Tuesday, April 25, 2006

Next on Buffett's plate ?

Warren Buffett bought Russell (RML), a few days ago, scoring another hit for me. With over $50 billion ready for deployment, there must be other targets out there waiting to be picked up.

I will play the guessing game and list all the potential candidates I can think of.
  • Gap (GPS): Buffett is invested in Gap. At its current price, buying outright might be a great deal.
  • Given his interest in insurance / reinsurance, some or all of these may make for bargains now - Arthur J. Gallagher (AJG), 21st Century (TW), Aspen Insurance (AHL), Montpelier (MRH), EMC Insurance (EMCI), Seabright Insurance (SEAB), Platinum Underwriters (PTP). Aspen and Montpelier became cheap after the 2005 mega hurricane season.
  • H&R Block (HRB): Another current holding. The pullback following Spitzer's investigation has made it cheap enough to be bought outright ?
  • New York Times (NYT), Dow Jones (DJ): These look cheap now. With current holdings in Washington Post and Gannett, Buffett may decide to buy out one of these.
  • Utilities/Coal/Nuclear energy: With the repeal of PUHCA, it must be easy to build a large utility empire now. I made some suggestions in a post on the KeySpan takeover. Coal/nuclear plays are expensive, fueled by investor interest in alternative choices, but wait till they become bargains.

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