As his investments in Coca-Cola and American Express attest, Buffett is a big fan of publicly traded US brands. Both Harley-Davidson
and Mattel fit the bill nicely. "What he tends to stress is a long product life cycle and how enduring the brand is,'' David
Braverman, a vice president at Standard & Poor's Portfolio Advisors in New York, told Bloomberg in May. "By that test, Harley-Davidson
and Mattel make the cut.'' Braverman publishes a twice yearly "opportunities report" on companies he thinks Buffett will buy
next. Both Harley-Davidson and Mattel are high up on his most recent list. Buffett has already purchased one brand name US
company, sports-apparel maker Russell Athletic, for $600 million in cash.
In the annual report, Buffett says companies must have at least $75 million in pretax profit, consistent earnings, "good''
returns on equity, and "little or no debt'' to be considered. Valuations should be between $5 and $20 billion and company
stocks must have a price-to-earnings ratio of 15 at a minimum. Companies on the Berkshire "In" list also must demonstrate
steady earnings growth of 10% annually.
I see Berkshire continuing to hone in on value companies that possess solid global market prospects and that otherwise fit
Buffett's traditional criteria.
Celebrity author and business/finance commentator for CNN and Fox News,
Brian O'Connell has written for The Wall Street Journal and Newsweek, 79 Radcliffe Drive, Doylestown, PA 18901, 267.880.3144, fax 267.880.1939, firstname.lastname@example.org