One of Buffett's most controversial bets — a bubble - era wager on the long -
term value of stock market indexes, using tools he once scorned as «weapons of financial mass destruction» — started to pay off in the fourth quarter.
Not exact matches
The Chairman
of the Board John Thompson defended the package, saying that the
stock payment «motivates our CEO to create sustainable long
term shareholder
value by providing him with the opportunity to share in those gains.»
Graham's philosophy
of «
value investing» — which shields investors from substantial error and teaches them to develop long -
term strategies — has made The Intelligent Investor the
stock market bible ever since its original publication in 1949.»
Simply put, a deal that offers participating preferred
stock creates a lower implied valuation for your business than a plain vanilla
term sheet with no participation feature, because the investors will end up with a disporportionately higher piece
of the
value created.
Such risks, uncertainties and other factors include, without limitation: (1) the effect
of economic conditions in the industries and markets in which United Technologies and Rockwell Collins operate in the U.S. and globally and any changes therein, including financial market conditions, fluctuations in commodity prices, interest rates and foreign currency exchange rates, levels
of end market demand in construction and in both the commercial and defense segments
of the aerospace industry, levels
of air travel, financial condition
of commercial airlines, the impact
of weather conditions and natural disasters and the financial condition
of our customers and suppliers; (2) challenges in the development, production, delivery, support, performance and realization
of the anticipated benefits
of advanced technologies and new products and services; (3) the scope, nature, impact or timing
of acquisition and divestiture or restructuring activity, including the pending acquisition
of Rockwell Collins, including among other things integration
of acquired businesses into United Technologies» existing businesses and realization
of synergies and opportunities for growth and innovation; (4) future timing and levels
of indebtedness, including indebtedness expected to be incurred by United Technologies in connection with the pending Rockwell Collins acquisition, and capital spending and research and development spending, including in connection with the pending Rockwell Collins acquisition; (5) future availability
of credit and factors that may affect such availability, including credit market conditions and our capital structure; (6) the timing and scope
of future repurchases
of United Technologies» common
stock, which may be suspended at any time due to various factors, including market conditions and the level
of other investing activities and uses
of cash, including in connection with the proposed acquisition
of Rockwell; (7) delays and disruption in delivery
of materials and services from suppliers; (8) company and customer - directed cost reduction efforts and restructuring costs and savings and other consequences thereof; (9) new business and investment opportunities; (10) our ability to realize the intended benefits
of organizational changes; (11) the anticipated benefits
of diversification and balance
of operations across product lines, regions and industries; (12) the outcome
of legal proceedings, investigations and other contingencies; (13) pension plan assumptions and future contributions; (14) the impact
of the negotiation
of collective bargaining agreements and labor disputes; (15) the effect
of changes in political conditions in the U.S. and other countries in which United Technologies and Rockwell Collins operate, including the effect
of changes in U.S. trade policies or the U.K.'s pending withdrawal from the EU, on general market conditions, global trade policies and currency exchange rates in the near
term and beyond; (16) the effect
of changes in tax (including U.S. tax reform enacted on December 22, 2017, which is commonly referred to as the Tax Cuts and Jobs Act
of 2017), environmental, regulatory (including among other things import / export) and other laws and regulations in the U.S. and other countries in which United Technologies and Rockwell Collins operate; (17) the ability
of United Technologies and Rockwell Collins to receive the required regulatory approvals (and the risk that such approvals may result in the imposition
of conditions that could adversely affect the combined company or the expected benefits
of the merger) and to satisfy the other conditions to the closing
of the pending acquisition on a timely basis or at all; (18) the occurrence
of events that may give rise to a right
of one or both
of United Technologies or Rockwell Collins to terminate the merger agreement, including in circumstances that might require Rockwell Collins to pay a termination fee
of $ 695 million to United Technologies or $ 50 million
of expense reimbursement; (19) negative effects
of the announcement or the completion
of the merger on the market price
of United Technologies» and / or Rockwell Collins» common
stock and / or on their respective financial performance; (20) risks related to Rockwell Collins and United Technologies being restricted in their operation
of their businesses while the merger agreement is in effect; (21) risks relating to the
value of the United Technologies» shares to be issued in connection with the pending Rockwell acquisition, significant merger costs and / or unknown liabilities; (22) risks associated with third party contracts containing consent and / or other provisions that may be triggered by the Rockwell merger agreement; (23) risks associated with merger - related litigation or appraisal proceedings; and (24) the ability
of United Technologies and Rockwell Collins, or the combined company, to retain and hire key personnel.
But short
term, investors think
stocks are fully
valued, with the S&P seen rising just 1 percent for the rest
of the year.
Buyback proponents say they reward these long -
term shareholders by effectively increasing their ownership
of the company, and they help boost the
value of a
stock by raising the company's earnings per share.
His evidence: rising short rates, low long -
term rates (suggestive
of little inflation), the rise in
value stocks, and outperformance in emerging markets relative to U.S. equities.
While short -
term stock price movements should normally not be a concern for boards, nearly halving the
value of the
stock in less than nine months warrants some attention — and a look at the board's practices.
While T. Rowe Price doesn't build a
stock portfolio based on potential takeover candidates, Umbarger says, that possibility has lately become a bigger part
of the investment discussion at the firm, in
terms of «How could you
value it in the eyes
of other beholders?»
The company's ESOP - training plan calls for role - playing games to help employees better understand their impact on
stock value as well as a series
of what - if exercises to help explain the delicate balance between short -
term profit taking and long -
term growth needs.
Just how Tribune (TPUB) would mount a hostile takeover bid for Gannett (GCI), a company that is more than four times its size in
terms of stock - market
value, is unclear.
Just consider the financial risks entrepreneurs run, for example, if they give company
stock to their children as part
of a long -
term estate - planning strategy — only to have the IRS step in years later and challenge the claimed taxable
value of the gifts.
His deep -
value philosophy can be boiled down to four points: he's looking for high - quality
stocks that protect against the downside; he wants businesses where short -
term issues have caused investors to abandon the company; he wants to wait until valuations are «out -
of - this - world» cheap, and he tries not to pay attention to macro issues like eurozone debt or Chinese growth.
«But if you look at hundreds
of examples, you find that
stock buybacks do increase long -
term value.»
In August 2012, to create incentives for continued long -
term success from the then - recently launched Model S program as well as from Tesla's then - planned Model X and Model 3 programs, and to further align executive compensation with increases in stockholder
value, the Board granted to Mr. Musk a
stock option award to purchase 5,274,901 shares
of Tesla's common
stock (the «2012 CEO Performance Award»), representing 5 %
of Tesla's total issued and outstanding shares at the time
of grant.
First, consistent with our other equity vehicles, OSUs deliver
value in the form
of Intel common
stock, focusing the leadership team on ensuring the long -
term viability
of the company.
At present I would suggest that there is large scale deflation at present as property
values unwind worldwide, this will be followed by falling
stock values as investors realize that large sectors
of investment returns are also headed for long
term decline.
As discussed in the CD&A under «Compensation Components» and «Achieving Compensation Objectives — Pay for Performance,» we have provided incentive compensation in the form
of an annual cash incentive award based on Company, business line and individual qualitative performance results for each fiscal year, and long -
term incentive compensation generally in the form
of stock option grants and, in certain circumstances, RSRs to reward our SEOs for contribution to growth in long -
term stockholder
value.
Subject to the provisions
of our 2015 Plan, the administrator will determine the other
terms of stock appreciation rights, including when such rights become exercisable and whether to pay any amount
of appreciation in cash, shares
of our Class A common
stock, or a combination thereof, except that the per share exercise price for the shares to be issued pursuant to the exercise
of a
stock appreciation right must be no less than 100 %
of the fair market
value per share on the date
of grant.
The
term of an incentive
stock option may not exceed ten years, except that with respect to any participant who owns more than 10 %
of the voting power
of all classes
of our outstanding
stock, the
term must not exceed five years and the exercise price must equal at least 110 %
of the fair market
value on the grant date subject to the provisions
of our 2015 Plan.
As described above, a portion
of an executive's target long -
term incentive amount is delivered in the form
of PRUs, and the remaining
value is awarded in grants
of time - based restricted
stock units.
Long -
term compensation, generally in the form of stock option grants under our Long - Term Incentive Compensation Plan (LTICP), to reward named executives for contributions to growth in stockholder value over the long t
term compensation, generally in the form
of stock option grants under our Long -
Term Incentive Compensation Plan (LTICP), to reward named executives for contributions to growth in stockholder value over the long t
Term Incentive Compensation Plan (LTICP), to reward named executives for contributions to growth in stockholder
value over the long
termterm;
This leads to a fundamental belief among
value investors that although the
stock market may, in the short -
term, wildly depart from the fundamentals
of a business, in the long - run the fundamentals are all that matter.
One - half
of the
value of the long -
term incentive award is awarded in the form
of stock options.
The majority
of my investments are in long -
term funds, but for my non-retirement account, I like to put that MBA to work and find the best
value stocks I can.
The perennial appeal
of value investing is based on the excellent long -
term performance
of global
value stocks.
In
terms of valuation, Valeant Pharmaceuticals
stock currently trades at TTM price to sales
value of 0.58 x and price to book
value of 1.40 x.
Very few
stocks in the S&P are priced to deliver long -
term returns
of 10 % annually, and even this view assumes that recent earnings can be taken at face
value.
Provided, however, that an incentive
stock option held by a participant who owns more than 10 %
of the total combined voting power
of all classes
of our
stock, or
of certain
of our parent or subsidiary corporations, may not have a
term in excess
of five years and must have an exercise price
of at least 110 %
of the fair market
value of our common
stock on the grant date.
This is lower volatility than many other
stocks in percentage
terms, but because
of the high
stock price (absolute, not a reflection
of value) the moves are large in absolute dollar
terms.
Subject to the provisions
of our 2016 Plan, the administrator determines the other
terms and conditions
of stock appreciation rights, including when such rights become exercisable and whether to pay any increased appreciation in cash or with shares
of our common
stock, or a combination thereof, except that the per share exercise price for the shares to be issued pursuant to the exercise
of a
stock appreciation right will be no less than 100 %
of the fair market
value per share on the date
of grant.
Subject to the provisions
of our 2010 Plan, the administrator determines the
terms of stock appreciation rights, including when such rights vest and become exercisable and whether to settle such awards in cash or with shares
of our common
stock, or a combination thereof, except that the per share exercise price for the shares to be issued pursuant to the exercise
of a
stock appreciation right will be no less than 100 %
of the fair market
value per share on the date
of grant.
Subject to the provisions
of our 2013 Plan, the administrator determines the other
terms of stock appreciation rights, including when such rights become exercisable and whether to pay any increased appreciation in cash or with shares
of our common
stock, or a combination thereof, except that the per share exercise price for the shares to be issued pursuant to the exercise
of a
stock appreciation right will be no less than 100 %
of the fair market
value per share on the date
of grant.
Under the
terms of our equity incentive plans, the fair market
value on the grant date is defined as the average
of the high and low trading prices
of FedEx's
stock on the New York Stock Exchange on that
stock on the New York
Stock Exchange on that
Stock Exchange on that day.
The
term of an incentive
stock option may not exceed 10 years, except that with respect to any participant who owns more than 10 %
of the voting power
of all classes
of our outstanding
stock, the
term must not exceed 5 years and the exercise price must equal at least 110 %
of the fair market
value on the grant date.
In the event
of an ownership change, utilization
of the Company's pre-charge NOLs would be subject to annual limitation under Section 382, which is generally determined by multiplying the
value of the Company's
stock at the time
of the ownership change by the applicable long -
term tax - exempt rate (which is 3.50 % for December 2013).
In the event
of an ownership change, utilization
of our pre-change NOLs would be subject to annual limitation under Section 382 determined by multiplying the
value of our
stock at the time
of the ownership change by the applicable long -
term tax - exempt rate, increased in the five - year period following such ownership change by «recognized built - in gains» under certain circumstances.
The dollar
values of the long -
term compensation targets were then converted to shares
of Company common
stock using the
stock price on the date
of grant for the Performance Share awards.
Specifically, benefits subject to the HP Severance Policy include: (a) separation payments based on a multiplier
of salary plus target bonus, or cash amounts payable for the uncompleted portion
of employment agreements; (b) any gross - up payments made in connection with severance, retirement or similar payments, including any gross - up payments with respect to excess parachute payments under Section 280G
of the Code; (c) the
value of any service period credited to a Section 16 officer in excess
of the period
of service actually provided by such Section 16 officer for purposes
of any employee benefit plan; (d) the
value of benefits and perquisites that are inconsistent with HP Co.'s practices applicable to one or more groups
of HP Co. employees in addition to, or other than, the Section 16 officers («Company Practices»); and (e) the
value of any accelerated vesting
of any
stock options,
stock appreciation rights, restricted
stock or long -
term cash incentives that is inconsistent with Company Practices.
The
term of an incentive
stock option may not exceed ten years, except that with respect to any participant who owns more than 10 %
of the voting power
of all classes
of our outstanding
stock, the
term must not exceed five years and the exercise price must equal at least 110 %
of the fair market
value on the grant date.
Yet on the whole, given their positive experience both with receiving more income than they could get from the fixed - income sector in recent years and the potential for capital appreciation over the long haul, dividend
stocks and the ETFs that own them have demonstrated their long -
term value to the investors who've gravitated toward them during the low - rate environment
of the past decade.
This compares poorly to the Consumer Staples Sector, where 73 % (in
terms of market
value of stocks)
of stocks get and Attractive - or - better rating.
78 % (in
terms of market
value)
of stocks in the Financial Sector are Neutral - or - worse - rated
stocks.
«I'm amazed at how many CFOs don't truly understand the long -
term sustainability and
value creation
of stock buybacks.»
We argued that the market had experienced a multi-year process
of de-rating, as
stock prices languished while corporate cash flows and book
values had multiplied, and had become inexpensive in absolute and relative
terms.
Reuters cited «a disappointing outlook from Cisco Systems (NASDAQ: CSCO)» as one
of the factors weighing on the market this morning, but as I pointed out in my review
of Cisco's fiscal second - quarter earnings, the outlook wasn't disappointing and today's decline in the
stock looks like a buying opportunity for long -
term,
value - oriented investors.
While a decline in near -
term commodity prices reduced our estimate
of value due to lost interim cash flows, the
stock's decline has significantly exceeded what we think is the true change in the company's underlying business
value.
I think it's in the nature
of long
term shareholding
of the normal vicissitudes, in worldly outcomes, and in markets that the long -
term holder has his quoted
value of his
stocks go down by say 50 %.
Going after cheap
stocks is ok, even after losing some
of their
value, but you have to be in it for the long -
term and you need a good reason to believe that the outlook will improve eventually.