Tuesday, September 2, 2014

12 Stocks Warren Buffett Loves in 2014

NEW YORK (Stockpickr) -- At Stockpickr, we track the top holdings of a variety of high-profile investors, such as George Soros and Carl Icahn. Read More: Warren Buffett's Top 10 Dividend Stocks It should come as no surprise that the most popular of these portfolios is that of renowned investor Warren Buffett, CEO of Berkshire Hathaway and one of the richest people in the world. Today we're taking a closer look at 12 stocks that Buffett bought in the most recently reported quarter, based on Berkshire Hathaway's most recent quarterly 13F filing with the SEC, which reflects holdings as of June 30, 2014. They are ordered by position size. 12. Charter Communications Charter Communications comprises 0.3% of Berkshire Hathaway's portfolio. The 2.3 million-share position was a new buy in the most recently reported quarter. The stock shows up on a recent list of Goldman Sachs' 50 Stocks That Matter Most to Hedge Funds and was featured recently in "Warren Buffett's Berkshire Hathaway Reveals Bets on Cable Industry." Charter Communications is also a top holding in George Soros' portfolio. TheStreet Ratings team rates Charter Communications a hold with a Ratings score of C. TheStreet Ratings team has this to say about its recommendation: "We rate Charter Communications (CHTR) a hold. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins." Highlights from the analysis by TheStreet Ratings team are as follows: CHTR's revenue growth has slightly outpaced the industry average of 12.4%. Since the same quarter one year prior, revenues rose by 14.6%. Growth in the company's revenue appears to have helped boost the earnings per share. Powered by its strong earnings growth of 56.25% and other important driving factors, this stock has surged by 30.00% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year. The gross profit margin for Charter Communications is currently lower than what is desirable, coming in at 34.53%. Regardless of CHTR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CHTR's net profit margin of -1.99% significantly underperformed when compared to the industry average. The debt-to-equity ratio is very high at 117.81 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.16, which clearly demonstrates the inability to cover short-term cash needs. You can view the full analysis from the report here: CHTR Ratings Report Read More: 10 Stocks George Soros Is Buying 11. Visa Visa comprises 0.4% of Berkshire Hathaway's portfolio. The 1.8 million-share position is a 15.7% increase over the previous quarter. Visa is also a top holding in Ken Fisher's portfolio. TheStreet Ratings team rates Visa a buy with a Ratings score of A. TheStreet Ratings team has this to say about its recommendation: "We rate Visa (V) a buy. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow." Highlights from the analysis by TheStreet Ratings Team goes as follows: The revenue growth came in higher than the industry average of 12.2%. Since the same quarter one year prior, revenues slightly increased by 5.1%. Growth in the company's revenue appears to have helped boost the earnings per share. V has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.45, which illustrates the ability to avoid short-term cash problems. Visa has improved earnings per share by 15.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, Visa increased its bottom line by earning $7.58 versus $3.13 in the prior year. This year, the market expects an improvement in earnings ($8.98 versus $7.58). The gross profit margin for Visa is rather high; currently it is at 67.48%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 43.10% significantly outperformed against the industry average. The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels. You can view the full analysis from the report here: V Ratings Report Read More: 7 Stocks Warren Buffett Is Selling in 2014 10. Liberty Global Liberty Global comprises 0.4% of Berkshire Hathaway's portfolio. The 9.9 million-share position is a 34.3% increase over the previous quarter.. Liberty Global is also a top holding in Steve Mandel's Lone Pine Capital portfolio. John Griffin's Blue Ridge Capital sold out of the position in the most recently reported quarter. TheStreet Ratings team rates Liberty Global a hold with a Ratings score of C. TheStreet Ratings team has this to say about its recommendation: "We rate Liberty Global (LBTYA) a hold. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity." Highlights from the analysis by TheStreet Ratings Team goes as follows: LBTYA's very impressive revenue growth greatly exceeded the industry average of 12.4%. Since the same quarter one year prior, revenues leaped by 50.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share. Net operating cash flow has significantly increased by 102.44% to $1,596.30 million when compared to the same quarter last year. In addition, Liberty Global has also vastly surpassed the industry average cash flow growth rate of 14.05%. The gross profit margin for Liberty Global is rather high; currently it is at 62.64%. Regardless of LBTYA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LBTYA's net profit margin of -5.43% significantly underperformed when compared to the industry average. Although LBTYA's debt-to-equity ratio of 3.72 is very high, it is currently less than that of the industry average. Along with this, the company manages to maintain a quick ratio of 0.28, which clearly demonstrates the inability to cover short-term cash needs. Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Media industry and the overall market, LIBERTY GLOBAL PLC's return on equity significantly trails that of both the industry average and the S&P 500. You can view the full analysis from the report here: LBTYA Ratings Report Read More: 10 Stocks Carl Icahn Loves in 2014 9. VeriSign VeriSign comprises 0.6 of Berkshire Hathaway's portfolio. The 13 million-share position is a 11.1% increase over the previous quarter.. The stock shows up on a recent list of Warren Buffett's Top 25 Stocks for 2014. VeriSign is also a top holding in Renaissance Technologies' portfolio. TheStreet Ratings team rates VeriSign a buy with a Ratings score of B-. TheStreet Ratings team has this to say about its recommendation: "We rate VeriSign (VRSN) a buy. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, expanding profit margins, increase in stock price during the past year and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow." Highlights from the analysis by TheStreet Ratings team are as follows: The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Internet Software & Services industry average. The net income increased by 15.3% when compared to the same quarter one year prior, going from $86.89 million to $100.18 million. VRSN's revenue growth trails the industry average of 19.9%. Since the same quarter one year prior, revenues slightly increased by 4.6%. Growth in the company's revenue appears to have helped boost the earnings per share. The gross profit margin for VeriSign is currently very high, coming in at 88.07%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 40.00% significantly outperformed against the industry average. Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year. VeriSign has improved earnings per share by 29.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, VeriSign increased its bottom line by earning $3.54 versus $1.91 in the prior year. For the next year, the market is expecting a contraction of 23.2% in earnings ($2.72 versus $3.54). You can view the full analysis from the report here: VRSN Ratings Report Read More: Warren Buffett's Top 10 Dividend Stocks 8. Chicago Bridge & Iron Chicago Bridge & Iron comprises 0.7% of Berkshire Hathaway's portfolio. The 10.7 million-share position is a 12% increase over the previous quarter.. The stock shows up on a recent list of Warren Buffett's Top 25 Stocks for 2014. TheStreet Ratings team rates Chicago Bridge & Iron a buy with a Ratings score of B-. TheStreet Ratings team has this to say about its recommendation: "We rate Chicago Bridge & Iron (CBI) a buy. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, impressive record of earnings per share growth, compelling growth in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow." Highlights from the analysis by TheStreet Ratings Team goes as follows: The revenue growth came in higher than the industry average of 11.5%. Since the same quarter one year prior, revenues rose by 15.6%. Growth in the company's revenue appears to have helped boost the earnings per share. Chicago Bridge & Iron has improved earnings per share by 33.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, Chicago Bridge & Iron increased its bottom line by earning $4.18 versus $3.07 in the prior year. This year, the market expects an improvement in earnings ($5.15 versus $4.18). The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction & Engineering industry. The net income increased by 34.3% when compared to the same quarter one year prior, rising from $106.04 million to $142.40 million. Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Construction & Engineering industry and the overall market, Chicago Bridge & Iron's return on equity exceeds that of both the industry average and the S&P 500. In its most recent trading session, CBI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year. You can view the full analysis from the report here: CBI Ratings Report Read More: 10 Stocks George Soros Is Buying 7. Suncor Energy Suncor Energy comprises 0.7% of Berkshire Hathaway's portfolio. The 16.5 million-share position is a 26.6% increase over the previous quarter.. The stock shows up on a recent list of Warren Buffett's Top 25 Stocks for 2014. Suncor is also a top holding in Julian Robertson's Tiger Management portfolio. TheStreet Ratings team rates Suncor Energy a buy with a Ratings score of B. TheStreet Ratings team has this to say about its recommendation: "We rate Suncor Energy (SU) a buy. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income." Highlights from the analysis by TheStreet Ratings team are as follows: The revenue growth came in higher than the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 8.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share. SU's debt-to-equity ratio is very low at 0.27 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.05, which illustrates the ability to avoid short-term cash problems. Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year. Suncor Energy has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, Suncor Energy increased its bottom line by earning $2.59 versus $1.74 in the prior year. You can view the full analysis from the report here: SU Ratings Report Read More: 7 Stocks Warren Buffett Is Selling in 2014 6. Verizon Verizon comprises 0.7% of Berkshire Hathaway's portfolio. The 15 million-share position is a 36.1% increase over the previous quarter.. The stock was featured recently in "3 Stocks Reiterated as a Buy: BMY, VZ, GILD." Verizon is also a top holding in John Paulson's portfolio. TheStreet Ratings team rates Verizon a buy with a Ratings score of B. TheStreet Ratings team has this to say about its recommendation: "We rate Verizon (VZ) a buy. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, compelling growth in net income, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated." Highlights from the analysis by TheStreet Ratings team are as follows: VZ's revenue growth has slightly outpaced the industry average of 1.5%. Since the same quarter one year prior, revenues slightly increased by 5.7%. Growth in the company's revenue appears to have helped boost the earnings per share. The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, Verizon's return on equity significantly exceeds that of both the industry average and the S&P 500. The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 87.6% when compared to the same quarter one year prior, rising from $2,246.00 million to $4,214.00 million. Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year. The gross profit margin for Verizon is rather high; currently it is at 61.61%. Regardless of VZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VZ's net profit margin of 13.38% compares favorably to the industry average. You can view the full analysis from the report here: VZ Ratings Report Read More: 10 Stocks Carl Icahn Loves in 2014 5. USG USG comprises 1.1% of Berkshire Hathaway's portfolio. The 39 million-share position is a 11.8% increase over the previous quarter.. The stock shows up on a recent list of Warren Buffett's Top 25 Stocks for 2014 and was featured recently on RealMoney in "3 Materially Strong Stocks." TheStreet Ratings team rates USG a hold with a Ratings score of C. TheStreet Ratings team has this to say about its recommendation: "We rate USG (USG) a hold. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins." Highlights from the analysis by TheStreet Ratings team are as follows: USG's revenue growth has slightly outpaced the industry average of 2.4%. Since the same quarter one year prior, revenues slightly increased by 3.5%. Growth in the company's revenue appears to have helped boost the earnings per share. Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock. The gross profit margin for USG is rather low; currently it is at 21.31%. Regardless of USG's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, USG's net profit margin of 6.01% compares favorably to the industry average. The debt-to-equity ratio is very high at 2.79 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, USG's quick ratio is somewhat strong at 1.46, demonstrating the ability to handle short-term liquidity needs. You can view the full analysis from the report here: USG Ratings Report Read More: Warren Buffett's Top 10 Dividend Stocks 4. General Motors General Motors comprises 1.1% of Berkshire Hathaway's portfolio. The 1.2 million-share position is a 9.9% increase over the previous quarter.. The stock shows up on a recent list of Goldman Sachs' 50 Stocks That Matter Most to Hedge Funds and was featured recently in "22 Auto Industry Stocks to Consider for Your Portfolio." General Motors is also a top holding in George Soros' portfolio. TheStreet Ratings team rates General Motors a buy with a Ratings score of B. TheStreet Ratings team has this to say about its recommendation: "We rate General Motors (GM) a buy. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income." Highlights from the analysis by TheStreet Ratings Team goes as follows: The revenue growth came in higher than the industry average of 11.5%. Since the same quarter one year prior, revenues slightly increased by 1.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share. The debt-to-equity ratio is somewhat low, currently at 0.95, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.81 is somewhat weak and could be cause for future problems. General Motors has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, General Motors reported lower earnings of $2.35 versus $2.93 in the prior year. This year, the market expects an improvement in earnings ($2.71 versus $2.35). In its most recent trading session, GM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels. Net operating cash flow has decreased to $3,830.00 million or 21.72% when compared to the same quarter last year. Despite a decrease in cash flow of 21.72%, General Motors is in line with the industry average cash flow growth rate of -29.34%. You can view the full analysis from the report here: GM Ratings Report Read More: 10 Stocks George Soros Is Buying 3. U.S. Bancorp U.S. Bancorp comprises 3.2% of Berkshire Hathaway's portfolio. The 80.1 million-share position is a 0.1% increase over the previous quarter. The stock was featured recently in "U.S. Bank Tops the 5 Best-Managed Financial Institutions to Trade." TheStreet Ratings team rates U.S. Bancorp a buy with a Ratings score of A-. TheStreet Ratings team has this to say about its recommendation: "We rate U.S. Bancorp (USB) a buy. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, increase in net income, growth in earnings per share and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity." Highlights from the analysis by TheStreet Ratings team are as follows: The revenue growth came in higher than the industry average of 15.3%. Since the same quarter one year prior, revenues slightly increased by 3.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share. The gross profit margin for U.S. Bancorp is currently very high, coming in at 87.58%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.22% significantly outperformed against the industry average. The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks industry average. The net income increased by 0.7% when compared to the same quarter one year prior, going from $1,484.00 million to $1,495.00 million. U.S. Bancorp's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, U.S. Bancorp increased its bottom line by earning $3.01 versus $2.84 in the prior year. This year, the market expects an improvement in earnings ($3.10 versus $3.01). The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year. You can view the full analysis from the report here: USB Ratings Report Read More: 7 Stocks Warren Buffett Is Selling in 2014 2. Wal-Mart Wal-Mart comprises 4.1% of Berkshire Hathaway's portfolio and is Buffett's fifth-largest holding. The 58.8 million-share position is a 1.3% increase over the previous quarter. TheStreet Ratings team rates Wal-Mart a buy with a Ratings score of B+. TheStreet Ratings team has this to say about its recommendation: "We rate Wal-Mart Stores (WMT) a buy. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, reasonable valuation levels, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated." Highlights from the analysis by TheStreet Ratings Team goes as follows: WMT's revenue growth has slightly outpaced the industry average of 4.6%. Since the same quarter one year prior, revenues slightly increased by 2.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share. The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Food & Staples Retailing industry average. The net income increased by 0.6% when compared to the same quarter one year prior, going from $4,069.00 million to $4,093.00 million. Wal-Mart Stores' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, Wal-Mart Stores reported lower earnings of $4.86 versus $5.01 in the prior year. This year, the market expects an improvement in earnings ($5.03 versus $4.86). The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Food & Staples Retailing industry and the overall market, Wal-Mart Stores' return on equity exceeds that of both the industry average and the S&P 500. You can view the full analysis from the report here: WMT Ratings Report Read More: 10 Stocks Carl Icahn Loves in 2014 1. IBM International Business Machines comprises 11.8% of Berkshire Hathaway's portfolio and is Buffett's fourth-largest holding. The 12.7 million-share position is a 2.7% increase over the previous quarter. The stock shows up on a recent list of Warren Buffett's Top 25 Stocks for 2014 and was featured recently in "Buffett's Berkshire Hathaway's Top Stock Holdings: How to Trade Them." IBM is also a top holding in Renaissance Technologies' portfolio. TheStreet Ratings team rates IBM a buy with a Ratings score of B. TheStreet Ratings team has this to say about its recommendation: "We rate International Business Machines (IBM) a buy. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, notable return on equity, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated." Highlights from the analysis by TheStreet Ratings Team goes as follows: International Business Machines has improved earnings per share by 41.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, International Business Machines increased its bottom line by earning $15.02 versus $14.41 in the prior year. This year, the market expects an improvement in earnings ($17.90 versus $15.02). The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the IT Services industry average. The net income increased by 28.2% when compared to the same quarter one year prior, rising from $3,226.00 million to $4,137.00 million. Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the IT Services industry and the overall market, International Business Machines' return on equity significantly exceeds that of both the industry average and the S&P 500. Net operating cash flow has increased to $3,579.00 million or 12.75% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -2.61%. The gross profit margin for International Business Machines is rather high; currently it is at 54.45%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 16.97% trails the industry average. You can view the full analysis from the report here: IBM Ratings Report Read More: Warren Buffett's Top 10 Dividend Stocks To see these stocks in action, visit the 12 Stocks Warren Buffett Is Buying portfolio. For Warren Buffett's top 30 holdings, visit the Warren Buffett portfolio at Stockpickr.


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