Our panelists give you the scoop on all the inside business information before you hear it anywhere else in The Informer segment:
David Asman: Chana let's talk about Dell.
Chana Schoenberger, staff writer: Dell (DELL) is about to come out with their earnings report for the quarter and they thought that they would have $8.9 billion. Turns out they're really going to have $9.1 billion in revenue. That means they came up with an extra $200 million in sales. They're selling a lot of PC's. They have 25% of that market. I'd be scared if I was the competition.
David Asman: Victoria, you're out West. What do the folks in Silicon Valley think about Dell?
Victoria Murphy, senior reporter: Dell is a great company but sometimes you shouldn't buy great companies. I think a lot of the institutional investors are buying it but I think some of the small investors will get hurt.
David Asman: Okay, Bruce the dock strike out West. Who does this effect positively and negatively?
Bruce Upbin, senior reporter: Everybody's worried about auto parts and the automakers. But retailers have also been thrown into the worry mix. You should realize though that a lot of the retailers source domestically. Companies like Tiffany & Co. (TIF) and Zale Corp. (ZLC) won't be effected because they get all their materials domestically. Whereas companies like Abercrombie & Fitch (ANF), Ann Taylor (ANN) and The Gap (GPS) bring a lot of their materials from Asia.
David Asman: Okay Pete. Let's here from you.
Pete Newcomb: There's one water utility perhaps worth looking at and that is Philly Suburban (PSC). Stock was hammered earlier this year because of a big stake Vivendi owned. They unloaded the shares last week. The stock is expected to climb 20%.
Bruce Upbin: When am I supposed to get back into Vivendi shares?
Pete Newcomb: When they give the company to Barry Diller and let him run it.
David Asman: Okay, let's go to Victoria back with VeriSign. Victoria, good or bad?
Victoria Murphy: I say bad. Right now VeriSign (VRSN) could look like a bargain, trading at around $5. It's cash cow has been domain registrations, but this is a cluttered market. It's a commodity business and one of the most popular sites on the map, MSN, has just said they're going with a different domain registrar service. That's a big deal.
Bruce Upbin: Hasn't VeriSign moved enough after this registrar business to make it not a big concern anymore?
Victoria Murphy: If you look closely, their expecting growth from some acquisitions and I think they're going to face a lot of problems with integration.
Makers & Breakers
Berkshire Hathaway (BRKb)
Peter Doyle, Kinetics Funds: MAKER
Berkshire Hathaway B Shares has $45 billion in cash and $100 million in cash flow. That's over $5.2 billion a year in cash flow. That's financial strength that can't be matched.
David Asman: How much is one share of this stock?
Peter Doyle: $2400
Jim Michaels, editorial vice president: MAKER
I think this stock is one of the solidest investments someone could make. My only concern is don't think you're going to get rich off of it.
David Asman: Mike, what happens to this stock if Warren Buffet leaves?
Mike Ozanian, senior editor: MAKER
It falls 20% and then you go in and you buy a lot more. They own a ton of businesses and they're going to be generating a lot of cash like Peter says.
Pacific Gas & Electric
Peter Doyle, Kinetics Funds: MAKER
Pacific Gas & Electric is in bankruptcy right now but it's in technical bankruptcy. Fundamentally, there's nothing wrong with this company. It actually has earnings capability of $2.50. Once it comes out of bankruptcy, I expect it to trade in line with other utility companies.
Mike Ozanian, senior editor: BREAKER
I think this company could remain in a technical bankruptcy for another year. I don't want to be sitting on this investment for that long. I'd rather use the cash for something else.
Jim Michaels, editorial vice president: BREAKER
I think in the energy field, there's a lot of bargains out there. I'd rather buy the bonds because they have just as much of an upside to them.