Sunday, December 8, 2013

"Direct TV (Symbol DTV) is Berkshire Hathaway's 9th largest holding. That is a good enough endorsement for me to add some of this stock to my long term holdings."

Dow Jones Industrial Average  16,086.41 (UP)  Week ending 11-29-2013
Dow Jones Industrial Average  16,020.20 (Down)  Week ending 12-06-2013

Warren Buffett and Berkshire Hathaway's investment team do not make investments lightly. They make a thorough investigation of a company's financial numbers and consistent growth prospects. So when they invest $2.35 Billion dollars or purchase 7% of a company's stock and it is their 9th largest holding, you can bet that someone has done their homework first. Buffett started buying DTV at $42.00 a share and kept buying on the way up. Berkshire just recently lightened their position just slightly.

Direct TV (Symbol DTV, $66.44) is the above mentioned investment which has a one year return of 32.75% and a 3 year total return of 64.70%. We will take those kind of numbers anytime. The PE on the stock is 12.73 and the forward PE is 11.44.

The PEG ratio on the stock is 1.09 and the 12 month trailing PEG ratio is 0.4626, so there is much growth in progress. Direct TV has 12 month trailing revenues of $31.21 Billion dollars.

 DIRECT TV "Genie"
Earnings for 2013 will be $5.00 per share and for 2014 they are projected at $5.79 per share. Year over year quarterly earnings growth is 42.22%.

DTV operates at a Gross Margin% of 47.69%.  The company has a Market Cap of 34.71 Billion, but the company has an Enterprise Value of $52.52 Billion.
The company currently does not pay a dividend.

Again, whatever you do with the Dow Jones at 16,000 plus, you need to buy into these stocks in small parcels and average in.  Do not place any large positions at these levels. Portfolio managers are doing stock rotations in all different directions this month for rebalancing and tax considerations. Be patient for your opportunity to buy.

Best Wishes,


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