Posted by: Howard Silverblatt on January 15
The day I started at Standard & Poor’s in May 1977 the S&P; 500 was at 100 (99.77), as was another stock – Berkshire Hathaway, which had a $98 bid and $102 ask. The S&P; closed 1977 at 95.10, Berkshire closed at $138, and as of now the index is at 1133 and Berkshire is at $97,785 – who woulda tunk it. The reason for the history is that Berkshire has a baby stock, BRK.B ($3,253), which represents 1/30th of the regular stock (BRK.A), and that baby is doing a 50-for-1 stock split effective Thursday January 21 (new shares being issued; trading goes from lots of 10 to 100). While investors always buy issues based on the company, one of the reasons the baby was originally created (May,’96, $1100) was to give investors an opportunity to buy Berkshire at a more affordable price (of course, if the company hadn’t done it another entity would have purchased their full shares and issued the baby). After the split the adjusted baby price would be $65.06, a much more affordable level (average U.S. ASE, NYSE, NASD common is $37.78; $65.06 would be in the top 4%) for those who wish to invest in it. Note that if you buy BRK you are also buying sizable amounts of AXP, KO, COP, JNJ, KFT, PG and WFC.
Based on no evidence, no history, and absolutely no facts, I venture to say that at least some will want to own a piece of the legendary company run by the Oracle of Omaha, and that some may just want to get in on the short-term action of holding the issue during that period. Either way, it will be a show worth watching, and an indirect tribute to the man who refuses to pay a dividend and defines the term plowback.
P.S. Back when I started at S&P; I could have purchased a full share of Berkshire with one weeks pay, net – I don’t think I have to worry about Ken Feinberg calling me any time soon
Posted by: Howard Silverblatt on January 11
see file for additional details Download file
S&P; 500 up first 5 days of 2010 – 1 of only 4 times from 1928
Up first 5 trading days: 01/08/2010, 01/09/2006, 01/08/1987, 01/09/1967
Down first 5 trading days: 01/08/1991, 01/09/1978 (record is 7, 1/11/1978)
Going for the Silver - Only 6 up in a row was 1/9/1987, with 1/12/1987 being the record up holder at 7
Posted by: Howard Silverblatt on January 07
Data in the file (release, stats, issues) is for the full U.S. common market, S&P; 500 and S&P; 1500 data is after that
Download file
Data for the full U.S. common market:
Worst year on record for dividends (from 1955)
Fewest increases: 1,191 increases is a drop of 36.4% from the 1,874 of 2008, and a 52.6% decline from the 2,513 of 2007
Most decreases: 804 decreases is a 631% gain over the 110 decreases of 2007
Domestic dividend cuts cost investors $58 billion in 2009, which will reduce future payments for year
It will take to 2012-2013 to just get back to 2007-2008
Data supports our belief that we have turned the corner on dividends
Q4 shows stabilization of increases, fewer decreases
Expect slow recovery, as companies make sure that their products and their business lines are recovering
Estimate 2010 domestic common dividend payments to be up 5%, with the second half better than the first
If however the economy slows, more government stimulus is needed (different than supports for housing or accelerated depreciation legislation), or unemployment tests the 10.8% Dec,’82 high, dividends will falter, with another round of dividend cuts. But under that scenario, dividends might be the least of our problems.
Posted by: Howard Silverblatt on December 31
The S&P; 500 posted its first negative total return decade in history. Of course, if you were in energy you didn’t notice it, and you should pick up the tab for tonight’s celebration. You can peruse our preliminary stats--best, worst, issues, sectors, decades, etc.--here.
Posted by: Howard Silverblatt on December 16
Analyst Note: Buybacks rebound 44%; Financial dilution increase 25%
S&P; 500 buybacks rebounded 44% ($34.85B) from their record Q2 low ($24.20B; data series starts in Q1,’98)
Information Technology increases 121.5% ($10.54B from $4.76B), but remains 52.1% below Q3,’08 ($21.97B); sector accounts for largest share (30.23%)
Consumer Staples picks up 66.9% ($6.70B from $4.01B; down 45.02% from $12.18B Q3,’08); increasing dividends (best, most consistent sector this year), only sector to have a positive total return from the Oct,’07 high
Energy declines 15.4% ($4.52B from $5.34B); ex-XOM ($4.23B for the quarter) the sector expenditure was minor
195 issues did buybacks in Q3, up 15.4% from the 169 in Q2,’09, and on par with the 193 in Q3,’08
For the second quarter in a row, none of the issues made the top 20 historical list for largest stock buybacks
As the market continued to recover in the third quarter, companies scaled up their buybacks from their anemic levels, but still maintained low levels as cash-conscious corporate strategists maintained a close watch, and grip, on expenditures.
There has been a pick-up in new buyback programs over the last two months. These are authorizations from the Board to management, and are not actual buys. Some of the authorizations are replacing expiring programs or ones that have reached their limits, so investors need to monitor which ones represent a corporate commitment to share repurchasing.
Most companies still appear to be matching their buybacks with their option expiration in order to limit EPS dilution.
Diluted shares used for EPS calculations in the Financial sector increased 25.2% for the period, causing the index to increase 4.5% (ex-Financial S&P; 500 count that was flat); and that is before the BAC offering, WFC or C. It’s Déjà vu all over again, but this time in reverse. Two years ago I was reminding analysts to adjust their EPS estimates upwards as share counts decreased, now they need to decrease them to reflect the shareholder dilution.
I expect buybacks to increase in the Q4,’09 period in the 10% range; 2010 is dependant on the expiring option schedule (I need to wait for the 10Ks for the details) as well as the recovering economy. As a placeholder, I am using a 25.8% increase in 2010 buyback expenditures, putting it in the $161B area, or 22.8% under the $209B 2010 dividend estimate.
Capital Expenditures were flat for the Q3 over Q2, but down 25.17% for the Q3,’09 over Q3,’08; adding in an estimated Q4 +9.2% gain (over Q3), the full year looks like a 21.9% decline with the initial estimated 2010 rebounding close to 2008 level. An accelerated depreciation schedule from Congress would help, but that has not been incorporated in the initial 2010 estimate.
Cash for the S&P; Industrials (Old) easily set a new record, up 8.6% for the quarter, and up 29% from Q3,’08. Information Technology has 16% of its market value in cash, and Health Care has 17%. Q3 may be the short-term peak as consummated M&A; deals start to have an impact, resulting in an estimated Q4 decline of 5%-7%. 2010 depends on how good management feels about their corporate future.
Over the past 20 quarters, since the buyback boom began in Q4 2004 (through Q3 2009):
Operating earnings: $3.17 Trillion
As Reported earnings: $2.54 Trillion
Capital Expenditures: $2.24 Trillion
Buybacks: $1.87 Trillion
Dividends: $1.12 Trillion
