Recap of Saturday, Oct. 5:Berkshire Hathaway; Pacific Gas & Electric

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.