Management turnover has hindered the company's expansion and
investors are starting to grow
about a finding successor for their 83-year-old CEO, the eminent
For now, however, Buffett continues in his role as the proverbial
king of value investing, making leadership changes and publicly
criticizing the "
" of Washington on TV.
And, as today's huge price changes in both
(OTCMKTS:BURBY) illustrate, leadership can have a huge impact on a
stock's share price.
It can be hard for value investors to make money if a stock doesn't
have much of an upswing. That's why value investors usually buy
during periods of economic uncertainty, as Buffett did during the
financial crisis. Those investments netted him over $10 billion so
far, as the
Wall Street Journal
this past weekend.
Investing Ideas: The Warren Buffett Portfolio
Taking a page out of Warren Buffett's playbook, we decided to
screen the 40 biggest publicly traded holdings that are listed in
(NYSE:BRK.A) portfolio for profitability. Are any stocks surpassing
even Buffett's astute expectations?
To do that we looked at gross, operating, and pre-tax margins over
trailing twelve months (TTM)
, which together give a picture of how efficiently a company has
been building its profits over the course of the last year.
Companies beating their industry average may be poised for future
And as a value investor, Buffett considers other factors besides
leadership and margins, such a as low price-to-equity ratio (P/E).
So for comparison, we included the P/E ratio for the five stocks
left on our list.
Do you follow the investing strategies of Warren Buffett? Use the
list below as a starting point for your own analysis.
1. Mastercard Incorporated
): Provides transaction processing and related services to
customers principally in support of their credit, deposit access,
electronic cash and automated teller machine payment card programs,
and travelers' cheque programs. Market cap at $83.38B, most recent
closing price at $689.10.
P/E Ratio: 28.49.
TTM gross margin at 58.11% vs. industry average at 50.62%.
TTM operating margin at 55.% vs. industry average at 30.76%.
TTM pretax margin at 54.96% vs. industry average at 30.66%.
2. Moody's Corp.
(NYSE:MC): Provides credit ratings and related research, data, and
analytical tools; risk management software; and quantitative credit
risk measures, credit portfolio management solutions, and training
services in the United States, Europe, the Middle East, and Africa.
Market cap at $15.92B, most recent closing price at $71.62.
P/E Ratio: 21.44.
TTM gross margin at 71.79% vs. industry average at 55.6%.
TTM operating margin at 39.99% vs. industry average at 34.16%.
TTM pretax margin at 37.7% vs. industry average at 19.55%.
3. M&T Bank Corporation
): Operates as the holding company for M&T Bank and M&T
Bank, National Association that provide commercial and retail
banking services to individuals, corporations and other businesses,
and institutions. Market cap at $14.73B, most recent closing price
P/E Ratio: 12.97.
TTM gross margin at 89.68% vs. industry average at 75.08%.
TTM operating margin at 52.66% vs. industry average at 45.12%.
TTM pretax margin at 38.2% vs. industry average at 25.14%.
4. Torchmark Corp.
): Provides individual life and supplemental health insurance
products, and annuities to middle income households. Market cap at
$6.76B, most recent closing price at $73.29.
P/E Ratio: 12.99.
TTM gross margin at 23.28% vs. industry average at 16.46%.
TTM operating margin at 23.28% vs. industry average at 13.64%.
TTM pretax margin at 20.85% vs. industry average at 11.95%.
5. US Bancorp
): Provides various banking and financial services in the United
States. Market cap at $68.52B, most recent closing price at $37.18.
P/E Ratio: 12.69.
TTM gross margin at 83.69% vs. industry average at 75.08%.
TTM operating margin at 51.99% vs. industry average at 45.12%.
TTM pretax margin at 36.2% vs. industry average at 25.14%.
This story by James Dennin originally appeared on
Kapitall's lists break complex concepts down to their basics,
offering education and investing ideas to novices that double as a
refresher course for more seasoned investors. Inspired by video
game design, Kapitall's revolutionary brokerage platform combines a
graphical user interface with tools that make it easy to build
portfolios, share ideas and execute trades.
Read more from Kapitall:
Green Investments, Green Returns: 11
Eco-Friendly ETFs to Consider
Banksy Index: 5 Stocks You Shouldn't Gloss Over
Deal or No Deal: 6 Stocks Under 5 Bucks With Buy