Plenty Of Stocks To Fit Warren Buffett's Criteria!!!

With over $25 billion in cash to deploy it looks as if the worlds greatest investor Warren Buffet could put some of that to work according to a recent Bloomberg article. Buffett looks for companies who have high returns on equity(ROE), low debt/equity ratio, competent management and stable cash flow. This is only the second time since 1965 that the book value of Berkshire Hathaway $BRKA has wound up in the negative column. Even after one of the worst years in recent history, Buffett's Berkshire Hathaway has still managed to compound its book value at over 20% per year annually during the course of the last 44 years. Three stocks high lighted in the article are Sysco $SYY, VF Corp. $VF, and Danaher $DHR. However there are over 50 stocks mentioned here which gives the value investor a good starting point to further research and possibly invest in some of the same stocks as Buffett himself.

Can Kraft Feed Buffett's Appetite?

One of Warren Buffett's stocks takes it on the chin this morning by posting a 72% decline in profits and trimming forecast for 2009. Kraft Foods(KFT) is trading down -$2.49 to $26.25 in pre-market this morning 2/4/2009. Kraft is the #2 food maker in the WORLD! Buffett usually makes Few but BIG bets and says his holding time frame is forever. I guess when you get to be the size of Berkshire Hathaway(BRKA,BRKB) you do have to hold a long time. Buffet likes companies with good steady cash flows which Kraft has and seems to be passing this on to shareholders in dividends which have been growing steadily. The current dividend is yielding over 4%. Keep in mind WALL STREET likes to focus on earnings, however the Intelligent Investor should focus on the the underlying business and its cash flows. Organic revenue for the 4 quarter and the year 2008 just ended grew 4.4% and 6.6% respectively. Here's a look at Kraft's(KFT) RECENT REPORT dated February 4th 2009.

Author long KFT

A Few More Ben Graham Nuggets

• These stocks come very close to meeting Ben Grahams criteria:
  
  All issues mentioned have a current ratio better than 1.5, a book value under 1.5, a p/e ratio under 15, positive eps growth over last 5 years, very low or no debt, and pay a dividend. 8 out of 10 companies have earned money for last 10 years straight while 2 companies have been positive for at least 8 of those 10.
  
  Abercrombie (ANF)- A specialty retailer catering towards the younger crowd. This one surprised me to be on this list. Has a high ROE that has averaged over 30+ % for last 10 years.
  
  Ashland Inc.(ASH)- A well run diversified chemical company trading at a sales ratio of .17 and 43% of book value.
  
  Bel Fuse(BELFB)- Manufacturers electronic components trading at 2x cash.
  
  Movado(MOV)- Another retailer that manufacturers and markets fine watches and jewelry.
  
  Nam Thai Electronics(NTE)- Electronics company that has increased cash flow over last 6 years straight. Value investors the Kahn Brothers (Irving Kahn served as teaching assistant to Ben Graham in the 1930's) have stake in company.
  
  Seaboard(SEB)- Insiders own 72% as well as the Kahn Brothers.
  
  Thor Industries(THO)- The largest manufacturer of recreation vehicles and a major builder of small buses. Insiders own 36%.
  
  
  These are not recomendations but ideas to further study before investing
  
  STOCKMANMARC