Tuesday, April 10, 2007


The WSJ’s ”Heard on the Street” column discusses Warren Buffett’s railroad ride. Railroad operators have benefited in recent years from a boom in overseas demand for commodities, US hunger for foreign goods and restrained competition from their big rival, trucking. And thanks to earlier waves of consolidation that left only a handful of public US railroad co’s, their earnings and their stocks have attracted investor attention. So, the billionaire investor's bet on Burlington Northern (BNI) is the latest sign that the resurgence in railway stocks has some strength over the long haul. Mr. Buffett's Berkshire Hathaway (BRKA) has accumulated a total of 39m shares. Ken Hoexter, of Merrill Lynch, says that despite the near-term earnings risks, he remains bullish on the group. "Long term, the secular story of pricing and improved returns will drive improved share performance," says Mr. Hoexter, who has a Buy rating on Burlington' stock.

The NY Times reports that one of Canada’s largest pension funds is in early talks with other investors to form a consortium to mount a $45bn takeover bid for the parent co of Bell Canada in what would be the largest buyout in history. The Ontario Teachers’ Pension Plan, which is the largest shareholder of BCE Inc. (BCE), the telephone co’s parent, has reached out in recent weeks to Caisse de Dépôt et Placement du Québec and the Canada Pension Plan Investment Board about pursuing a takeover.

DigiTimes reports that monitor vendors are feeling the pressure from rising panel prices, with mkt watchers predicting that monitor prices may go up as early as May. Monitor vendors have admitted that rising panel prices, which have gone up $2-5 since the beginning of April, are heaping pressure on them. Mkt observers pointed out that although margins for monitors are low, its prices are so sensitive an issue that vendors are conservative about raising them. But the observers predict that if panel prices continue rising, monitor prices will go up in early May. Monitor panel prices have been going up due to decreased supply for the 17-inch segment, and strong demand for 19-inch and 19-inch widescreen segments.

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