March 07--WARREN Buffett, affectionately known as the Sage of Omaha, is arguably the world's most successful investor.
In January 2012 he splashed out pounds sterling 480m on Tesco's shares at 323p, increasing his stake to 5.08pc from 3.2pc, after the UK's number one supermarket wheeled out its first profit warning in living memory which prompted the biggest one day fall in the stock since 1988. Undeterred, Buffett piled in. He is now sitting pretty and enjoying a big return on his investment.
Despite the ongoing horsemeat scandal and the fact that Tesco had to admit recently that its frozen bolognese contained horsemeat, it closed 5.95p up at a 52 week high of 378.15p on meaty turnover of 98m.
After Credit Suisse upgraded to outperform from neutral and raised the target price to 430p from 355p, fund managers filled their trolleys with stock. Analyst Andrew Kasoulis says that following the profit warning it has taken a year for Tesco to regain its poise. It is now well positioned once again to focus on planning for long-term growth.
Tesco remains a growth company by culture. Growth will be more modest (but more sustainable) than during the heyday of the last decade. Any pick-up in the consumer environment, particularly in Europe, should feed through to higher numbers for Tesco.
Boss Philip Clarke has pledged to renew focus on the UK business and is known to be planning a big push into the online market to make life a lot more uncomfortable for big rival Amazon. It recently launched ClubcardTV, an online service showing films and TV shows. That move re-emphasises its Clubcard operation in the push to revitalise its UK business.
Mounting speculation that Vodafone could be on the verge of taking part in the biggest corporate merger in history had punters piling into the mobile phone giant. The shares buzzed up to 181.4p before closing 11.4p or 7pc better at 180p.
Voda holds a 45pc stake in US mobile firm Verizon Wireless and informed sources suggest that the two could soon climb into bed with each other in a deal which could be worth pounds sterling 170bn. Corporate finance departments in major City firms must be praying a deal materialises. Imagine the size of those fees!
Every 1p movement either way in Vodafone's share price equates to 3 points on the Footsie, so the elite index rose afresh to 6,460.96 before profit-taking left the close 4.31 points easier at 6,427.64. But there was no stopping the FTSE 250 which advanced 61.99 points to a record 13,923.27. Wall Street climbed 42.47 points to a intra-day record of 14,296.24 following better-than-expected private sector employment data for February.
Emerging markets lender International Personal Finance soared 67p to a 52-week high of 473.4p. The company, which lends to 2.4m borrowers across Eastern Europe and Mexico, lifted pre-tax profits 20pc to pounds sterling 95.1m, while the dividend rose 9pc to 7.7p. The company said it plans to expand into Bulgaria and Lithuania this year.
A revival of private equity bid talk helped baby clothes retailer Mothercare put on 18p to 289p.
Industrial transportation group James Fisher steamed 19p ahead to 907p following excellent results and acquisition news. Full-year profits rose pounds sterling 35.4m from pounds sterling 30m on an 18pc improvement in revenues to pounds sterling 363.3m. The dividend is hiked 10pc to 11.83p. The company is acquiring Aberdeen-based Divex, a global market leader in dive systems for the oil and gas and defence sectors, for pounds sterling 20m plus a possible earn out of pounds sterling 13m.
Currently working for Crossrail and Thameslink across London, engineer Costain lost 8p to 287p despite healthy annual results. Pre-tax profits improved 16pc to pounds sterling 29.5m and the dividend is 7.5pc higher at 10.75p. Panmure Gordon is a fan because of the group's ability to deliver large, complicated infrastructure projects.
Reflecting relief that the 14p a share final dividend was maintained despite dire final figures, oil equipment services company Cape jumped 26p to 259p.
Shares of Galileo Resources remained friendless at 25p, down 1p, but rumours suggest a pick-me-up could be just around the corner. The word is a preliminary economic assessment for its rare earth project in South Africa is imminent and will prove a milestone for the company. A re-rating should follow.
Earthport rose 2.88p to 23p after the innovative payments processor announced it has signed American Express, a global icon in payment services, for its Cross-Border payments service. Broker Panmure Gordon lifted its target price to 32p from 24p, saying Earthport is at a pivotal point where it has to bring in the revenues and its positioning is getting stronger as evidenced by new business wins.
IT could be time for investors to take a closer look at InterQuest, 3p up at 56.5p, says Charles Stanley Securities. The specialist IT recruitment firm has effectively been rebuilt over the last 18-24 months and this year the broker expects profits to grow from pounds sterling 1.5m to pounds sterling 2.1m, net debt to fall and the dividend yield to be 5pc. The company has a proven and heavily incentivised management team, a solid core business, attract valuation and an exit strategy.
