At the turn of the century, few observers could have possibly foreseen that Microsoft would become a favorite bargain purchase for value investors in 2010. The dot com boom was in the process of peaking and any company even vaguely associated with software or technology traded at stratospheric multiples of earnings. Ten years later, Microsoft is statistically cheap but is it a great potential investment or a classic “value trap”? Read this article for one opinion.
Ensco International plc is an offshore contract drilling company that provides services to oil majors and independent oil exploration firms. The company has historically focused on jackup rigs designed for relatively shallow water but has devoted the majority of capital expenditures in recent years to build up a fleet of semisubmersible rigs capable of deepwater operations. Ensco has a fleet of 45 mobile offshore drilling units comprised of four semisubmersibles, 40 jackups, and one barge rig. In addition, the company has one new semisubmersible unit ready for deployment in August and three semisubmersible units scheduled for delivery in 2011 and 2012. Read this article for more details.
Recent events in the Gulf of Mexico have increased awareness of the risks facing oil exploration companies operating in very deep waters. Drilling for oil beneath five thousand feet of water entails challenges that test the abilities of exploration companies under the best of circumstances. We are now witnessing the impotence of industry or government to deal with a well that has been gushing out of control for over a month. The current moratorium on deepwater drilling in the United States could be adopted by other countries as well and we cannot predict the duration of the moratorium. In this environment, is any investment in oil exploration or ancillary products and services worthy of consideration? This article examines National Oilwell Varco, one of the firms in the oil supplies and services industry.
Few large companies have built up as much brand equity and consumer goodwill as Johnson & Johnson. The company routinely appears near the top of lists of the most respected American companies and makes products that consumers rely on. The company’s prompt response to the Tylenol recalls in 1982 made it the subject of numerous case studies on how to properly handle such situations. Read this article to see whether J&J represents a good buying opportunity today.
Few books have been able to withstand the test of time in better form than The Intelligent Investor. Written by Benjamin Graham in 1949 as a guide to investing principles designed to be accessible to the general public, The Intelligent Investor clearly presents not only information regarding sound selection of securities but, perhaps more importantly, the correct mindset that separates true investors from speculators. For decades, Warren Buffett has recommended that readers pay particular attention to Chapters 8 and 20 covering how investors should think about market fluctuations and margin of safety. Read this article for Ben Graham’s views on “relatively unpopular large companies”.