Warren Buffett is on the move again by purchasing $250 million worth of debt from Tiffany’s. Half of the debt will mature in 2017, while the rest will mature in 2019.
Tiffany said the proceeds of the Notes will be used to refinance existing indebtedness and for general corporate purposes. Unlike Berkshire’s investments in General Electric and Goldman Sachs, these notes do not have warrants attached to them.
This is another one of the legendary Wizard of Omaha investments in high profile companies. His list of fixed income or preferred stock investments range from Goldman Sachs, General Electric, USG, Swiss Re and Harley Davidson. In his article "Buying American", Buying American, Buffett expressed his bullishness on the future of US economy and stock market. Once again however, it’s always good to read between the lines, as Buffett’s Berkshire Hathaway doesn’t seem to have purchased any common stock in the above-mentioned names. His holding company has rather gained preferential terms with the companies that received “Berkshire Hathaway Troubled Assets Relief Program”, as his name carries a very good premium. After the closing bell, Berkshire will file its portfolio "snapshot" taken at the end of the quarter, on December 31.
I would not be investing in Tiffany’s based off Buffett’s fixed income play there; the company does appear to have a good presence in the luxury goods market. The current crisis hasn’t missed this jewelry retailer, which warned last month that its same-store sales for the holiday season fell 24 percent as sales slowed in its domestic stores.
It would be interesting to note if TIF would keep its dividend payment. Other similar Berkshire investments such as Harley Davidson cut their dividend payments just days after announcing Buffett’s investment in their fixed income notes. General electric on the other hand has not announced any cuts, although many investors believe that the dividend is on the chopping block.
Full Disclosure: None
Relevant Articles:
- Warren Buffet’s Investment in Harley-Davidson, don't get too excited about...
- Analysis of General Electric
- Warren Buffett – The Ultimate Dividend Investor
- Berkshire Hathaway Portfolio Changes for the quarter
Popular Posts
-
Companies that grow dividends tend to have better financial health and produce sustained earnings and revenue growth. Dividends help identif...
-
Dividend Growth Investing is a strategy that focuses on companies that consistently raise dividends out of their rising stream of earnings....
-
Johnson & Johnson (JNJ), together with its subsidiaries, is engaged in the research and development, manufacture, and sale of various pr...
-
Welcome to another edition of my dividend increase reports. Every week, I look at the list of dividend increases as part of my portfolio mon...
-
I reviewed three companies which raised dividends last week. Each of these companies has managed to boost dividends annually for at least te...
-
As part of my investment review process, I monitor the list of dividend increases every week. This exercise allows me to see any recent divi...
-
MSC Industrial Direct Co. (MSM) distributes metalworking and maintenance, repair, and operations (MRO) products in the United States, Canada...
-
Last year, I launched my premium newsletter titled Dividend Growth Investor Newsletter . In the newsletter, I build a portfolio of dividend ...
-
There is so much mental energy spent by investors, media and gurus spent on “guessing” the market top , market bottom , and whether we are i...
-
Imagine that you have two companies that are selling for the same valuation, which are also in the same industry and have similar current yi...
