discount to their United States‐listed peers, providing an opportunity to invest in high quality North American companies at attractive valuations.  


  • Interview with Murray Stahl of Horizon Kinetics (May 2013)

    To Each His Own

    Horizon Kinetics’ Murray Stahl invests with the same long-term, contrarian approach that he wants management of his portfolio companies to employ.   


  • Murray Stahl’s $6.4 Billion Horizon Kinetics Sells Out Six Companies in First Quarter

    The New York-based mutual fund company Horizon Kinetics is dedicated to the pursuit of independent, creative thought and its application to investing. In the recent portfolio update of Horizon Kinetics, led by chairman, CIO and co-founder Murray Stahl, GuruFocus research shows 442 stocks, 62 of them new, with a total value of $6.4 billion and a quarter-over-quarter turnover of 9%. The Horizon Kinetics portfolio is weighted with top sectors consumer cyclical at 32.5%, real estate at 20.4% and ETF, options, and preferred at 14.8%.

    GuruFocus research also shows that Murray Stahl sold out holdings in six companies in the first quarter of 2013. Here are the details of his sell-out trades, as of March 31, 2013:  


  • Horizon Kinetics' Q1 2013 Commentary

    In his first quarter letter, Murray Stahl discusses Sears (SHLD), Tourmaline Oil Corp. (TOU), Texas Pacific Land Trust (TPL), Wendy's Co. (WEN), Viacom (VIA) and the markets. To read the commentary, go here.  


  • Horizon Kinetics Q4 2012 Commentary

    I thought this was one very enjoyable read. They touch on a concept that I've always considered important but never been able to put into words as effectively as Horizon has in this commentary.

    That concept is that if you trust the judgement of a management team with a long-term record of compounding at high rates, then maybe the best way to value their specific company is to watch how they are allocating capital (what they are doing with their own capital structure).  


  • Horizon Kinetics Comments on WPX Energy

    From the third quarter commentary of Murray Stahl's Horizon Kinetics:

    WPX Energy (WPX) was a December 2011 spin-off from The Williams Companies (“Williams”). Williams was (and remains, at $22 billion) a large capitalization stock. Williams is a natural gas pipeline company, which is a highly stable, high free cash flow generating business that currently pays a 3.5% dividend yield. WPX is a natural gas exploration company, considered a mid-cap stock (at $3.5 billion), and pays no dividend. What one might term the natural Williams shareholder, interested in a blue-chip, large cap, pipeline-type, income oriented equity is not the natural holder of WPX. This is exactly the type of spin-off that is sold from or excluded from mutual funds or ETFs that hold a Williams-type company, and these are some of the classic reasons that spin-off companies trade at low, often deeply discounted valuations. In the case of WPX, by a variety of measures, such as its price relative to its reserves, the shares might be fairly valued at twice the current price. Time will tell.  


  • Horizon Kinetics Comments on Leucadia National

    From the third quarter commentary of Murray Stahl's Horizon Kinetics:

    Leucadia National (LUK), under the management of Ian Cumming and Joseph Steinberg, who collectively own 19% of the shares, has one of the best records of value creation among publicly traded U.S. companies. Over the course of the 32 years from 1979 through 2011, the Leucadia book value per share, inclusive of a special dividend paid out some years ago, has expanded by 18.5% per year, and the share price by 19.8% per year. As a basis for comparison, the total return on the S&P 500 during the period was 7.6% per year. That is the difference between $1,000 becoming $299,000 or $10,400. This is an almost unmatched record. We believe Leucadia is a well diversified, well capitalized, profitable company with the same management in place that created this history. The shares, should you want them, trade below book value, which is to say below accounting liquidation value, which as of the most recent financial statement was $24.92. A low valuation is one of the better predictive attributes and is particularly compelling when combined, as in the case of Leucadia National, with proven owner-operators.  


  • Horizon Kinetics Comments on Cisco Systems

    From the third quarter commentary of Murray Stahl's Horizon Kinetics:

    For obvious reasons, Cisco Systems (“Cisco”) (CSCO), the dominant provider of networking and communications equipment, conducts ongoing studies of expected changes in demand for internet usage, wireless data usage and so forth, and actually maintains indices of such usage. Cisco expects mobile data traffic for the five years between now and the end of 2016 to increase 17-fold. That is an astounding figure. It is certainly related to the global adoption, still in the early phases, of smart phones and tablet computers. There are technological efficiencies that will accommodate some of that demand. For instance, broadband transmission speed is expected to increase by 3.5x. But those who are concerned with logistical preparation for such matters believe that more spectrum must be had. The value of spectrum could rise greatly. At the moment, we do not believe that potential is reflected in the price of Dish Network shares, so Dish might be said to incorporate at least two predictive attributes: an owner-operator and a dormant or unrecognized asset.  


  • Horizon Kinetics Comments on Dish Network

    From the third quarter commentary of Murray Stahl's Horizon Kinetics:

    Dish Network (“Dish”) (DISH), the satellite TV company, with a stock market value of over $14 billion, is more than 50%-owned by founder Charles Ergen and his family. It trades at 13x so-called consensus earnings estimates for 2013. The company has been engaged in some activities other than satellite TV as well, but these do not as yet contribute to earnings. One of these activities has been the acquisition of broadband radio spectrum. Since 2008, Dish has made at least three significant spectrum-related acquisitions totaling $3.5 billion or more. We are immeasurably less qualified than Charles Ergen to determine the wisdom of this allocation of capital, but do presume that with $7 billion of his own capital at risk in this company, he is making the best decisions he can. One may infer that he believes that wireless spectrum is valuable.  


  • Horizon Kinetics' Murray Stahl Second-Quarter Commentary

    Little has changed since our last commentary. The owner-operator companies continue to be remarkably discounted high-quality investment vehicles and, as per previous commentaries, we are exceedingly comfortable about their prospective rates of return, especially versus broad market indexes. Although we will close with the customary review of some of our holdings, and despite the fact that these commentaries have traditionally been about equities and our major equity strategies, we'll commence with what I think is a necessary discussion about interest rates.

    Interest rates have been likened to the center of gravity of the financial markets—they represent the cost of money for borrowers, and the benchmark for returns on money for lenders and savers. They influence the clearing prices and expected returns for virtually every other financial asset. While they are not often uppermost in our minds, a sufficient alteration in rates forces most people with a meaningful quantity of debt or assets to pay attention. This is one of those times.  


  • Horizon Kinetics' First Quarter Commentary with Discussion on XOM, AAPL, QCOM, INTC, HPQ, HHC

    Murray Stahl is the Chairman of Horizon Asset Management Inc. The firm's fourth-quarter letter, below, contains an overview of the market environment as well as discussions on individual stocks:

    It was intended, after last quarter’s identification of the exchange-traded fund (ETF) bubble and a review of its scope, to now dwell on some narrower portfolio-specific topics. Yet, many of the currents and stresses undergirding the broad stock market are of such importance, and the investing public is so unaware of them, that it seems a greater and timelier virtue to discuss some of those.  


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