For Immediate Release
Chicago, IL – February 16, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Berkshire Hathaway B (BRK.B), Burlington Northern Santa Fe Corp. (BNI), Berkshire Hathaway A (BRK.A), Ford Motor Co. (F) and Toyota Motor Corp. (TM).
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Here are highlights from Friday’s Analyst Blog:
Berkshire B Joining S&P 500
Today is Berkshire Hathaway B (BRK.B) final trading session before the company’s inclusion in the Standard & Poor’s 500 Index. After the close of trading today, Berkshire’s Class B shares will join the index. The stock price may witness a significant increase later in the day as a result of buying by index funds tracking the S&P 500.
Yesterday, Berkshire Hathaway shares had moved up significantly. Late in January, Standard and Poor’s (S&P) announced that it will be adding Berkshire Hathaway replacing Burlington Northern Santa Fe Corp. (BNI) in its S&P 500 index. This move by S&P comes after Berkshire last week announced a 50-for-1 split of its Class B shares in connection with the conglomerate’s takeover of Burlington Northern.
For Berkshire, the acquisition of Burlington Northern, in which it had already owned 22.6%, will be its biggest to date. With this acquisition, Berkshire is adding a railroad transportation business to its already wide scope of manufacturing, retail, insurance and utility businesses. Valued at $34 billion, the acquisition is scheduled to officially close today.
Warren Buffett, the CEO of Berkshire Hathaway, has until now never considered splitting Berkshire stock. This reflects management’s desire to attract long-term investors as opposed to short-term speculators.
However, this share-split action is intended to compensate the small shareholders of Burlington Northern. Since Berkshire Hathaway A (BRK.A) shares are too high priced, it would be difficult to use these to compensate the low-value shareholders in the acquired company. However, the split of the shares into the high-priced Class A and the lower-priced Class B will provide appropriate currencies for compensating both categories.
Ford Passing Toyota in U.S. Market
According to a report by auto research website Edmunds.com, Ford Motor Co. (F) has become the second-biggest automaker in the U.S. behind General Motors. With this, Ford has overtaken Toyota Motor Corp. (TM) in the wake of Toyota’s damaging parade of recalls.
According to the website, Toyota is expected to lose more than 1 percentage point of the U.S. market share to hit 16.45% in 2010 due to its global recall of 8.5 million vehicles related to their problem accelerator gas pedals and braking systems. Meanwhile, Ford is expected to achieve 16.57% of the market in the year following General Motors with 18.12% of the market.
Toyota’s recent series of recalls have been highly focused and criticized, eroding the image of the automaker. Its latest recall included highly popular vehicles such as the 2010 Prius hybrid. News has recently leaked that the U.S. regulators are also reviewing dozens of complaints about potential steering problems in new Toyota Corolla vehicles.
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