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Forest Labs (FRX) is among the stock picks in this weekend's Barron's. Staff writer Jay Palmer does an excellent job laying out the bull case for FRX shares in Forest Lab's Prescription for Success. An unappreciated pipeline plus a huge cash horde add up to a winning combination. He isn't the first to think so.Forest Labs has been a Lonely Value favorite for exactly these reasons. My first Forest post (See the Forest for its Cash) appeared in June of 2009. At the time, the company had $3 billion in cash and securities (zero debt) against a $7.4 billion market value. Fully 40% of Forest's market value was in cash and marketable securities. In addition, FRX was churning out over $1 billion a year in free cash flow. It still does.Complete Story »

Forest Laboratories, Inc. (FRX)
F3Q10 Earnings Call
January 19, 2010 10:00 am ETComplete Story »

Equitymaster submits: After a weak opening, strong buying activity in the index heavyweights propelled the indices to stay well above the dotted line throughout the day. Although profit booking was witnessed at higher levels, the indices managed to hold on to their gains and close well into the positive. While the BSE Sensex closed higher by around 87 points (up 0.5%), the NSE Nifty gained around 23 points (up 0.4%). Midcap and smallcap stocks also registered gains of 0.6% each. While banking and auto stocks led the pack of gainers, healthcare and metals stocks were at the receiving end. As regards global markets, Asian indices closed mixed today while European indices have also opened on a mixed note. The rupee was trading at Rs 45.66 to the dollar at the time of writing. Complete Story »

Jacob Wolinsky submits: Bruce Berkowitz was voted guru of the year on gurufocus.com. Tuesday Berkowitz has added another award. Morningstar.com announced that Bruce Berkowitz won the award for domestic equity manager of 2009. Berkowitz bested other famous value investing gurus, including Bill Nygren of Oakmark funds and Mason Hawkins and Stanley Cates of Longleaf Partners. Berkowitz’s Fairholme Fund returned 39% versus 26.5% for the S&P 500 in 2009. Morningstar notes that this feat is more impressive accounting for the fact that 17% of his fund is in cash. Morningstar also notes that in 2008, Berkowitz also outperformed the S&P, losing 30% versus 37% loss for the S&P. The article also notes that Berkowitz drastically reduced his stakes in energy stocks, and was heavily invested in health care stocks in 2009.Complete Story »

OptionMonster submits: As the stock market continues to trade at 15-month highs, Sabrient’s SectorCast-ETF model is getting even more defensive, even though we are in a historically bullish time of year. The fundamentals-based quantitative model has a GARP (growth at reasonable price) focus, and this week there are significant changes to the sector rankings. The emergence of InfoTech earlier in the month was indeed a bullish sign, but the latest rankings might be indicating that a flight to quality is imminent.Complete Story »

Chuck Carnevale submits:HistoryConventional wisdom would indicate that finding a sure thing in the stock market is an impractical dream. However, Teva Pharmaceutical Industries, Ltd. (TEVA) may be as close as you will ever get. As one of the top 20 pharmaceutical companies in the world this leader in generic and biogenerics is well positioned to prosper in today’s healthcare environment.Teva, however, is much more than just the largest generic manufacturer and distributor; they also are one of the most innovative participants in the important fields of neurology for treatments of devastating diseases, other autoimmune diseases, and oncology.Complete Story »

The Manual of Ideas submits:The recently released semi-annual report of The Fairholme Fund (FAIRX), a mutual fund managed by respected value investor Bruce Berkowitz, reveals some noteworthy portfolio changes during the fund's second fiscal quarter ended May 31st.Berkowitz significantly boosted the fund's ownership of Hertz Global Holdings (HTZ) during the period, from 30.0 million shares at the end of February to 46.4 million shares at the end of May. Hertz shares rose sharply during the period, suggesting that Berkowitz was likely adding to his position at higher prices. The shares have continued their upward climb since the end of Fairholme's fiscal Q2, rising from $6.85 per share on May 29th to $10.93 as of August 7th. The rapid ascent of Hertz shares likely reflects investors' changed perception of the company's ability to service its considerable debt load, which amounted to roughly $9 billion, net of cash, at the end of June (most of the debt is used to finance Hertz's large inventory of rental vehicles). Hertz's earnings remain depressed, but analysts estimate that profitability will recover somewhat, to $0.33 per share, in 2010.Complete Story »

Value Expectations submits: With a major week of earnings right around the corner, we thought it would be useful to our readers to provide an analysis of the companies set to report in the first half of next week. This analysis contains a breakdown of each company's default recommendation according to AFG's Buy/Sell criteria, a look at their valuation attractiveness, and a look at the direction their Economic Margin's are expected to head in the upcoming year. The three companies that look the most attractive based on these criteria are Pfizer (PFE), Advanced Micro Devices (AMD) and Boston Scientific (BSX). A company's Economic Margin (EM) is a measurement of their true earnings above or below their cost of capital. EM also corrects distortions caused by accounting policies to give a more accurate assessment of a company's real value. It is important to understand the direction a company's EMs are heading because, by knowing this, one can get a complete assessment of how profitable a company can be in the future. The EM Framework addresses profitability, competition, growth and cost of capital. When factoring in each of these variables, investors can fully assess a company's value. Complete Story »

Ryan Barnes submits:When you lose, Don’t lose the lesson - The Dalai Lama For the better part of 5 months I’ve been kicking myself over not dumping Pfizer (PFE) from the Secular Trends Portfolio the day they announced the Wyeth merger. The second I heard about the deal I honestly thought the TV announcer had made a mistake; “No no, it couldn’t be Wyeth. That would just be stupid”Complete Story »