This is the second article of the series we are writing after reading Warren Buffett’s shareholder letter. In this letter, Warren Buffett disclosed three of his stocks that we did not know before. These are the three stocks:
Posco (PKX)
Warren Buffett has mentioned previously that he bought Korean stocks. He mentioned Dae Han Flour Company in one of his speeches. He just told that he owns 4% of Posco (PKX), a Korean company that sells and manufactures steel products, including stainless steel, steel pans and other products. Posco mainly sells in the Korean market, and its greatest export markets are Japan and China . Warren Buffett holds 3,486,006 shares, which he bought for $572 million. He has more than doubled his money since. Lee Chae-won, managing director at Korea Value Asset Management, said, “Buffet has mainly invested in dominant stocks in the food and beverage industry, rather than market-sensitive stocks, including steel stocks. Although the investment in POSCO is an exception to his investment style, there will be no additional purchases as the share price has more than doubled since when he bought the shares.”
Tesco (TSCDF.PK)
Tesco is an UK-based retailer. The principal activity is food, for it has over 2,000 stores in the United Kingdom, the Republic of Ireland, Hungary, Poland, the Czech Republic, Slovakia, Turkey, Thailand, South Korea, Taiwan, Malaysia, Japan and China.
Warren Buffett started buying Tesco in March 2006. He owns 229,707,000 share or 1.8% of the company, which cost him $969 million. The current value of these shares is more than $1.8 billion. “Buffett is realizing that with Tesco moving into the U.S. with a fantastic format and great management, they are the ones to back,” said Chris Gower, an analyst at Man Securities in London. “I wouldn't be surprised if other investors start piling in. They look at Buffett as the shining light.”
White Mountains Insurance Group (WTM)
WTM (White Mountains Insurance Group) is in the business of casualty and property insurance and operates in four sectors: OneBeacon, White Mountains Re, Esurance and Other Operations. via his subsidiary General Re Warren Buffett currently owns 16% of the company, which cost him $369 million. The current value of these shares is $999 million.
Warren Buffett also bought two other companies; as the letter says, “I could, of course, tell you their names. But then I would have to kill you.” We are hosting a contest in which our readers have made educated guesses. You are invited to participate this contest.
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User Comments:
We havent just learne about wtm it has been in the annual report for some years.
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Similarly Buffett's Tesco purchases, have been reported extensively previously.
See the FT in May 2006
[www.ft.com]
Of note is that Geico (Lou Simposnn) purchased that
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I bought Tesco when Buffet bought last year and am up 41%. They are building a distribution center in Riverside, CA. I think the California market is prime for another well run supermarket. If they can go for the same niche that Trader Joes goes for, they will do fine.
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I missed it when Buffett first started buying Tesco. However this market correction has allowed me to add at prices that Buffett first started buying at.
Being based in Ireland I purchase the shares on the London market and will continue to add at under 330p/340p after the shares go ex-divi.
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I just want to add that I think on a historic dividend yield TSCO should be valued at just under 500p and on a 5 year basis with only 8% earnings power ( excluding the divi ) a fair price would be a little over 500p. With 9% divi growth on a historical yield of 2.7% then we get a fair price of about 650p which corresponds with the higher than 500p figure on earnings alone without the dividend.
So, hopefully, it should be a nice little doubler within 5 years.
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