Barron's ran a featured article entitled Most Respected Companies. Their top pick:
Apple "for the second straight year, followed by Amazon and Berkshire Hathaway....
"...[Berkshire] garners respect for its lengthy history of operating and investment successes, and that leads straight to the boss—the plainspoken, octogenarian, Cherry-Coke sipping Wall Street legend, Warren Buffett.
"...investments in Goldman Sachs and General Electric (GE) helped stabilize both companies and give the financial markets a much-needed shot of confidence.... the market's Good Housekeeping Seal of Approval.....Buffett's 13EEE-size investment shoes will be difficult to fill when the master steps down. "Can Berkshire survive after Buffett's exit?" asks David Hartzell, CEO of Cornell Capital Management in upstate New York. "Yes, but it won't be the same company. This is even more of a question than at Apple. Is Berkshire's bench enough to hold an oddball conglomerate together?"
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Amazon's #2 ranking was a surprise to me.
Barron's: "It is very profitable and always investing for a better consumer experience…adding [retail] categories all the time," says Jim O'Donnell at San Francisco-based Forward Management. Amazon has a "phenomenal" core business and is going global, he adds. "It surprises you on innovation, too," says Pacific Income's Weary."
I thought Amazon has been doing a particularly poor job recently at cost control, with a lack of profitable growth - particularly with such high-incremental-margin categories as their electronic book segment had passed even their paperback sales volume.
Amazon's ROE track record, vs even brick-and-mortar Walmart:
2006 ROE
Amazon - 56.1% .... Walmart - 19.7%
2007 ROE
Amazon - 58.4% .... Walmart - 20.2%
2008 ROE
Amazon - 33.3% .... Walmart - 20.6%
2009 ROE
Amazon - 22.7% .... Walmart - 21.0%
2010 ROE
Amazon - 19.0% .... Walmart - 21-plus?
Meanwhile, from the value perspective assigned to that ROE, price/book:
Amazon - 12x book .... Walmart - 3x book
In their recent earnings discussions Amazon claimed this year's lack of earnings growth on their stellar sales growth was due to Warehouse openings - 'investment in the future' type of talk - but the P&L detail suggests that it's more across-the board lack of financial discipline.
Apple "for the second straight year, followed by Amazon and Berkshire Hathaway....
"...[Berkshire] garners respect for its lengthy history of operating and investment successes, and that leads straight to the boss—the plainspoken, octogenarian, Cherry-Coke sipping Wall Street legend, Warren Buffett.
"...investments in Goldman Sachs and General Electric (GE) helped stabilize both companies and give the financial markets a much-needed shot of confidence.... the market's Good Housekeeping Seal of Approval.....Buffett's 13EEE-size investment shoes will be difficult to fill when the master steps down. "Can Berkshire survive after Buffett's exit?" asks David Hartzell, CEO of Cornell Capital Management in upstate New York. "Yes, but it won't be the same company. This is even more of a question than at Apple. Is Berkshire's bench enough to hold an oddball conglomerate together?"
_____
Amazon's #2 ranking was a surprise to me.
Barron's: "It is very profitable and always investing for a better consumer experience…adding [retail] categories all the time," says Jim O'Donnell at San Francisco-based Forward Management. Amazon has a "phenomenal" core business and is going global, he adds. "It surprises you on innovation, too," says Pacific Income's Weary."
I thought Amazon has been doing a particularly poor job recently at cost control, with a lack of profitable growth - particularly with such high-incremental-margin categories as their electronic book segment had passed even their paperback sales volume.
Amazon's ROE track record, vs even brick-and-mortar Walmart:
2006 ROE
Amazon - 56.1% .... Walmart - 19.7%
2007 ROE
Amazon - 58.4% .... Walmart - 20.2%
2008 ROE
Amazon - 33.3% .... Walmart - 20.6%
2009 ROE
Amazon - 22.7% .... Walmart - 21.0%
2010 ROE
Amazon - 19.0% .... Walmart - 21-plus?
Meanwhile, from the value perspective assigned to that ROE, price/book:
Amazon - 12x book .... Walmart - 3x book
In their recent earnings discussions Amazon claimed this year's lack of earnings growth on their stellar sales growth was due to Warehouse openings - 'investment in the future' type of talk - but the P&L detail suggests that it's more across-the board lack of financial discipline.
