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Companies Warren Buffett of Berkshire Hathaway Will Never Buy: Computer Sciences Corp., SAIC Inc. Agilent Technologies Inc., Intuit Inc.

March 26, 2009 | About:
Street Authority

On March 19, Bloomberg reported that Warren Buffett, Chariman and CEO of Berkshire Hathaway, is seeking to spend $5 billion to $20 billion on an acquisition. He prefers “simple” businesses with pretax profit exceeding $75 million, “consistent earnings power,” “good” returns on equity and little or no debt. Bloomberg went on and stated that there are 50 U.S. companies with that much market value and profit, a return on equity exceeding 10 percent and a debt-to- equity ratio less than 50 percent, according to Bloomberg’s own data.

GuruFocus dug into the list of companies and present information on company’s business, ownership of the Investment Gurus, and trade activity of insiders. The companies are grouped according to industries they operate in. This part we treat the high-tech companies on the list: Computer Sciences Corp., SAIC Inc. Agilent Technologies Inc., Intuit Inc.

It doesn't matter what Bloomberg said about them. The truth is Warren Buffett will never buy these companies. Call him stubborn if you want; Warren Buffett will never buy into anything he does not understand, that include pretty much most of the computer and electronic companies.

Investors in hi-tech companies do not have to feel at loss here. Warren Buffett may not buy any of the 50 companies in the list that Bloomberg presented. Each company has to stand on its own.

1. Computer Science Corp (CSC):

Computer Sciences Corp. offers a broad array of professional services to clients in the global commercial and government markets and specializes in the application of advanced and complex I/T to achieve its customers' strategic objectives. Its service offerings include outsourcing systems integration and I/T and management consulting and other professional services including e-business solutions.

Computer Sciences Corp. has a market cap of $5.56 billion; its shares were traded at around $36.72 with a P/E ratio of 9.3 and P/S ratio of 0.3. Computer Sciences Corp. had an annual average earning growth of 9.1% over the past 10 years. GuruFocus rated Computer Sciences Corp. the business predictability rank of 5-star.

Computer Sciences Corp. is owned by 3 Gurus. Two of them Gurus kept positions in CSC unchanged or slightly adjusted: Brian Rogers owns 3,000,000 shares as of 12/31/2008, which accounts for 0.78% of the $13.49 billion portfolio of T Rowe Price Equity Income Fund. Dodge & Cox owns 25,057,590 shares as of 12/31/2008, which accounts for 1.34% of the $65.51 billion portfolio of Dodge & Cox.

One Guru reduced positions in CSC: Richard Pzena owns 7,099 shares as of 12/31/2008, a decrease of 97.64% of from the previous quarter. This position accounts for less than 0.01% of the $8.6 billion portfolio of Pzena Investment Management LLC.

Guru Sold Out CSC: David Dreman sold out his holdings in the quarter that ended on 12/31/2008.

There is no insider trading activity recently.

2. SAIC Inc. (SAI)

SAIC INC is a scientific engineering and technology applications company that uses its knowledge to solve problems of vital importance to the nation and the world in national security, energy, and the environment critical infrastructure and health. The company's approximately 40000 employees serve customers in the Department of Defense the intelligence community the U.S. Department of Homeland Security other U.S. Government civil agencies and selected commercial markets.

SAIC Inc. has a market cap of $7.16 billion; its shares were traded at around $17.69 with a P/E ratio of 16.7 and P/S ratio of 0.8.

SAIC Inc. is owned by 1 Gurus. Ron Baron owns 2,890,666 shares as of 12/31/2008, which accounts for 0.53% of the $10.58 billion portfolio of Baron Funds.

1 Guru Sold Out SAI: Steve Mandel sold out his holdings in the quarter that ended on 12/31/2008.

Recent Trades of SAIC Inc. by Directors and Officers: Sell: Group President K Stuart Shea sold 3,500 shares of SAI stock on 01/07/2009 at the average price of $19.71; the price of the stock has decreased by 10.25% since.

3. Agilent Technologies Inc. (A)

Agilent Technologies is a measurement company and a technology leader in communications electronics, life sciences, and chemical analysis. Agilent has two primary business segments: Bio-Analytical Measurement and Electronic Measurement.

Agilent Technologies Inc. has a market cap of $5.71 billion; its shares were traded at around $15.96 with a P/E ratio of 8.7 and P/S ratio of 1.

Agilent Technologies Inc. is owned by 7 Gurus. 1 Guru Initiated Positions in A: Robert Olstein bought 347,023 shares in the quarter that ended on 12/31/2008, which is 1.14% of the $474 million portfolio of Olstein Financial Alert Fund.

1 Guru Increased Positions in A: NWQ Managers owns 15,629,352 shares as of 12/31/2008, an increase of 403.13% from the previous quarter. This position accounts for 1.6% of the $15.24 billion portfolio of NWQ Investment Management Co.

4 Gurus Kept Positions in A Unchanged or Slightly Adjusted: Dodge & Cox owns 12,677 shares as of 12/31/2008, which accounts for less than 0.01% of the $65.51 billion portfolio of Dodge & Cox. Chris Davis owns 27,260,866 shares as of 12/31/2008, which accounts for 0.81% of the $52.56 billion portfolio of Davis Selected Advisers. Jean-Marie Eveillard owns 637,800 shares as of 12/31/2008, which accounts for 0.13% of the $7.54 billion portfolio of Arnhold & S. Bleichroeder Advisers, LLC. Richard Snow owns 2,946,486 shares as of 12/31/2008, which accounts for 2.01% of the $2.29 billion portfolio of Snow Capital Management, L.P..

1 Guru Reduced Positions in A: PRIMECAP Management owns 249,349 shares as of 12/31/2008, a decrease of 30.3% of from the previous quarter. This position accounts for 0.01% of the $43.42 billion portfolio of PRIMECAP Management.

2 Gurus Sold Out A: John Keeley sold out his holdings in the quarter that ended on 12/31/2008. John Hussman sold out his holdings in the quarter that ended on 12/31/2008.

4. Intuit Inc. (INTU)

Intuit's mission is to revolutionize how people manage their financial activities. The company's objective is to greatly expand the world of electronic finance. Electronic finance encompasses three types of products and services: desktop software products that operate on customers' personal computers to automate financial tasks; products and services that are delivered via the Internet; and products and services that connect Internet-based services with desktop software to enable customers to integrate their financial activities.

Intuit Inc. has a market cap of $8.12 billion; its shares were traded at around $26.63 with a P/E ratio of 19.9 and P/S ratio of 2.7. Intuit Inc. had an annual average earning growth of 24.5% over the past 10 years. GuruFocus rated Intuit Inc. the business predictability rank of 3.5-star.

Intuit Inc. is owned by 1 Gurus. PRIMECAP Management owns 29,477,437 shares as of 12/31/2008, which accounts for 1.62% of the $43.42 billion portfolio of PRIMECAP Management.

One Guru Sold Out INTU: Richard Pzena sold out his holdings in the quarter that ended on 12/31/2008.

Recent Trades of Intuit Inc. by Directors and Officers: Sell: Chairman, Executive Committee Scott D Cook sold 500,000 shares of INTU stock on 02/24/2009 at the average price of $23.18; the price of the stock has increased by 14.88% since.


Rating: 3.8/5 (9 votes)

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