Murray Stahl

Murray Stahl

Last Update: 2014-11-13

Number of Stocks: 509
Number of New Stocks: 12

Total Value: $7,757 Mil
Q/Q Turnover: 4%

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

Murray Stahl Watch

  • FPA Capital Fund Adds Two New Technology Stocks to the Portfolio

    FPA Capital Fund (Trades, Portfolio) recently added two new stocks to its portfolio valued at $8.82 billion. The portfolio now has a total of 25 stocks.


    The new buys include Babcock & Wilcox Co (BWC) and Cubic Corp (CUB).

      


  • Betting on a Fairly Value Stock with a Bullish Sentiment

    In a previous article we analyzed the relative valuation of the stock,and concluded that it is trading higher and as a result, it is difficult to identify if there exists an adequate margin of safety to buy the stock. So, in this article let's take a closer look at W.W. Grainger, Inc. (GWW), and analyze the intrinsic value with an absolute valuation model.


    Strategies

      


  • Murray Stahl’s Horizon Kinetics Comments on Royal Gold Inc

    An idiosyncratic security with benefits – a diversifier


    Let’s find a contrasting investment to a utility index or a REIT index, which are front and center as bond substitutes or asset allocation building blocks. They are therefore closely governed in valuation and price behavior by the asset flows of index investors and, so, might be particularly vulnerable to a rise in interest rates. Consider, instead, a very distinctive security like Royal Gold, Inc (RGLD). It is categorized in financial securities databases like a gold mining company. Yet it does not do any mining, and on a balance sheet and income statement basis has as little in common with gold mining as Microsoft (MSFT): it has virtually no property, plant, or equipment, it carries no net debt, it has extremely high after-tax cash flow margins—well over 50%. Microsoft’s are roughly 25%. Its financial statements and casually observable economics say that it really does not belong with the gold mining group.

      


  • Murray Stahl’s Horizon Kinetics 3Q 2014 Commentary

    This year’s commentaries review some of the surprising ways in which scientific-seeming or rule-based approaches to investing, which are now the norm and implemented via exchange-traded funds (ETFs) and index-based mutual funds, are foiled in practice by the social science reality of the fluid marketplace. A formulaic approach can work for a while, until a sufficient number of additional investors apply it. Their aggregate actions impact the supply/demand balance, valuations change, and the formula can no longer work. In reviewing some popular building blocks of the asset allocation model of investing, we have, hopefully, demonstrated:


    -That an emerging markets index probably does not contain much in the way of emerging markets exposure, so much as exposure to large, relatively mature companies, many of which are exporters that, economically, are really global companies, not local. That the historical excess returns recorded by emerging markets indexes are probably not a reliable set of figures. That a non-indexed approach, or a different form of index, could better capture the local-economy potential of emerging markets.

      


  • W.W. Grainger Should Be a Profitable Investment

    Jeremy Grantham,Murray Stahl - W.W. Grainger Should Be A Profitable Investment

    In this article, let's take a look at W.W. Grainger, Inc (GWW), a $16.92 billion market cap company, which is the largest global distributor of industrial and commercial supplies, such as hand tools, electric motors, light bulbs and janitorial items.


    Fundamentals

      


  • Expedia Has Made Astute Acquisitions

    In this article, let's take a look at Expedia Inc. (EXPE), a $10.89 billion market cap company tha is one of the world's largest online travel services companies. Businesses include Expedia, Hotels.com and Hotwire. In December 2011, Expedia spun off TripAdvisor as a publicly traded company.


    Dominant player

      


  • Wendy's Absolute and Relative Valuation

    In this article, let's take a look at Wendy's Co (WEN), a $3.12 billion market cap company, which is one of the largest fast food restaurants.


    Revenues, margins and profitability

      


  • General Motors Reinstated Dividend Payment

    In this article, let´s consider General Motors Company (GM), a $49.36 billion market cap that is the world's second-largest producer of cars and trucks. It has a trailing P/E ratio that indicates that the stock is relatively overvalued (PE 50.9x vs Industry Median 15.8x).


    The company maintains quality and has one of the best designs. Not only cars, it is also a leader in truck models, too. We think that, in the near future when vehicle demand recovers, the firm will be in an excellent position to grow its earnings. Further, the company focuses on four brands instead of eight, making marketing efforts more concentrated and efficient. Efficiency is reflected also in pricing policies, where it developed a pricing model searching for profitability. This means that is operating a demand-pull model where it produces only to meet demand.

      


  • Murray Stahl on Icahn Enterprises

    Murray Stahl (Trades, Portfolio): My favorite stock at the moment is Icahn Enterprises, which is something we have owned for, I think, 14 years, and it is our third-largest holding. As you know, it is comprised of an assortment of assets. It owns Apple (AAPL) and other securities. It owns two assets that trade more or less at their stated net asset value, but I think they are undervalued. One of them is the Fontainebleau Hotel and Casino in Las Vegas, which owns an 80% completed building. All around that casino there is building activity going on and then there is this hulk. It cost about $3 billion to construct that structure to be 80% complete. To construct it today would cost even more. That is an asset that could be monetized and could be worth a lot of money. We should mention that Icahn Enterprises bought the Fontainebleau Hotel and Casino for 10 cents on the dollar in 2008 or 2009. That $2 billion is not on the balance sheet; only a couple hundred million dollars is on the balance sheet.


    Another asset that Icahn Enterprises owns is American Railcar Leasing (ARII). Leasing railcars means primarily leasing tanker cars. The company leases other cars, too, but primarily tanker cars. Because the United States is finding oil in all sorts of places that it did not find oil before and because there is no pipeline capacity to get it to market, the only way to get it to market is by rail lines. In theory you could build pipelines except most people do not want to have a pipeline across their property, or anywhere near a property, or even through their town. As a practical matter you cannot build the pipelines.

      


  • Anadarko is a Strong Player with an Interesting Mix Composition

    In this article, let's take a look at Anadarko Petroleum Corporation (APC), a $56.08 billion market cap company, one of the largest independent exploration and production companies in the world.


    International operations

      


  • FRMO Corporation's 2014 Annual Meeting of Shareholders Transcript

    Murray Stahl (Trades, Portfolio): Thank you, Therese, and thanks, everybody, for coming today.


    I was very fortunate when beginning to write the annual Letter to Shareholders to be apprised of an event that you may have read about in that letter. The idea was that we as a corporation were lacking in certain corporate governance formalities and requirements, one of which happened to be the lack of a compensation committee, and I took the occasion to comment on that. I hope you’ll understanding that I did it tongue in cheek. Corporate governance is a very serious matter, but in our case the recommendation of a certain proxy firm was to withhold the vote from us for, among other reasons, the lack of corporate governance relating to management compensation.

      


  • Urban Outfitters' Price Touched Its 52- Week Level; And Now?

    In this article let's take a look at Urban Outfitters Inc. (URBN), the leading lifestyle specialty retail company that operates Urban Outfitters, Anthropologie, Free People, Terrain and BHLDN brands.


    Expanding outside the U.S.

      


  • Genuine Parts Co. is the Largest Independent Distributor of Automotive Parts

    In this article, let's take a look at Genuine Parts Co (GPC), a $13.75 billion market cap company, which is a leading wholesale distributor of automotive replacement parts, industrial parts and supplies and office products.


    Leading position

      


  • I Will Follow Bruce Berkowitz and Move Away From Chesapeake

    In this article, let´s consider Chesapeake Energy Corporation (CHK), a $15.74 billion market cap, which has a trailing P/E ratio that indicates that the stock is relatively undervalued (a PE relatively small when compared to the industry median).


    So in this article, let's take a look at a model that is applicable to stable, mature, dividend-paying firms and try to find the intrinsic value of the stock. Although the model has a number of characteristics that make it useful and appropriate for many applications, it is by no means the be-all and end-all for valuation. The purpose is to force investors to evaluate different assumptions about growth and future prospects.

      


  • BNY Mellon: Despite Some Weaknesses Is Still Attractive

    In this article, let's take a look at The Bank of New York Mellon Corporation (BK), a $44.66 billion market cap company, which is a leader in securities processing and also provides a range of banking, asset management and other financial services.


    Dominant player

      


  • Boeing Focuses on the Upside and the Downside

    In this article, let's take a look at The Boeing Company (BA), ), a $88.78 billion market cap company, which is the largest aircraft manufacturer in the world, and one of the largest aerospace and defense giant that conducts business through three operating segments.


    Boeing Commercial Airplanes (61% of revenues in 2013) and EADS's Airbus division are the world's only makers of 150-plus seat passenger jets. Boeing Defense, Space & Security (38%) is the world's fourth largest military contractor. Boeing Capital Corp. (1%) primarily finances Boeing aircraft for airlines.

      


  • Murray Stahl’s Horizon Kinetics Comments on TRI Pointe Homes

    TRI Pointe Homes (TPH) is a recent addition to some of our portfolios. It was founded in the depths of the Credit Crisis in 2009 by former homebuilding industry executives. Their objective was to acquire land lots in distressed regions, particularly in California and Colorado, which could be utilized for future home construction. TRI Pointe was certainly not alone. A number of companies led by astute investors acquired enormous amounts of land in heavily distressed areas such as California, Arizona, and Nevada.


    In 2010, real estate investor Barry Sternlicht capitalized TRI Pointe with $150 million of equity through his Starwood Capital private equity fund. Mr. Sternlicht became Chairman of TRI Pointe and received roughly 39% equity ownership of the company. Given his real estate experience, it is not surprising that he chose a vehicle that will ultimately benefit from a sustained recovery in the residential housing market.

      


  • Horizon Kinetics Second Quarter 2014 Commentary

    The Shaky Foundations of Asset Allocation Practices, Continued


    Our 1st Quarter letter addressed the question of whether some basic presumptions of asset allocation work in the real world the way every one presumes them to… such as whether emerging markets equities actually outperform developed markets, whether the historical rate of return from the stock market can be repeated or is, indeed, even valid, and so forth. Understanding these questions can hardly be more critical, since we all invest based on these foundational assumptions. One element such models share is that in the freedom of the marketplace, any rigid, definitional approach will come to be invalid, later if not sooner, since investors do react to new information and, thereby, alter supply and pricing. If a particular sector is discovered to be superior or to outperform, will not capital flow into it and inflate the price? And at what degree of price inflation does the sector become a source of average or negative, rather than superior, return?

      


  • Murray Stahl’s Horizon Kinetics Comments on Platform Specialty Products

    A recent purchase in certain strategies is Platform Specialty Products (PAH). Like Wendy’s (WEN), this stock does not trade at a presently low price-to-earnings, or P/E ratio; in fact, it’s somewhat high. However, the company incorporates many predictive attributes that are suggestive that its revenues and earnings several years from now will be far higher than they are today. As a U.S. company, PAH is new, having been listed on the NYSE only since this past January. Its operating business, though, has been around for over 90 years, and PAH was trading on the London Stock Exchange when it was acquired this past October for $1.8 billion by what is known as a blank-check company. The current stock market value is $2.4 billion. A blank check company raises equity capital in order to acquire a target, often within a specified window of time, and this particular one was organized by three well- known parties: Nicolas Beggruen, through his investment company Beggruen Holdings; Bill Ackman, through his hedge fund Pershing Square; and Martin Franklin. At year-end they each controlled, respectively, 6.5 million, 33.3 million, and 7.3 million shares. Martin Franklin is also the founder and Executive Chairman of Jarden Corp (JAH), which is a significant holding in the Core Value and Strategic Value strategies, among others. The same three, also through a blank check company, brought Burger King (BKW) public again in mid-2012.


    PAH produces specialty chemicals for a wide range of industries. It manufactures over 1,000 compounds, and its largest customer represents only 3% of sales. It exhibits very little cyclicality. Energy costs are only 2% of sales. It’s important to qualitatively differentiate the nature of the PAH chemicals business from that of the typical chemicals company. These particular chemicals are often proprietary both as to makeup (the company has over 750 patents) and process. Their employees spend considerable time with customers guiding them as to how to use these chemicals, often in multi-step processes, such as might be used to enhance the performance of a circuit board. PAH refers to these as dynamic chemistries and seeks out markets requiring highly technical post-sale customer service. What PAH sells tend to represent a very small portion of the cost of a customer’s product, yet are important to the product’s function or appearance. According to the company, customer retention is very high because the cost savings from switching to another provider are modest, while the switching costs are high due to process complexities and quality control requirements.

      


  • Murray Stahl’s Horizon Kinetics Comments on Wendy’s Company

    As the investing world continues to embrace indexation, it assists us in sourcing truly attractive investments in areas that are structurally overlooked (or created) by the mainstream. Wendy’s, a relatively recent purchase and significant holding, is one example.


    The Wendy’s Company (WEN) has long been unloved. It is the world’s third largest hamburger-oriented quick service restaurant (“QSR”), behind McDonald’s (MCD) and Burger King (BKW). A common criticism is that it has chronically underperformed its larger peers in many key areas, particularly profit margins. Accordingly, the company “screens” poorly by nearly every quantitative measure of business performance and valuation. The stock price was essentially unchanged for 2010, 2011, and 2012. Although it has almost doubled during the past year, it is lower now than it was over 10 years ago, in 2003. However, many of our most successful investments over the past two decades have been in companies that, like Wendy’s, underperform their competitors. Operational/financial underperformance is, in fact, an opportunity, if the underlying business is fundamentally viable and an actionable plan exists to improve operating performance.

      


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