The Motley Fool's CAPS investing service is one of the newest additions to the investing community at Fool.com, and it's another great way for investors to work together to beat the market. One of the features in CAPS allows users to set up a blog to talk about their picks, investing strategy, market view, or their favorite baseball team (if they so desire).
I'm back again this week to bring you some more of the great content coming out of the Fools who have taken advantage of CAPS' blogs.
Berkshire
Hathaway recently bought ConocoPhillips
Heading back to the blog of CAPS All-Star weiwentg, we find a post on everyone's favorite insurer and Inside Value stalwart Berkshire Hathaway and its position in ConocoPhillips (NYSE:COP).
I just read that Berkshire Hathaway bought [shares of] ConocoPhillips. I assume they bought mid to late last year. Citizens Value, a small but pretty good [socially responsible investment] fund that I own personally, selected [Conoco] using a best-in-class approach (whereas most SRI funds pick BP (NYSE:BP) among the oil majors).
I picked [Conoco] because it was undervalued. Frankly, [Conoco] isn't the best of the oil majors. That would go to Exxon Mobil (NYSE:XOM), a company that is so irresponsible I will not even pick it in CAPS. Nonetheless, [Exxon] is the most profitable oil major. I think it would still have an economic moat if OPEC went out of business. [Conoco] might not.
Nonetheless, Berkshire has owned [Conoco] for some time. I think that's interesting, because Buffett hasn't typically gravitated towards energy firms. Their profits are unpredictable because of fluctuating oil and gas prices. Morningstar analysts have recently become pretty bullish on many natural gas firms, because they forecast higher gas prices in future, but the prices are volatile in the short run.
If I were Buffett, I would frankly have considered Exxon Mobil. Its ability to generate profit is impressive. If all but one of the oil majors goes out of business, [Exxon] will be the last one standing. He bought PetroChina (NYSE:PTR), after all, despite the accusations of involvement in genocide [in Sudan], so Exxon's sins should be small potatoes.
For more thoughts from the blog of weiwentg, click here.
$400 million for LEND?
Our second stop brings us back to another repeat guest on "Blog Buzz," rd80. In a post, rd80 took a look at the recently announced buyout of Accredited Home Lenders (NASDAQ:LEND).
Disclaimers: I have no stake in [Accredited] other than CAPS and Forbes' stock picking game. And, there's plenty I don't know about crunching through a balance sheet.
Lone Star V LP, a private equity firm, agreed to purchase Accredited Home Lenders for $400 million, or $15.10 per share. Interesting transaction given [the] rumors of [Accredited's] financial status.
Let's dig a little deeper -- oops, we can't -- the most recent public financial report filed by [Accredited] is for the quarter ended [Sept. 30,] 2006. Apparently, the only way you can learn about the company's financial status is if you're willing to lend them money (Farallon Capital) or make an offer (Lone Star). So, if you're an ordinary shareholder or interested party, there's no simple way to do any kind of analysis to see if this is a good offer. ...
Call me a skeptic, but this deal looks a little fishy. At a minimum, it doesn't seem right that a company that hasn't been able to report its [full] financials to shareholders for over six months is able to provide enough information to a private buyer for them to come up with a bid price.
I dug a little deeper myself, and it does seem that it would be difficult to for the average individual shareholder to evaluate the offer, given the lack of complete and up-to-date financial information on the company. Were I a shareholder, I might be somewhat comforted that in addition to the board's opinion on the offer, the company also received fairness opinions from Houlihan Lokey and Bear Stearns (NYSE:BSC). The company also has a good number of large shareholders -- including Farallon (10.5%), Second Curve Capital (10.1%), EARNEST Partners (8.5%), Cramer Rosenthal (8.1%), and Goldman Sachs (NYSE:GS) (3.8%) -- to contend with if the offer isn't adequate.
For more from the thought-provoking blog of rd80, click here.
Are the investment banks watching?
Wrapping us up for the week, we have CAPS newcomer GHGore providing a fun thought about who might be watching CAPS:
I wonder if any investment banking firms scout out CAPS and use a member's picks and success as a good qualifier to make a job offer.
I'll try to do better now. I need a job.
To keep track of more quickies from GHGore, click here.
And now it's your turn -- get off the sidelines, join CAPS, and start up your own CAPS blog to share your knowledge and insights with the rest of the CAPS universe.
Fool contributor Matt Koppenheffer shares some thoughts of his own on his CAPS blog. He owns shares of BP but does not own shares of any of the other companies mentioned. Berkshire Hathaway is a Motley Fool Stock Advisor and a Motley Fool Inside Value pick. The Fool's disclosure policy does not have its own CAPS blog, but if it did, it would blow your mind.
