A great interview old interview with Donald Yacktman. Definitely worth a watch.
Shareholders of Dover Corp. as of April 30, 2018 shall, effective May 9, 2018, receive 1 share of Apergy stock (APY) for every 2 shares of Dover stock (DOV) that they own pursuant to a tax-free spinoff that was announced in February.
Dover is an industrial powerhouse. Apergy is an upstream oil sector equipment manufacturer. Before we discuss the specifics of this transaction, let us take a brisk walk through the history books of corporate America first.
The book “Private Empire” tells the tale of Exxon’s rise in developing countries around the world throughout the 20th century. Exxon, which was the successor to John Rockefeller’s prized Standard Oil of New Jersey spinoff after the United States Supreme Court broke up the colossal Standard Oil, inherited the best managerial talent after the spinoff. When reading about how Exxon’s management team systematically rebuilt Exxon into a juggernaut all over again, I kept coming back to how the management team talked about maximizing and stabilizing the cash flows from its upstream oil and gas division.
Sometimes, the news item that the finance media fixates on is, in reality, the biggest news item of all. The news story that Buffett has bought an additional 75 million shares of Apple stock, supplementing the position of 166 million million shares that Berkshire Hathaway owned as of the annual report, bringing the total ownership position in the iPhone-maker to just a little over 241 million shares.
What I have not seen reported is how the immense Apple cash position relates to Buffett’s investment–i.e. Apple is sitting on $285 billion in cash while Apple is divided into just a tad over 5 billion shares outstanding, meaning that each share of Apple that you buy contains $57 in cash.
I was thinking about the news earlier today that Valeant Pharmaceuticals, the Canadian healthcare company that saw its stock price rise from $24 to $263 in the span of four years before cratering to a low of $8 in 2016, will change its corporate name to Bausch Health Cos. in July 2018.
This is clearly a no-brainer good move for the company. Brand names and intellectual property exist to serve you. If people pay a premium because of how they regard your brand, you should hold onto it for dear life (I cringe when I see investors throw away generations of good-will to name a business after themselves or to announce that a new sheriff is in town, as it throws away portions of the pricing power and customer base that had been acquired over time).
Over 99% of the content that I produce on The Conservative Income Investor is accessible through “The Income Archives” on the right-hand side of the website and available to all readers free of charge.
Every year or so, I come up with an insight that requires in-depth research and has a unique insight with great potential that is worthy of putting into eBook format as a fair compensation for the time that went into the research and development which stands a fair chance of having the greatest usefulness to the readership.