I recently read Robert Hagstrom's "Investing: The Last Liberal Art", a tome that has some fascinating insights for any investor.�The book is full of wisdom from Charlie Munger, longtime investing partner and confidant of Warren Buffett. Munger believes great investors are great thinkers, and great thinking involves the ability to recognize and apply metaphors.
For those readers who are not English majors, a metaphor is a linguistic concept used to compare seemingly unrelated objects or concepts. But more important than the definition is the thought process behind metaphors, the ability to make connections in the real world. It might seem strange to think that Shakespeare's "summer's day" has any relation to investment performance, but the rewards of metaphorical thinking become clear in the context of sustainable competitive advantages.
In a metaphorical sense, great businesses build "economic moats" that allow them to ward off competition year after year.�An "economic moat" is a competitive advantage that serves as a protective barrier for a business; a business with a strong "moat" can maintain high profit margins and market share even in the face of competition.�There are many types of competitive advantages and they often differ across sectors, but not all competitive advantages are sustainable.
Seaboard Corporation operates as a diversified agribusiness and transportation company worldwide. Its Pork division engages in hog production and pork processing; and the production and sale of fresh and frozen pork products, such as lunchmeat, ham, bacon, sausage, loins, tenderloins, and ribs, as well as further processed pork products, including raw and pre-cooked bacon to further processors, foodservice operators, grocery stores, distributors, and retail outlets under the Prairie Fresh and Daily's brand names. This division also produces and sells biodiesel from pork and other animal fats to third parties. The company?s Commodity Trading and Milling division sources, transports, and markets wheat, corn, soybean meal, rice, and other commodities, as well as operates flour, feed, and maize milling businesses. Its Marine division provides containerized cargo shipping service to 26 countries between the United States, the Caribbean Basin, and central and South America; and operates a terminal at the Port of Miami, an off-dock warehouse for cargo consolidation and temporary storage, and a cargo terminal at the Port of Houston for temporary storage of bagged grains, resins, and other cargo. As of December 31, 2010, it operated 10 owned and approximately 29 chartered vessels; and dry, refrigerated, and specialized containers and other related equipment. The company?s Sugar division produces and refines sugar cane, produces alcohol, and purchases and resells sugar to retailers, soft drink manufacturers, and food manufacturers in Argentina. Its Power division operates as an independent power producer in the Dominican Republic operating 2 floating barges with a system of diesel engines with combined capacity of approximately 112 megawatts of electricity. Seaboard Corporation also purchases and processes jalapeno peppers in the United States. The company was founded in 1928 and is based in Shawnee Mission, Kansas. Seaboard Corporation is a subsidiary of Seaboard Flour LLC.
Advisors' Opinion: - [By John Udovich]
Thanksgiving is around the corner�meaning investors might want to take a closer look at turkey stocks�like Hormel Foods Corporation (NYSE: HRL), Seaboard Corporation (NYSEMKT: SEB) and Industrias Bachoco, S.A.B. de C.V. (NYSE: IBA)���the last major�publicly traded turkey stocks available for investors. Moreover, the Wall Street Journal has pointed out that corn prices are the lowest in more than three years and fewer birds are in production as some producers cut back on their flocks this year due to weaker turkey commodity prices.�Feed prices, which make up about 70% of the cost of a turkey, had soared with the price of corn which hit the $8 a bushel level but a recent�bumper crop has sent corn prices plunging to about the $4 a bushel level.
- [By Monica Gerson]
Meat Products:
This industry fell 0.85% by 11:00 am ET. Seaboard Corp. (NYSE: SEB) shares dropped 1.5% in today's trading. Seaboard shares have jumped 42.33% over the past 52 weeks, while the S&P 500 index has surged 13.04% in the same period.
Top Warren Buffett Companies To Invest In 2014: Interactive Intelligence Inc.(ININ)
Interactive Intelligence, Inc. provides software application suites for voice over Internet protocol (VoIP) business communications to enterprises in the United States and internationally. The company offers software products and services for contact center, enterprise IP telephony, multichannel contact management, and business process automation. Its solutions include Interactive Intelligence Customer Interaction Center that provides contact centers and enterprises a single platform and a pre-integrated all-in-one application solution for IP telephony, including phone calls, faxes, e-mails, and Web interactions; Interactive Intelligence Customer Interaction Center for the Enterprise, an IP PBX phone and communications system for SIP-supported VoIP for mid-sized and larger enterprises, as well as offers real-time presence management and remote access with unified messaging, IVR and interaction client integrations for Microsoft applications; Interaction Process Automation t hat allows an organization to capture, prioritize, route, escalate, and track each step in a work process; and Interaction Content Management solution. The company also provides professional, managed, education, and support services. Its solutions are used by businesses and organizations that employ remote and mobile workers in teleservices, financial services, insurance, higher education, utilities, healthcare, retail, technology, government, and business services industries. The company distributes its products through partners and direct arrangements with end-user customers. Interactive Intelligence, Inc. was founded in 1994 and is headquartered in Indianapolis, Indiana.
Advisors' Opinion: - [By Garrett Cook]
Shares of Interactive Intelligence Group (NASDAQ: ININ) were down 15.47 percent to $42.25 as the company warned that Q2 results will be below expectations.
- [By Garrett Cook]
Shares of Interactive Intelligence Group (NASDAQ: ININ) were down 15.29 percent to $42.34 as the company warned that Q2 results will be below expectations.
Top Warren Buffett Companies To Invest In 2014: Integrated Electrical Services Inc.(IESC)
Integrated Electrical Services, Inc. provides electrical infrastructure services in the United States. The company?s Communications segment offers various services, including the design, installation, and maintenance of network infrastructure for the financial, medical, hospitality, government, manufacturing, educational, and information technology industries; design and installation of audio/visual, telephone, fire, wireless, and intrusion alarm systems, as well as design/build, servicing, and maintenance of data network systems. Its Residential segment offers electrical installation services for single-family housing and multi-family apartment complexes, and CATV cabling installations for residential and commercial applications. This segment also installs residential solar power, smart meters, electric car charging stations, and stand-by generators. The company?s Commercial and Industrial segment provides electrical contracting services, which include the design of ele ctrical systems in a building or complex; procurement and installation of wiring and connection to power sources; end-use equipment and fixtures; and contract maintenance services. It also provides service, maintenance, and renovation and upgrade work services; and services for various projects, including high-rise residential and office buildings, power plants, manufacturing facilities, data centers, chemical plants, refineries, wind farms, solar facilities, municipal infrastructure, and health care facilities, as well as residential developments. In addition, this segment offers utility services consisting of overhead and underground installation and maintenance of electrical and other utilities transmission and distribution networks; installation and splicing of high-voltage transmission and distribution lines; substation construction; and substation and right-of-way maintenance. Integrated Electrical Services, Inc. was founded in 1997 and is based in Houston, Texas.
Advisors' Opinion: - [By GuruFocus]
Integrated Electrical Services Inc. (IESC): President and CEO James M. Lindstrom Bought 1,901 Shares
President and CEO of Integrated Electrical Services Inc. (IESC) James M. Lindstrom bought 1,901 shares on 09/25/2013 at an average price of $4.08. Integrated Electrical Services Inc. has a market cap of $73.0559 million; its shares were traded at around $4.08 with and P/S ratio of 0.13.
Top Warren Buffett Companies To Invest In 2014: Federated National Holding Co (FNHC)
Federated National Holding Company (Federated National), formerly 21st Century Holding Company, is an insurance holding company, which through its subsidiaries and its contractual relationships with its independent agents and general agents, controls all aspects of the insurance underwriting, distribution and claims processes. Federated National is authorized to underwrite homeowners��multi-peril (homeowners), personal umbrella, commercial general liability, following form commercial excess liability, personal and commercial automobile, fire, allied lines, workers��compensation, business personal property and commercial inland marine insurance. On January 26, 2011, Federated National merged into the Company�� other wholly owned subsidiary, American Vehicle Insurance Company (American Vehicle), with resulting entity being Federated National.
Federated National markets and distributes its own and third-party insurers��products and its other services through a network of independent agents. The Company also utilize a select number of general agents for the same purpose. During 2010, the Company processed property and liability claims stemming from its homeowners�� commercial general liability and private passenger automobile lines of business. Through contractual relationships with a network of approximately 4,200 independent agents, of which approximately 400 sell and service its products, Federated National is authorized to underwrite homeowners�� fire, allied lines and personal automobile insurance in Florida.
American Vehicle is licensed as an admitted carrier in Florida, and underwrites commercial general liability, and personal and commercial automobile insurance. American Vehicle is also licensed as an admitted carrier in Alabama, Louisiana, Georgia and Texas, and underwrites commercial general liability insurance in those states. American Vehicle operates as a non-admitted carrier in Arkansas, California, Kentucky, Maryland, Missouri, Nevada, Oklahoma, South ! Carolina, Tennessee and Virginia, and can underwrite commercial general liability insurance in all of these states. During 2010, 79.7%, 12.3%, 4.1% and 3.9% of the premiums the Company underwrote were for homeowners�� commercial general liability, federal flood, and personal automobile insurance, respectively. Federated National internally processes claims made by its insured through its wholly owned claims adjusting company, Superior Adjusting, Inc. (Superior). It also offers premium financing to its own and third-party insured through its wholly owned subsidiary, Federated Premium Finance, Inc. (Federated Premium).
Homeowners��Property and Casualty Insurance
Federated National underwrites homeowners��insurance primarily in the South, West and Central Florida regions. Homeowners��insurance protects an owner of real and personal property against covered causes of loss to that property. The Company�� homeowner insurance products provide maximum dwelling coverage in the amount of approximately $0.8 million, with the aggregate maximum policy limit being approximately $1.5 million. Premium rates are regulated and approved by the Florida OIR.
Commercial Residential Property Insurance
The Florida OIR has granted Federated National the authority to write commercial residential property insurance under the fire line of business. This class of business affords property coverage primarily to associations with property commonly owned by the tenants of the association. Aggregate policy limits ranged between $1.0 million and $20 million. Additionally, Federated National has secured automatic facultative reinsurance for insured values up to $10 million with permission to individually submit attractive risks greater than $10 million to its reinsurers for quote and binding authority.
Commercial General Liability and Inland Marine
The Company underwrite commercial general liability insurance for approximately 350 classes of artisan ! (excludin! g home-builders and developers) and mercantile trades (such as owners, landlords and tenants). The limits of liability range from $100,000 per occurrence with a $200,000 policy aggregate to $1 million per occurrence with a $2 million policy aggregate. The Company markets the commercial general liability insurance products through independent agents and a limited number of general agencies unaffiliated with the Company.
Personal Automobile
Personal automobile insurance markets can be divided into two categories: standard automobile and nonstandard automobile. Standard personal automobile insurance is provided to insureds who present an average risk profile in terms of driving record, vehicle type and other factors. Nonstandard personal automobile insurance is provided to insureds that are unable to obtain standard insurance coverage because of their driving record, age, vehicle type or other factors, including market conditions. During 2010, the average annual premium on policies was approximately $1,325, and the nonstandard personal automobile insurance lines represented 100% of its written premiums for personal automobile insurance. Federated National underwrites new and renewal policies for this coverage on primarily an annual basis and to a much lesser extent, on a semi-annual basis. American Vehicle underwrites standard personal automobile insurance policies.
Flood
Federated National writes flood insurance through the National Flood Insurance Program (NFIP). The Company writes the policy for the NFIP, which assumes 100% of the flood risk while it retains a commission for its service. The average flood policy premium is approximately $570 with limits up to $250,000.
Assurance MGA
Assurance MGA, a wholly owned subsidiary of Federated National, acts as Federated National�� and American Vehicle�� exclusive managing general agent in the state of Florida and is also licensed as a managing general agent in the states of Al! abama, Ar! kansas, Georgia, Illinois, Louisiana, North Carolina, Mississippi, Missouri, New York, Nevada, South Carolina, Texas and Virginia. Assurance MGA has contracted with several unaffiliated insurance companies to sell commercial general liability, workers compensation, personal umbrella and inland marine insurance through Assurance MGA�� existing network of agents. Assurance MGA earns commissions and fees for providing policy administration, marketing, accounting and analytical services, and for participating in the negotiation of reinsurance contracts. The homeowner policy provides Assurance MGA the right to cancel any policy within a period of 90 days from the policy's inception with 25 days��notice, or after 90 days from policy inception with 95 days��notice, even if the risk falls within its underwriting criteria.
Superior
Superior processes claims made by insured from Federated National and American Vehicle. Its agents have no authority to settle claims or otherwise exercise control over the claims process. Federated National also employs an in-house legal department to manage claims-related litigation and to monitor its claims handling practices for compliance.
Federated Premium
Federated Premium provides premium financing to Federated National's, American Vehicle�� and third-party�� insureds. Premium financing has been marketed through the Company�� distribution network of general agents and independent agents. Premiums for property and casualty insurance, in certain circumstances, are payable at the time a policy is placed in- force or renewed. Federated Premium's services allow the insured to pay a portion of the premium when the policy is placed in-force and the balance in monthly installments over a specified term, between six and nine months.
Insure-Link, Inc. (Insure-Link)
Insure-Link serves as an independent insurance agency. The insurance agency markets direct to the public to provide a variety of in! surance p! roducts and services to individual clients, as well as business clients, by offering a line of insurance products, including, but not limited to, homeowners�� personal and commercial automobile, commercial general liability and workers��compensation insurance through their agency appointments with over fifty different carriers. There were no other agency relationships with affiliated captive or franchised agents during 2010.
The Company competes with Castle Key (formerly Allstate Floridian) Indemnity Insurance Company, Fidelity National Insurance Company, Universal Property and Casualty Insurance Company, Royal Palm Insurance Company, St. Johns Insurance Company, Cypress Property and Casualty Insurance Company, American Strategic Insurance Company, Century Surety Insurance Company, Atlantic Casualty Insurance Company, Colony Insurance Company, Burlington/First Financial Insurance Companies, Kingsway Amigo Insurance Company, United Automobile Insurance Company, Direct General Insurance Company, Ocean Harbor Insurance Company, Progressive Casualty Insurance Company, and GEICO.
Advisors' Opinion: - [By Damian Illia]
As we can see, the firm ratio is higher than the ones shown by Alleghany, Fidelity, Federated National Holding Co. (FNHC) and Global Indemnity Plc (GBLI).
Top Warren Buffett Companies To Invest In 2014: EV Energy Partners LP (EVEP)
EV Energy Partners, L.P. (the Partnership) is engaged in the acquisition, development and production of oil and natural gas properties. As of December 31, 2011, the Company's properties were located in the Barnett Shale, the Appalachian Basin (which includes the Utica Shale), the Mid Continent areas in Oklahoma, Texas, Arkansas, Kansas and Louisiana, the San Juan Basin, the Monroe Field in Northern Louisiana, the Permian Basin, Central and East Texas (which includes the Austin Chalk area), and Michigan. On November 1, 2011, the Company acquired oil and natural gas properties in the Mid Continent area. On December 1, 2011, the Company along with certain institutional partnerships managed by EnerVest, acquired oil and natural gas properties in the Barnett Shale. It acquired a 31.02% proportional interest in these properties. On December 20, 2011, the Company, along with certain institutional partnerships managed by EnerVest, acquired additional oil and natural gas properties in the Barnett Shale. It acquired a 31.63% proportional interest in these properties. On February 7, 2012, the Company along with certain institutional partnerships managed by EnerVest, had a second closing on the oil and natural gas properties, and acquired a 31.63% proportional interest in these properties.
Barnett Shale
The Barnett Shale properties are located in Denton, Parker, Tarrant and Wise counties in Northern Texas. Its portion of the estimated net proved reserves as of December 31, 2011, was 647.4 one billion cubic feet equivalent (Bcfe), 72% of which is natural gas. During 2011, the Company drilled 35 wells. EnerVest operates wells representing 100% of its estimated net proved reserves in this area, and the Company owns an average 29% working interest in 976 gross productive wells.
Appalachian Basin
The Company�� activities are concentrated in the Ohio and West Virginia areas of the Appalachian Basin. Its Ohio area properties are producing from the Knox and Clinton f! ormations and other Devonian age sands in 41 counties in Eastern Ohio and 11 counties in Western Pennsylvania. Its West Virginia area properties are producing from the Balltown, Benson and Big Injun formations in 23 counties in North Central West Virginia. Its estimated net proved reserves as of December 31, 2011, were 126.4 Bcfe, 76% of which is natural gas. During 2011, it drilled 33 grosswells, 26 of which were completed. EnerVest operates wells representing 92% of its estimated net proved reserves in this area, and it owns an average 41% working interest in 8,670 gross productive wells.
Mid-Continent Area
The properties are located in 47 counties in Oklahoma, 17 counties in Texas, four parishes in North Louisiana, one county in Kansas and six counties in Arkansas. The Company�� estimated net proved reserves as of December 31, 2011, were 81.2 Bcfe, 63% of which is natural gas. During 2011, it drilled 82 wells, all of which were completed. EnerVest operates wells representing 33% of its estimated net proved reserves in this area, and it owns an average 12% working interest in 1,864 gross productive wells.
San Juan Basin
The properties are located in Rio Arriba County, New Mexico and La Plata County in Colorado. The Company�� estimated net proved reserves as of December 31, 2011, 68.6 Bcfe, 59% of which is natural gas. During 2011, it drilled two wells, one of which were completed. EnerVest operates wells representing 94% of its estimated net proved reserves in this area, and it owns an average 71% working interest in 227 gross productive wells.
Monroe Field
The properties are located in two parishes in Northeast Louisiana. The Company�� estimated net proved reserves as of December 31, 2011, were 60.9 Bcfe, 100% of which is natural gas. During 2011, it drilled one well, which was completed. EnerVest operates wells representing 100% of its estimated net proved reserves in this area, and it owns an average 100% working i! nterest i! n 3,930 gross productive wells.
Permian Basin
The properties are located in the Yates, Seven Rivers, Queen, Morrow, Clear Fork and Wichita Albany formations in four counties in New Mexico and Texas. The Company�� estimated net proved reserves as of December 31, 2011, were 54.1Bcfe, 37% of which is natural gas. During 2011, it did not drill any wells. EnerVest operates wells representing 99% of its estimated net proved reserves in this area, and it owns an average 93% working interest in 160 gross productive wells.
Central and East Texas
The properties produce primarily from the Austin Chalk formation and are located in 30 counties in Central and East Texas. Its portion of the estimated net proved reserves as of December 31, 2011 was 60.9 Bcfe, 46% of which is natural gas. During 2011, the Company drilled 16 gross wells, 15 of which were completed. EnerVest operates wells representing 93% of its estimated net proved reserves in this area, and it owns an average 12% working interest in 1,829 gross productive wells.
Michigan
The properties are located in the Antrim Shale reservoir in Otsego and Montmorency counties in northern Michigan. The Company�� estimated net proved reserves as of December 31, 2011, were 44.9 Bcfe, 100% of which is natural gas. During 2011, it did not drill any wells. EnerVest operates wells representing 99% of its estimated net proved reserves in this area, and it has an average 84% working interest in 370 gross productive wells.
Advisors' Opinion: - [By Imperiya]
Over the past few years, government bonds have produced almost zero income for investors. This has led to many people searching high and low for income opportunities. High-yield bonds (though recently falling out of favor) and dividend factories have benefited greatly from this search. MLPs fall into this category, as distribution yields have grown. One such MLP, EV Energy Partners (EVEP), is currently yielding over 8%, which is why it landed high on the list of stock screens. After careful analysis, it is easy to realize there is more to this company than a great yield can tell us.
- [By Robert Rapier]
3. EV Energy Partners
EV Energy Partners (Nasdaq: EVEP) was the worst-performing oil and gas MLP. The partnership was plagued by cash flow problems, and as a result units declined by 40 percent for the year. At the most recent closing price, units yield 9.1 percent, but EVEP will likely need more cash flow in 2014 to support that yield.
4. CVR Partners
- [By Matt DiLallo]
One area investors really need to drill deeper into is the company's reserve base, which will give you a better idea of how it's producing the income needed to support the large distribution. Today, we're going to drill down into the reserves of EV Energy Partners (NASDAQ: EVEP ) to get a better idea of what an investor is actually buying when adding units to their portfolio.
Top Warren Buffett Companies To Invest In 2014: Imperial Holdings Inc. (IFT)
Imperial Holdings, Inc., through its subsidiaries, operates as a specialty finance company in the United States. The company operates in two business segments: Life Finance and Structured Settlements. The Life Finance segment comprises life settlements and finance loan businesses. The Structured Settlement segment purchases structured settlements at a discounted rate and sells such assets to third parties. This segment primarily markets its products through the Internet and television. Imperial Holdings, Inc. was founded in 2006 and is based in Boca Raton, Florida.
Advisors' Opinion: - [By DCResearch]
Imperial Holdings (IFT) fits the bill for all of those traits and investors today can buy Imperial Holdings for less than 0.75x book value. Upside to book value, an obvious valuation factor for most financial companies, would result in a greater than 40% return for a patient investor. I believe that this is far below the fair value for IFT�� book of life settlements, and upside is in excess of $13 per share.
- [By Whopper Investments]
Note: This is my response to the recent short case on Imperial Finance (IFT). Obviously, all humans are fallible, and I'm sure someone can find just as much to argue with my long case as I found to argue with his short case. Please read for yourself, do your own research, and make your own decision. I am long IFT and plan on fully participating in the rights offering.
Top Warren Buffett Companies To Invest In 2014: DRDGOLD Ltd (DRD)
DRDGOLD Limited (DRDGOLD), incorporated on February 16, 1895, is a South Africa-based surface gold retreatment company. DRDGOLD operates in a single segment, Ergo. Ergo is a surface retreatment operation and treats old slime and sand dumps to the south of Johannesburg�� central business district, as well as the east and central Rand goldfields. The operation consists of four plants: Brakpan, Crown, City and Knights. Included in the Ergo segment is the East Rand Proprietary Mines Limited (ERPM) surface operation comprise the Cason retreatment operation. Ergo is evaluating the viability of processing surface uranium- and sulphur-bearing tailings on the east and central Rand goldfields of South Africa. The Company�� business includes Crown Gold Recoveries (Pty) Limited (Crown), Ergo Mining (Pty) Limited (Ergo JV) and ErgoGold are jointly referred to as ERGO and ERPM. On June 1, 2012, the Company disposed of its 74% interest in and loan claims against Blyvoor.
The Company�� focus is on the recovery of lower-risk, lower-cost, higher-margin ounces. As of October 9, 2012, 68% of production comes from surface retreatment operation. The company holds a 74%-interest in operating subsidiary Ergo Mining Operations (Proprietary) Limited. Crown is the gold surface tailings retreatment facility, reprocessing the large and numerous sand and slimes dumps along the reefs that stretch from east to west just to the south of Johannesburg�� central business district (CBD). Crown�� major project is Top Star, a tailings dam to the south of Johannesburg�� CBD. ERPM is situated on the Witwatersrand Basin near the town of Boksburg, 25 kilometers to the east of Johannesburg. The Ergo as a joint venture between DRDGOLD and Mintails Limited. Wholly owned by the DRDGOLD group, Ergo has a network of surface rights that provide access to a further 600 million tons of surface tailings deposited across the western, central and eastern Witwatesrand. Ergo has three tailings deposition facilities. ERPM continues ! as a surface retreatment operation. It holds 65% of ErgoGold through the contribution of its Elsburg Tailings Complex.
Advisors' Opinion: - [By Monica Gerson]
DRDGOLD (NYSE: DRD) shares fell 4.09% to reach a new 52-week low of $4.66. DRDGOLD's trailing-twelve-month profit margin is -1.61%.
InnerWorkings (NASDAQ: INWK) shares dipped 34.83% to touch a new 52-week low of $6.19 after the company reported downbeat Q3 results and issued a weak FY13 outlook.
- [By Garrett Cook]
Basic materials shares gained 0.10 percent in trading on Friday. Meanwhile, top gainers in the sector included DRDGOLD (NYSE: DRD), up 8.2 percent, and LyondellBasell Industries NV (NYSE: LYB), up 4.79 percent.