The best part about Berkshire Hathaway CEO Warren Buffett's annual investor letters is that they always provide some kind of reality check.This year, in one sentence, he takes on one of the biggest diversion tactics of all -- one promulgated by many companies as the way they should be viewed, and then gullibly accepted by investors: EBITDA or earnings before interest, taxes, depreciation and amortization."When Wall Streeters tout EBITDA as a valuation guide, button your wallet," he wrote.Here's the windup to that comment (emphasis added by me):"I won't explain all of the adjustments - some are tiny and arcane - but serious investors should understand the disparate nature of intangible assets: Some truly deplete over time while others in no way lose value. With software, for example, amortization charges are very real expenses. ..."
Here are some post-earnings quick takes on these three Watch List companies.
The company has not denied the grievances identified by the Consumer Financial Protection Bureau.
ITT Education Thursday insisted that the Consumer Financial Protection Bureau's suit against the operator of for-profit schools "never should have been filed." According to the press release: "The complaint overwhelmingly focuses on issues that are unrelated to consumer finance, and attempts to cast a negative light on aspects of ITT Tech's activities that are extensively regulated by other government agencies. The core claims concern a mere six months of loans, but the Bureau knows that independent third parties provided those loans, and the loan programs ended years ago. Significantly, ITT Tech did not make any money, in interest or fees, from those third-party programs, which were designed to help students during the recent economic downturn. We are disappointed that the Bureau chose to sue rather than work with ITT Tech...."
I wrote a piece headlined, "Why ADT is Appalling." What's more appalling is the company's response.
Earnings disappointments come a dime-a-dozen, but ADT's report is a standout.
The questions asked by Sen. Ed Markey in letters to the regulators and Herbalife CEO Michael Johnson are compelling and, in some ways, get to the heart of questions that have been dodged.
Post-quarter update: Red flags continue to fly over gluten-free pure-play Boulder Brands, even as analysts -- in their post-quarter reports (surprise, surprise) -- glossed over what to me would appear to be obvious concerns.
It's the question that now has to be asked: Should all multi-level marketers in China be worried? Probably, or at least be a little nervous.
The FTC's press conference on weight loss and skin cream claims was pretty much a nonevent except for one thing.