Filed under: Magazines, Berkshire Hathaway (BRK.A), American Express (AXP), Merrill Lynch (MER), Wells Fargo (WFC)

According to Forbes, Bill Gates of Microsoft (NASDAQ:MSFT) is no longer the richest man in the US. The honor now belongs to Warren Buffett, the head of conglomerate Berkshire Hathaway (NYSE:BRK.A) Buffett is worth $62 billion to Gates $58 billion.

The news say more about the shift in the American business landscape than it does about anything else. The Berkshire Hathaway stock is up 30% over the last year, which Microsoft is flat. Since Berkshire owns an insurance company it would make sense that the financial crisis would hurt its value. But, Buffett has stayed away from the investments which have hurt other companies.

Microsoft may be a safe investment now with its large cash position and steady income from Windows, but it is probably no longer a growth stock. Microsoft software runs on 95% of the world’s PCs and many of its servers. That leaves the question of what the company can do to expand rapidly again. The answer may be that it can’t.

Buffett’s company is in over a hundred businesses. He can make the argument that diversification is the foundation of a successful corporation. The firm’s operations make everything from uniforms for police to concrete block, roofing systems to fabrics. Berkshire also owns large parts of companies from American Express (NYSE:AXP) to Wells Fargo (NYSE:WFC).

The new Forbes ranking shows that a large bucket of good investment trumps owning a piece of a successful company in a market which is no longer growing quickly.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Google (GOOG)

Founded in 1953, Heidrick & Struggles (NASDAQ: HSII) has become one of the top executive search firms. Hey, one of the firm’s plumb assignments was for the CEO of Google (NASDAQ: GOOG), Eric Schmidt.

Well, according to Heidrick & Struggles’ latest quarterly report, the business continues to do just fine. Revenue came to $153.6 million, up 16.1%. Net income spiked 36.3% to $9.2 million.

If anything, the current turbulent economic environment is a growth driver. After all, there has been lots of turnover in the C-suite. For example, according to a report from Challenger Gray & Christmas, there were 134 CEO departures in January.

Something else: there is growth in areas like Europe, Asia and even the Middle East.

But Heidrick & Struggles realizes that it needs to reinvent its business. To this end, the firm is looking at some interesting online ventures.

For example, Heidrick & Struggles recently invested in VisualCV, which provides a Web 2.0 approach for resumes.

What’s more, it also looks like Heidrick & Struggles wants to set up its own social networking platform - similar to the popular LinkedIn service. It’s an interesting idea and focuses on the importance of social connections in the executive-recruiting game.

Actually, the service will be private, which I’m sure is critical for high-paid executives.

Yet, there is definitely some risk: do busy executives really have enough time for such things?

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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Filed under: Magazines, Berkshire Hathaway (BRK.A), American Express (AXP), Merrill Lynch (MER), Wells Fargo (WFC)

According to Forbes, Bill Gates of Microsoft (NASDAQ:MSFT) is no longer the richest man in the US. The honor now belongs to Warren Buffett, the head of conglomerate Berkshire Hathaway (NYSE:BRK.A) Buffett is worth $62 billion to Gates $58 billion.

The news say more about the shift in the American business landscape than it does about anything else. The Berkshire Hathaway stock is up 30% over the last year, which Microsoft is flat. Since Berkshire owns an insurance company it would make sense that the financial crisis would hurt its value. But, Buffett has stayed away from the investments which have hurt other companies.

Microsoft may be a safe investment now with its large cash position and steady income from Windows, but it is probably no longer a growth stock. Microsoft software runs on 95% of the world’s PCs and many of its servers. That leaves the question of what the company can do to expand rapidly again. The answer may be that it can’t.

Buffett’s company is in over a hundred businesses. He can make the argument that diversification is the foundation of a successful corporation. The firm’s operations make everything from uniforms for police to concrete block, roofing systems to fabrics. Berkshire also owns large parts of companies from American Express (NYSE:AXP) to Wells Fargo (NYSE:WFC).

The new Forbes ranking shows that a large bucket of good investment trumps owning a piece of a successful company in a market which is no longer growing quickly.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Stocks to Buy

For the most part, I usually argue here against buying shares of investment companies, but there are exceptions, and American Capital Strategies is one.

American Capital Strategies (NASDAQ: ACAS) invests in middle-market companies through 12 offices in the United States and Europe. Typically, it invests up to $800 million to fund management and employee buyouts, private equity firm buyouts, acquisitions, and restructurings.

Analysts like ACAS’s projected asset growth rate for 2008, including alternative assets managed through external funds.

Further, portfolio income should increase via the improved pricing of recent investments; fee income should also perform well, due to fund management business expansion. Analysts also like ACAS’s very good track record of returning capital to shareholders. The Reuters F2008/F2009 EPS consensus estimates for ACAS are $3.31/$3.46.

The risks? Analysts are keeping an eye on possible, further write-downs associated with externally managed funds.

The First Call mean rating for ACAS is: Hold [19 firms]. Mean 2008 target: $37 [high: $50, low: $34].

Stock Analysis: American Capital Strategies is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from ACAS’s shares. Sell/Stop Loss if you were to purchase shares in this company: $22.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

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Filed under: Google (GOOG)

Founded in 1953, Heidrick & Struggles (NASDAQ: HSII) has become one of the top executive search firms. Hey, one of the firm’s plumb assignments was for the CEO of Google (NASDAQ: GOOG), Eric Schmidt.

Well, according to Heidrick & Struggles’ latest quarterly report, the business continues to do just fine. Revenue came to $153.6 million, up 16.1%. Net income spiked 36.3% to $9.2 million.

If anything, the current turbulent economic environment is a growth driver. After all, there has been lots of turnover in the C-suite. For example, according to a report from Challenger Gray & Christmas, there were 134 CEO departures in January.

Something else: there is growth in areas like Europe, Asia and even the Middle East.

But Heidrick & Struggles realizes that it needs to reinvent its business. To this end, the firm is looking at some interesting online ventures.

For example, Heidrick & Struggles recently invested in VisualCV, which provides a Web 2.0 approach for resumes.

What’s more, it also looks like Heidrick & Struggles wants to set up its own social networking platform - similar to the popular LinkedIn service. It’s an interesting idea and focuses on the importance of social connections in the executive-recruiting game.

Actually, the service will be private, which I’m sure is critical for high-paid executives.

Yet, there is definitely some risk: do busy executives really have enough time for such things?

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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Filed under: Wal-Mart (WMT)

The Wal-Mart Stores, Inc. (NYSE: WMT) spin machine is in full force today. The first line from a recent press release from the company: “This month, Wal-Mart Stores, Inc. will open 81 new stores and clubs across the country, providing jobs for 26,000 associates.”

Economist Paul Krugman wrote about the company’s questionable status as a job creation machine back in 2005:

… Adding 100,000 people to Wal-Mart’s work force doesn’t mean adding 100,000 jobs to the economy. On the contrary, there’s every reason to believe that as Wal-Mart expands, it destroys at least as many jobs as it creates, and drives down workers’ wages in the process … The new store takes sales away from stores that are already in the area; these stores lay off workers or even go out of business. Because Wal-Mart’s big-box stores employ fewer workers per dollar of sales than the smaller stores they replace, overall retail employment surely goes down, not up, when Wal-Mart comes to town.

I don’t have a strong position on whether Wal-Mart is good or evil. It’s probably somewhere in the middle. But there’s something disingenuous about trumpeting the creation of jobs using the gross number of hires with no mention of the fact that many jobs at other stores will be lost. I’m not saying Wal-Mart doesn’t have a right to move in and put people out of business. That’s capitalism. But bragging about job creation without taking that into account? That’s some pretty serious spin.

Wal-Mart added that it’s also building two new “High-Efficiency (HE.2) prototypes designed to significantly reduce greenhouse gas emissions and use 25 percent less energy than a standard Wal-Mart Supercenter.”

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Filed under: Stocks to Buy

For the most part, I usually argue here against buying shares of investment companies, but there are exceptions, and American Capital Strategies is one.

American Capital Strategies (NASDAQ: ACAS) invests in middle-market companies through 12 offices in the United States and Europe. Typically, it invests up to $800 million to fund management and employee buyouts, private equity firm buyouts, acquisitions, and restructurings.

Analysts like ACAS’s projected asset growth rate for 2008, including alternative assets managed through external funds.

Further, portfolio income should increase via the improved pricing of recent investments; fee income should also perform well, due to fund management business expansion. Analysts also like ACAS’s very good track record of returning capital to shareholders. The Reuters F2008/F2009 EPS consensus estimates for ACAS are $3.31/$3.46.

The risks? Analysts are keeping an eye on possible, further write-downs associated with externally managed funds.

The First Call mean rating for ACAS is: Hold [19 firms]. Mean 2008 target: $37 [high: $50, low: $34].

Stock Analysis: American Capital Strategies is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from ACAS’s shares. Sell/Stop Loss if you were to purchase shares in this company: $22.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

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Filed under: Intuit Inc (INTU)

The personal finance software space is certainly large and lucrative — especially as seen with Intuit Inc. (NASDAQ: INTU)’s Quicken. Yet, the software is not necessarily easy and has tons of features that are likely to be overwhelming.

Well, Mint.com sees this as an opportunity and operates a fairly simple web-based personal finance site that uses some cool Web 2.0 features. In fact, the company has announced that it has raised $12 million in venture capital and the lead investor is Benchmark Capital, which is a tier-1 firm.

On several occasions, I’ve talked to Mint.com’s CEO and founder, Aaron Patzer. He has provided me with a demo of the system — and it’s super easy to use (funny enough, he even gave me a demo of his personal account).

Something else: Mint.com has found ways to analyze your finances to provide cost-savings, such as with credit cards and so on. Actually, in light of the slowing economy, this is definitely attractive. After all, since the site’s launch in September 2007, there are now more than 160,000 users. What’s more, Mint.com has identified more than $100 million in potential savings.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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Filed under: Wal-Mart (WMT)

The Wal-Mart Stores, Inc. (NYSE: WMT) spin machine is in full force today. The first line from a recent press release from the company: “This month, Wal-Mart Stores, Inc. will open 81 new stores and clubs across the country, providing jobs for 26,000 associates.”

Economist Paul Krugman wrote about the company’s questionable status as a job creation machine back in 2005:

… Adding 100,000 people to Wal-Mart’s work force doesn’t mean adding 100,000 jobs to the economy. On the contrary, there’s every reason to believe that as Wal-Mart expands, it destroys at least as many jobs as it creates, and drives down workers’ wages in the process … The new store takes sales away from stores that are already in the area; these stores lay off workers or even go out of business. Because Wal-Mart’s big-box stores employ fewer workers per dollar of sales than the smaller stores they replace, overall retail employment surely goes down, not up, when Wal-Mart comes to town.

I don’t have a strong position on whether Wal-Mart is good or evil. It’s probably somewhere in the middle. But there’s something disingenuous about trumpeting the creation of jobs using the gross number of hires with no mention of the fact that many jobs at other stores will be lost. I’m not saying Wal-Mart doesn’t have a right to move in and put people out of business. That’s capitalism. But bragging about job creation without taking that into account? That’s some pretty serious spin.

Wal-Mart added that it’s also building two new “High-Efficiency (HE.2) prototypes designed to significantly reduce greenhouse gas emissions and use 25 percent less energy than a standard Wal-Mart Supercenter.”

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Filed under: Walgreen Co (WAG), CVS Corp (CVS)

I love going to the drugstore. Whether it’s CVS (NYSE: CVS) or my neighborhood Walgreen (NYSE: WAG), I love the convenience of being able to buy everything I need and everything I don’t need in one place. I buy lots of Entenmann’s donuts, toothpaste, and school supplies at my local store. And now, I may be able to get a flu shot at the store as well.

The New York Times ran an article today entitled “Should Pharmacists Give Flu Shots?” It seems New York City has been suffering from increasingly bad flu seasons. To combat such breakouts, the city is now attempting to pass a bill allowing pharmacists to give flu and pneumonia shots.

The same article quoted the Department of Health as saying that influenza is “now widespread in New York City, with more than 1,000 flu-related visits to emergency rooms each day. Some 20 percent of the current flu vaccine supply is unused.”

I feel my local drugstore is competent to sell me nail clippers and gum, but do we really want these stores dispensing medical services?

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

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