Wyatt Research Week in Review: May 3-9

Buyout buzz fueled a wave of speculative trading this week, with a pair of potential blockbuster acquisitions spinning the Wall Street rumor mill.
Salesforce.com (NYSE: CRM) was the first acquisition target to grab headlines, with such diverse companies as International Business Machines (NYSE: IBM), Oracle (NYSE: ORCL) and SAP SE (NYSE: SAP) rumored to be in the running to purchase the San Francisco-based cloud computing and customer relationship management company. SAP subsequently denied any interest, while representatives from Oracle and IBM were tight-lipped.
Bloomberg News then reported that Microsoft (NASDAQ: MSFT) was evaluating a Salesforce buyout bid. An ensuing Reuters report quashed that rumor, citing “two people familiar with the matter” who said that Microsoft considers Salesforce’s current valuation expensive. Spokespeople for Microsoft and Salesforce declined to comment in both instances.
On Thursday, reports surfaced that local business review company Yelp (NYSE: YELP) – another Frisco-based corporation – is exploring a sale. Analysts floated a who’s who of S&P 500 heavyweights as potential suitors: Google (NASDAQ: GOOGL), Apple (NASDAQ: AAPL), Facebook (NASDAQ: FB), Amazon.com (NASDAQ: AMZN).
Yelp shares soared 23% Thursday following the news, which is the same percentage the stock dropped on May 7 after the company reported a disappointing first-quarter net loss of 2 cents a share.
Wall Street traders in The City That Never Sleeps will surely be keeping a close eye on The City by the Bay to see if any potential deals develop.
The same goes for our team of Wyatt Research analysts, who will keep you abreast of the M&A outlook in the coming weeks.
In the meantime, here are some of my favorite articles from the week’s action:
Berkshire Hathaway Forever Stocks: 3 Holdings That Will Outlast Buffett – How will Berkshire Hathaway (NYSE: BRK-B) look 50 years from now? As Warren Buffett stated at Berkshire’s latest shareholder meeting, he thinks it will be much the same. And there’s also the chance that it will still own these three stocks.
An 8% Dividend Yield Almost Too Good to Be True – Right now, it might seem crazy to suggest investing in a coal company. But every industry has a leader, and this company offers an 8% dividend to boot.
Buy the Dip with This Forever Growth Stock – Conservative growth investors will have a hard time finding a better stock to own for the long haul than this large-cap industrial technology company.
Charging Up: Tesla Earnings Beat Expectations – Tesla’s (NASDAQ: TSLA) first-quarter earnings report revealed better-than-expected results for revenue, earnings per share, vehicle deliveries and vehicles produced. And with the recent announcement of Tesla Energy’s new home battery technology, the best might be yet to come for Elon Musk and company.
Land of the Rising Stocks: How to Play Japan’s Bull Market – On April 22, the Nikkei 225 index, Japan’s blue chip barometer, closed above 20000 for the first time since March 2000. And while Japan’s stock market has seen many false dawns over the past few decades, Wyatt Research analyst Tony Daltorio thinks this time is different.
Will the Bernanke Hire Make a Difference at Pimco? – The departure of Pimco fund manager Bill Gross in 2014 has led to massive outflows from the Pimco Total Return Fund (PTTRX). Just recently the fund lost its No. 1 market share position to the Vanguard Total Bond Market Index Fund (VBMFX). Last week Pimco announced that it hired former Federal Reserve Chairman Ben Bernanke as a senior adviser. Can Bernanke make a difference, or is it too little too late?
A Pair of Activists See Huge Upside in This Restaurant Stock – It’s hard to find a restaurant stock trading at 22 times forward earnings estimates while generating a near 25% return on invested capital. But this company – which is being touted by billionaire hedge fund managers Dan Loeb and Keith Meister – meets those criteria and could have significant room to grow.
An Unconventional Strategy for More Income and Total Return – Wyatt Research expert Steve Mauzy’s strategy for producing greater income and total return isn’t for everyone. It requires seeing value where others see despair. But for investors with patience and fortitude, it’s a strategy that can lead to long-term income and prosperity.
Is This Company the Next Berkshire Hathaway? – At this week’s Sohn Investment Conference, activist investor Bill Ackman of Pershing Square Capital Management revealed what he believes is the next Berkshire Hathaway. Get the name here.
Have a great weekend!