“Other guys read Playboy. I read annual reports.”
— Warren Buffett
I’m not quite as fanatical as Warren, but I do enjoy digging into a company’s annual report to learn something new.
Over the next few weeks I’ll be reading the annual reports, called 10-Ks, of a pile of well-known companies, first page to the last. This week: Coca-Cola (NYSE: KO ) .
Here are five things I learned from Coke’s annual report (which you can read here).
1. Inflation protection: less than some investors assume
One of the best ways to combat inflation over time is to invest in high-quality common stocks that can raise prices without cutting into sales. One of the most oft-cited examples of this is Coca-Cola, which enjoys a thick moat and deep brand loyalty. Indeed, Coke’s annual report writes: “We believe that, over time, we are able to increase prices to counteract the majority of the inflationary effects of increasing costs.”
But in the short and medium run, inflation can do a number on profits, even to a company like Coke. Take this quote from the company’s annual report (emphasis mine):
Best Forestry Companies For 2015: Empire State Realty Trust Inc (ESRT)
Empire State Realty Trust, Inc., incorporated on July 29, 2011, is a self-administered and self-managed real estate investment trust (REIT), which owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area. The Company operates in two segments: real estate and construction contracting. As of June 30, 2013, the Company owned 12 office properties (including one long-term ground leasehold interest) encompassing approximately 7.7 million rentable square feet of office space, which were approximately 83.5% leased (or 86.2% giving effect to leases signed but not yet commenced as of that date). Seven of these properties are located in the midtown Manhattan market and encompass in the aggregate approximately 5.9 million rentable square feet of office space, including the Empire State Building. Its Manhattan office properties also contain an aggregate of 440,615 rentable square feet of retail space on their ground floor and/or lower levels. Its remaining five office properties are located in Fairfield County, Connecticut and Westchester County, New York, encompassing in the aggregate approximately 1.8 million rentable square feet.
The Company has entitled land at the Stamford Transportation Center in Stamford, Connecticut, adjacent to one of its office properties, that supports the development of an approximately 380,000 rentable square foot office building and garage, which refers to herein as Metro Tower. As of June 30, 2013, its portfolio also included four standalone retail properties located in Manhattan and two standalone retail properties located in the city center of Westport, Connecticut, encompassing 204,452 rentable square feet in the aggregate. As of June 30, 2013, its standalone retail properties were 100% leased in the aggregate. In addition, the Company has an option to acquire from affiliates of its predecessor two additional Manhattan office prop erties encompassing approximately 1.5 million rentable squar! e feet of office space and 153,209 rentable square feet of retail space at the base of the buildings.
The Empire State Building is the Company’s flagship property. The 102-story building consists of 2,701,938 rentable square feet of office space and 167,788 rentable square feet of retail space. The building also includes its observatory and broadcasting operations. The Company’s portfolio includes retail properties located in retail corridors in Manhattan and Westport, Connecticut. Tenants at 10 Union Square in Manhattan include Best Buy Mobile, Starbucks, A&P, Panera Bread, FedEx/Kinko’s, Au Bon Pain, Chipotle Mexican Grill, and GameStop. In the greater New York metropolitan area, its portfolio includes high quality suburban office properties in densely populated metropolitan communities in Fairfield County, Connecticut and Westchester County, New York. tenants of the greater New York metropolitan area flagship Metro Center (at the Transportation Center i n Stamford, Connecticut) include Thomson Reuters, Jefferies Group, Columbus Circle Investors, Torm Shipping, Olympus Partners, BP Energy, Tweedy, Browne Company and Susquehanna International.
The Company approximately has 242 million square feet of rentable space, which are contained within Midtown’s multi-tenant office buildings. Downtown Chicago and the Washington, D.C. CBD combine has a total of 230 million square feet of office space. Three-quarters 75.3% of Midtown’s office stock is classified as Class A with total square footage of 182 million square feet. The Company approximately has 43.9 million square feet of Midtown office space is counted as Class B stock, accounting for 18.2% of the total market. The remaining 6.5% of Midtown office space (15.8 million square feet) is categorized as Class C space. The Grand Central submarket is a office submarket in Midtown Manhattan with 44 million square feet and is located on the east side of Midtown Manhatta n, to the north of Murray Hill and to the south of the Park ! Avenue co! rridor.
The West Side office submarket, located to the south and west of Central Park and including the area around Columbus Circle, consists of 25.8 million square feet of office space. Westchester County contains approximately 28.9 million square feet of office space and is split into six submarkets: White Plains CBD and non-CBD, Northern, Central, Eastern and Southern. The White Plains CBD is situated in south central Westchester County, along the Cross-Westchester Expressway (Interstate 287) corridor between the Sprain Brook Parkway and the Hutchinson River Parkway. The submarket consists of approximately 6.3 million square feet of office space and is defined to include the area south of Barker Avenue, north of Quinby Avenue, east of the Bronx River Parkway and west of South Broadway/Post Road. Westchester’s Eastern office submarket consists of 6.5 million square feet of space and is located to the east of White Plains, between New Rochelle and the Connec ticut state border.
- [By Jonas Elmerraji]
We’re seeing a similar setup in shares of Empire State Realty Trust (ESRT), the $1.5 billion commercial landlord that counts Manhattan’s Empire State Building among its 7.7 million leasable square feet of office space. ESRT is a relative newcomer to the public markets, trading for the first time back in October.
But just like PEB, Empire State is forming an ascending triangle setup — in this case, with the resistance level to watch at $15.50. In fact, that $15.50 level has acted like a ceiling for shares five times now since last December; each of those times, shares have gotten swatted lower. That means that a breakout above $15.50 is a materially significant buy trigger.
When $15.50 does get taken out, I’d recommend keeping a protective stop at the 50-day moving average. That level has been a good proxy for ESRT’s support line over the course of the whole pattern.
- [By Reuters]
John Moore/Getty Images NEW YORK — Investors in the Empire State Building have filed a lawsuit accusing the real estate magnates who took it public of short-changing them $300 million by refusing to sell the iconic skyscraper at a premium price. According to a complaint filed Tuesday in a New York state court in Manhattan, Peter Malkin and his son Anthony put their own interests ahead of the building’s investors by spurning all-cash offers of as much as $2.3 billion for the building and $1.4 billion for Empire State Building Associates, which held the title and master lease. Instead, the Malkins put the landmark building and 17 other properties into Empire State Realty Trust Inc., whose Oct. 1 IPO valued the property at just $1.89 billion and ESBA at just $1.1 billion, according to the complaint. The lawsuit by plaintiff Marc Postelnek seeks class-action status on behalf of more than 2,800 investors who hold shares in ESBA, which was created in 1961 and was supervised by a Malkin company, Malkin Holdings. It claimed the Malkins acted in bad faith by aborting a “bidding war” for the building, and instead enriched themselves by hundreds of millions of dollars through an IPO. “Given their positions of control and authority over the fate of the Empire State Building, the Malkins had a duty to act in the best interests of their investors,” the plaintiffs’ lawyer, John Rizio-Hamilton, a partner at Bernstein Litowitz Berger & Grossmann, representing Postelnek, told Reuters. “By failing to properly consider offers to maximize the building’s value, the Malkins breached that duty.” The lawsuit seeks to recover profit that building investors allegedly lost because of the Malkins’ refusal to sell. Empire State Realty Trust, a real estate investment trust, is a successor to Malkin Holdings. “These claims are wholly without merit and we will respond to them in court,” a spokeswoman for the REIT said Thursday. ESBA had been created by Lawrence Wien, the father
Best Forestry Companies For 2015: Pope Resources(POPE)
Pope Resources, a Delaware Limited Partnership, engages in the management of timber resources. It operates in three segments: Fee Timber, Timberland Management & Consulting, and Real Estate. The Fee Timber segment involves in growing, harvesting, and marketing timber to domestic and the Pacific Rim markets from its 175,000 acres of tree farms. The Timberland Management & Consulting segment provides investment management, disposition, and technical forestry services to the timberland owners. The Real Estate segment engages in securing permits, entitlements, and installing infrastructure for raw land development; and selling the land to buyers, who sell it to home buyers, operators, or lessors of commercial property. This segment also engages in the rental of residential and commercial properties in Port Gamble and Kingston, Washington. Pope Resources sells its logs to lumber mills and other wood fiber processors located in western Washington and northwest Oregon. As of Dece mber 31, 2010, it owned 114,000 acres of timberland in western Washington; 61,000 acres of timberland for the funds in Washington and Oregon; and 2,800 acres of real estate held for sale or development. Pope MGP, Inc. and Pope EGP, Inc. operate as the general partners of the company. The company was founded in 1985 and is based in Poulsbo, Washington.
- [By Rich Duprey]
Timberland manager Pope Resources (NASDAQ: POPE ) announced today it would be paying its second-quarter distribution of $0.45 per unit, the same rate it paid for the last four quarters after it raised the payout from $0.35 per unit.
Best Forestry Companies For 2015: Susser Petroleum Partners LP (SUSP)
Susser Petroleum Partners LP is primarily engaged in fee-based wholesale distribution of motor fuels to Susser Holdings Corporation (SHC) and third parties. SHC operates over 540 retail convenience stores under its Stripes convenience store brand. In addition to distributing motor fuel, the Company also distributes other petroleum products, such as propane and lube oil, and it receive rental income from real estate that it lease or sublease. In January 2014, Susser Petroleum Partners LP announced the acquisition of the convenience store assets and fuel distribution contracts of Sac-N-Pac Stores, Inc. and 3W Warren Fuels, Ltd.
During the year ended December 31, 2011, the Company distributed 789.6 million gallons of motor fuel to Stripes convenience stores and 522.8 million gallons of motor fuel to other customers. It also distributes Chevron, CITGO, Conoco, Exxon, Mobil, Phillips 66, Shamrock, Shell, Texaco and Valero branded motor fuel, as well as unbranded mo tor fuel. In addition to distributing motor fuel, it also distributes other petroleum products, such as propane and lube oil.
- [By Robert Rapier]
Susser Petroleum Partners (NYSE: SUSP) debuted in September 2012, and has appreciated by 50 percent since. Susser engages in fee-based wholesale distribution of motor fuels. The partnership also distributes petroleum products like propane and lube oil, and receives rental income from real estate.
- [By Robert Rapier]
Susser Petroleum Partners (NYSE: SUSP) engages in fee-based wholesale distribution of motor fuels. The partnership also distributes petroleum products like propane and lube oil, and receives rental income from real estate.
Best Forestry Companies For 2015: Oiltanking Partners LP (OILT)
Oiltanking Partners, L.P. (OTLT) is engaged in the terminaling, storage and transportation of crude oil, refined petroleum products and liquefied petroleum gas. Through its wholly owned subsidiaries, Oiltanking Houston, L.P. (OTH) and Oiltanking Beaumont Partners, L.P. (OTB), the Company owns and operates storage and terminaling assets located along the Gulf Coast of the United States on the Houston, Texas Ship Channel and in Beaumont, Texas. Its Houston and Beaumont terminals provides deep-water access and interconnectivity to refineries, chemical and petrochemical companies, carrier and pipelines and production facilities and have international distribution capabilities. Its facilities are directly connected to 18 refineries, storage facilities and production facilities along the Gulf Coast area through pipelines and common carrier pipelines, to end markets along the Gulf Coast and to the Cushing, Oklahoma storage interchange.
T he Company operates third-party crude oil and refined petroleum products terminals on the Houston Ship Channel. Its facility has an aggregate active storage capacity of approximately 11.7 million barrels and provides integrated terminaling services to a variety of customers, including integrated oil companies, marketers, distributors and chemical companies. The principal products handled at its Houston terminal complex are crude oil, the inputs for chemical production (such as naphtha and condensate), which are referred to as chemical feedstocks, liquefied petroleum gas and clean petroleum products, such as gasoline and distillates, with crude oil accounting for approximately 64% of its active storage capacity.
The Company’s storage and distribution network is integrated with the Houston petrochemical and refining complex. The facility handles products through a number of transportation modes, primarily through pipelines interconnected to local refineries and production facilities, including Houston Refining’s refine! ry in Pasadena, Texas, PRSI’s refinery in Pasadena, Texas, ExxonMobil’s refinery in Baytown, Texas, which is a refinery in the United States. Its Houston terminal also handles products through third-party crude oil, refined petroleum products and liquified petroleum gas tankers and barges arriving at its deep-water docks. Its waterfront capabilities consists of six deep-water ship docks, allowing for the dockage of vessels with up to 130,000 deadweight tons (dwt), of cargo and vessel capacity, and two barge docks, allowing for barges with up to 20,000 dwt of cargo and barge capacity. Its deep-water ship docks can accommodate vessels with up to a 45 foot draft, including Suezmax tankers, which can navigate the Houston Ship Channel. During the year ended December 31, 2011 (during 2011), the Company generated 22% of its Houston terminal revenues from throughput fees charged to non-storage customers.
The Company’s real property at its Houston terminal consists of approximately 327 acres, including 63 acres of nearby parcels that could be connected to its Houston terminal through existing owned rights-of-way. The Company owns approximately 24 acres at the Crossroads Interchange approximately six miles from its Houston terminal.
The Company’s Beaumont terminal serves as a regional strategic and trading hub for vacuum gas oil and clean petroleum products for refineries located in the upper Gulf Coast region. Its facility has an aggregate active storage capacity of approximately 5.6 million barrels and provides integrated terminaling services to a variety of customers, including integrated oil companies, distributors, marketers and chemical and petrochemical companies. The principal products handled at its Beaumont terminal complex are refined petroleum products, which accounted for approximately 99% of its active storage capacity as of December 31, 2011.
The Company’s sto rage and distribution network is integrated with the Beaumon! t/Port Ar! thur petrochemical and refining complex, and provides its customers with the additional services of mixing, blending, heating and marine vapor recovery. Its Beaumont facility handles products through a number of transportation modes, primarily through third-party pipelines interconnected to local refineries and production facilities, through its own pipeline system to Huntsman’s chemical production facility in Port Neches, and through third-party crude and refined products tankers and barges arriving at its deep-water docks. Its waterfront capabilities consist of two deep-water ship docks, allowing for the dockage of vessels with up to 130,000 dwt of cargo and vessel capacity and drafts of up to 40 feet, and two barge docks, allowing for barges with up to 20,000 dwt of cargo and barge capacity and drafts of up to 12 feet.
The Company provides integrated terminaling, storage, pipeline and related services for third-party companies engage d in the production, distribution and marketing of crude oil, refined petroleum products and liquefied petroleum gas. The Company generates its revenues through the provision of fee-based services to its customers. During 2011, it generated approximately 75% of its revenues from fixed monthly fees for storage services, which its customers pay to reserve storage space in its tanks and to compensate the Company for receiving an agreed upon average periodic amount of product volume, or throughput, on their behalf.
- [By Richard Stavros]
The good news is that midstream MLPs are already part of the crude-by-rail story and will likely be part of the growing gas-by-rail story. Indeed, there are numerous names in the MLP space with at least some exposure to the crude-by-rail trend, including Enterprise Products Partners LP (NYSE: EPD), Kinder Morgan Energy Partners LP (NYSE: KMP), Genesis Energy LP (NYSE: GEL), and Oiltanking Partners LP (NYSE: OILT), among others. Barclays estimates that MLPs have already invested $2 billion in railroad terminals, including acquisitions.
- [By Jake L’Ecuyer]
Equities Trading DOWN
Shares of Oiltanking Partners LP (NYSE: OILT) were down 7.23 percent to $59.79 after the company priced an offering of 2.6 million common units.
- [By Aimee Duffy]
2. Oiltanking Partners (NYSE: OILT )
The Houston ship channel is the Mecca of marine transportation services for the oil industry, and Oiltanking Partners has one of the largest third-party terminals there. It’s got six deepwater docks and a storage capacity of 12.1 million barrels.
Best Forestry Companies For 2015: Hyundai Motor Co (HYMLF.PK)
HYUNDAI MOTOR COMPANY is a Korea-based automobile manufacturer. Along with its subsidiaries, the Company operates in three business divisions: vehicle division, financial division and other business division. Its vehicle division manufactures passenger cars under the brand names of Centennial, Genesis, Veloster, Azera, Sonata, i40, Elantra, Accent, i30cw, i20, ix20 and others; sport utility vehicles (SUVs) under the brand names of Veracruz, Santa Fe and Tucson, and commercial vehicles, including trucks, buses, special vehicles and bare chassis, as well as provides automobile maintenance services and related components. Its financial division mainly provides automobile financing services and credit card services. Its other business division includes construction of railways and others. Advisors’ Opinion:
- [By Quoth the Raven]
It was reported this morning that Hyundai’s (HYMLF.PK) CEO, John Krafcik, has gone on the record and said that the U.S. government shutdown could affect the U.S. automobile market negatively. He’s made a headline that’s been picked up by news organizations across the board this morning. It echoes sentiments from executives at both Ford and GM. Autonews.com reported:
Best Forestry Companies For 2015: Liquidmetal Technologies Inc (LQMT)
Liquidmetal Technologies, Inc. (Liquidmetal Technologies), incorporated in 1987, is materials technology company that develops and commercializes products made from amorphous alloys. The Company’s Liquidmetal family of alloys consists of a variety of bulk alloys and composites that utilize the advantages offered by amorphous alloy technology. The Company designs develop and sell products and components from bulk amorphous alloys to customers in various industries. The Company also partners with third-party manufacturers and licensees to develop and commercialize Liquidmetal alloy products. The Company focused to commercializes its Liquidmetal alloys on three identified product areas, such as Components for Non-Consumer Electronic Products, Sporting Goods and Leisure Products and Medical Devices. On December 1, 2011, the Company entered into a Share Purchase Agreement with LMTK Holdings, Inc. (LMTK Holdings) to sell its former Korean subsidiary and manufacturing facility, L iquidmetal Technologies Korea (LMTK). Under the Share Purchase Agreement, the Company sold all of LMTK’s shares of common stock to LMTK Holdings.
The Company designs, develops and produces components for non-consumer electronic devices utilizing its bulk Liquidmetal alloys. The product categories in the non-consumer electronics field include, but are not limited to, parts for high end printers, commercial imaging devices, aerospace components, medical devices and industrial machines. The Company is also developing a variety of applications for Liquidmetal alloys in the sporting goods and leisure products area.
The Company develops a variety of applications for Liquidmetal alloys in the sporting goods and leisure products area. In the sporting goods industry the Company focuses on products that meet its design criteria. The Company has produced prototype rings made from an amorphous Liquidmetal platinum alloy that is harder, in the leisure product s category. The Company emphasis on surgical instrument appl! ications for Liquidmetal alloys. These include, but are not limited to, specialized blades, orthopedic instruments utilized for implant surgery procedures, dental devices and general surgery devices
The Company is engaged in product development efforts relating to various medical devices that could be made from bulk Liquidmetal alloys. The properties of bulk Liquidmetal alloys provide a combination of performance that makes them a replacement to incumbent materials, such as stainless steel and titanium.
- [By James E. Brumley]
While it may be melodramatic to say my following of Liquidmetal Technologies Inc. (OTCBB:LQMT) has been something of a ‘saga’, it wouldn’t be unfair to say it’s one of those small cap stocks that’s had its fair share of twists and turns. Yours truly turned explicitly bullish on LQMT back on November 22nd, after the stock broke above a key falling resistance lines. Then, on January 14th, I made a point of saying the rally had run its course, and it was time to lock in your 47% gain on Liquidmetal Technologies and walk away… at least for a while.
- [By James E. Brumley]
Well, I hate to be the one to say I told you so, but, I told you so. Back on November 22nd I told you the gain from Liquidmetal Technologies Inc. (OTCBB:LQMT) was no ordinary gain. It was a catalyst for a much bigger bullish move. See, with that day’s advance, LQMT hopped above a nagging resistance line. The end result was a stock that was not only proverbially free to move about the cabin, but a stock that had proven it had already established some upward momentum. Sure enough, Liquidmetal Technologies shares are up 47% since then. You’re welcome.
Best Forestry Companies For 2015: Changyou.com Limited(CYOU)
Changyou.com Limited develops and operates online games in the People?s Republic of China. It involves in the development, operation, and licensing of massively multi-player online role-playing games (MMORPGs), which are interactive online games that might be played simultaneously by various game players. The company operates seven MMORPGs that include its in house developed Tian Long Ba Bu; and licensed Blade Online, Blade Hero 2, Da Hua Shui Hu, Zhong Hua Ying Xiong, Immortal Faith, and San Jie Qi Yuan. As of December 31, 2010, Changyou?s games in China had approximately 111.4 million aggregate registered accounts; 1.0 million aggregate peak concurrent users; and 2.7 million aggregate active paying accounts. The company was founded in 2003 and is based in Beijing, the People?s Republic of China. Changyou.com Limited is a subsidiary of Sohu.com Inc.
- [By Jake L’Ecuyer]
Changyou.com (NASDAQ: CYOU) shares tumbled 11.75percent to $26.02 after the company issued a weak Q1 guidance and announced the resignation of its CFO.
- [By Yiannis Mostrous]
A subsidiary of Internet portal Sohu.com, video game developer Changyou.com specializes in massively multiplayer online role-playing games (MMORPG).
- [By Kevin Chen]
To be fair, these revenues come from their stake in game company Changyou (NASDAQ: CYOU ) . Because Sohu owns a majority stake in Changyou, Sohu must consolidate all financials into its statements — even as Changyou is independently listed on stock exchanges. Whatever the case, Sohu actually created Changyou — it started as a business unit in 2003, then was spun out in 2007. In any case, Sohu should do some serious soul-searching.
- [By Seth Jayson]
Changyou.com (Nasdaq: CYOU ) is expected to report Q2 earnings on July 29. Here’s what Wall Street wants to see:
The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Changyou.com’s revenues will increase 24.3% and EPS will expand 1.5%.