Tag Archives: Boston Consulting Group

Automobiles

US to join EU in fighting Russian auto recycling fee as trade barrier

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By Danny King

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If they’re not going to get you on the front end, they’ll get you on the back end. That’s what the European Union is accusing the Russian government of doing with automotive trade restrictions, and the US appears to agree, Reuters reports. The US is joining the EU in a World Trade Organization (WTO) claim that Russia is violating trade agreements by imposing an auto-recycling fees on cars imported into the country.

Russia doesn’t have such a fee for Russia-produced vehicles. Therefore, such a fee is no different than the import tax that the Russians were told to remove in order to become part of the WTO.

When it comes to the automotive industry, Russian trade agreements have become all the more relevant as more people buy cars in the country. By the end of the decade, Russian auto sales will increase to 4.4 million units annually, which would make it the world’s fifth-largest auto market, and will leapfrog Germany to become Europe’s largest, Automotive News reports, citing a report from Boston Consulting Group.

US to join EU in fighting Russian auto recycling fee as trade barrier originally appeared on Autoblog Green on Mon, 22 Jul 2013 07:59:00 EST. Please see our terms for use of feeds.

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Source: FULL ARTICLE at Autoblog

News, Politics, Government

A New Way to Get a Job When You Have No Inside Connections

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By Susan Adams, Forbes Staff

Hemant Mohapatra set his sights on getting a job at one of three prestigious American companies—McKinsey, Boston Consulting Group or Google. As a student at Cambridge University’s Judge Business School in the U.K., he knew a few people who worked inside the companies but didn’t feel comfortable asking them to coach him extensively on his applications. Though each firm offers career advice, on its website, he had specific questions, like how to customize his résumé for each potential job. He also wanted to run through a series of mock interviews.

From: http://www.forbes.com/sites/susanadams/2013/04/17/a-new-way-to-get-a-job-when-you-have-no-inside-connections/

Business, Finance, Occupation & Industry

The Men and Women Who Run Kingfisher

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By Tony Reading, The Motley Fool

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LONDON — Management can make all the difference to a company’s success and, thus, its share price.

The best companies are those run by talented and experienced leaders, with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.

In this series, I’m assessing the boardrooms of companies within the FTSE 100. I hope to separate the management teams that are worth following from those that are not. Today, I am looking at Kingfisher , owner of B&Q and Europe‘s largest DIY retail chain.

Here are the key directors:

Director

Position

Daniel Bernard

(non-exec) Chairman

Ian Cheshire

Chief Executive

Karen Witts

Finance Director

Kevin O’Byrne

CEO, B&Q and Koctas

Phillipe Tible

CEO, Castorama and Brico

Frenchman Daniel Bernard joined the board as deputy chairman in 2006, stepping up to become chairman in 2009. He has worked for several European retailers, and was chairman and CEO of Carrefour from 1998 to 2005.

Ian Cheshire was schooled at Boston Consulting Group, Guinness (where he was Ernest Saunders’s executive assistant), and Sears, before joining Kingfisher in 1998 as strategy director. He became CEO 10 years later in 2008, after being B&Q CEO from 2005.

Checkered history
He has thus seen Kingfisher’s checkered history first hand. The group grew to be a sprawling conglomerate in the late 20th century, before a failed bid to buy Asda led to shareholder pressure to refocus.

Mr Cheshire has increased operating margins, with emphasis on exploiting synergies between the company’s various international operations. The share price has doubled during his tenure, and though barely above what it was 10 years ago, that’s a considerable achievement given the economic background. The business is sensitive to consumer spending and housing markets in the U.K. and Europe.

A chartered accountant, Karen Witts has worked for several companies in finance roles, and was CFO of BT retail and CFO of Vodafone Middle East and Asian region before joining Kingfisher in October 2012.

Witts took up the job vacated by Kevin O’Byrne, who had been finance director since 2008. He had previously been finance director of DSG, and was poached after being passed over for the top job there.

Reshuffle
Philippe Tible has spent his career in the French retail industry, joining Kingfisher’s French subsidiary in 2003. He joined Kingfisher’s board in 2012 as part of the reshuffle involving O’Byrne and Witts, intended, in part, to broaden the executive team’s experience. Also promoted to the board was the U.K. CEO, but he unexpectedly decamped to be CEO of the Co-op last December.

An impressive line-up of six non-execs includes a former CEO of Ikea, and CFO of Cadbury.

Ian Cheshire has 3.8 million pounds’ worth of shares, but the other executive directors, albeit recently appointed, have much smaller holdings, and sold substantial option awards last year.

I analyze management teams from five different angles to help work out a verdict. Here’s my assessment:

1. Reputation. Management CVs

From: http://www.dailyfinance.com/2013/04/11/the-men-and-women-who-run-kingfisher/
Business, Finance, Occupation & Industry

Warren Buffett Doesn't Buy Junk Stocks (but Maybe You Should)

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By Adam Levine-Weinberg, The Motley Fool

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Warren Buffett became the greatest investor of his generation by following a relatively simple philosophy: buying great companies at good prices. A look at Berkshire Hathaway’s stock performance since 1990 clearly demonstrates Buffett’s success.

Berkshire Hathaway Price Chart (1990-present). Data by YCharts.

That said, it’s harder than ever to find great companies at good prices today. The proliferation of information has made it easier to spot companies that have a durable competitive advantage of some sort, which tends to drive up their stock prices. For example, while I like Amazon.com’s business, the company trades for more than 70 times forward earnings, far more than I’d be willing to pay. Furthermore, Buffett has a big advantage over ordinary investors today.  His past success opens up opportunities not available to the general public, such as access to preferred stock deals and private transactions.

Dumpster diving for stocks!
The difficulty of finding great companies at good prices can be discouraging for everyday investors. As a result, I often like to go dumpster-diving for stocks! While great companies are worth more than good companies, mediocre companies, and downright “bad” companies, every company has a value that’s usually not zero (though there are exceptions!). If you can find an adequate margin of safety, you may be able to generate strong returns from owning not-so-strong companies. Don’t believe me? Take a look at this stock chart:

BBRY, BBY, DELL, and HPQ: November 1-present, data by YCharts

The above chart tracks the performance of four companies — Best Buy , BlackBerry , Dell , and Hewlett-Packard — vs. the S&P 500 since last November. Whereas the S&P 500 has gained nearly 10%, each of these four companies is up more than 50% in less than six months!

You can rest assured that Warren Buffett would not touch any of these stocks, and not just because he does not like to invest in the tech sector. Best Buy has experienced stagnant sales and falling earnings for the past year or so, due to heavy competition from Amazon. Dell and HP have each seen their PC businesses cannibalized by Apple’s iPad and other tablets. According to a recent Dell proxy filing, a Boston Consulting Group study concluded that Dell is likely to see a $10 billion drop in PC revenue over the next four years. HP has also seen disappointing results from most of its other business lines recently, and has experienced significant leadership turnover. BlackBerry was also a victim of Apple’s rise, as it went from being the smartphone king to an also-ran in just a few short years. While shares have more than doubled since September, it is nevertheless true that, in two short years, the stock has dropped from $55 to $15.

The big idea
Out of favor “dumpster” stocks can be great investing opportunities, because Wall Street tends to turn against these companies all at once. When problems first surface, analysts are often slow to …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Dell's Turnaround Plan Is One Big Gamble

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By Adam Levine-Weinberg, The Motley Fool

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Troubled PC giant Dell has been embroiled in a months-long battle with shareholders over founder and CEO Michael Dell‘s plan to take the company private (with help from Silver Lake Partners and Microsoft ). Two of Dell’s major shareholders, Southeastern Asset Management and T. Rowe Price, protested that the proposed buyout price of $13.65 was too low. Subsequently, Blackstone Group offered to pay $14.25 per share for Dell, and activist investor Carl Icahn offered to buy 58% of the company for $15 per share.

The recent bidding war has driven the Dell stock price well beyond the original proposed deal price of $13.65. However, last week Dell filed a discouraging proxy statement, which indicated that management expects things to get significantly worse for the company before any potential turnaround. The Special Committee of independent directors that evaluated the rival proposals concluded that the certainty of $13.65 cash from Michael Dell and Silver Lake was superior for shareholders to the Blackstone and Icahn bids, which would leave part of the company trading publicly. With Dell stock still trading at a premium to the Dell/Silver Lake offer — $14.30 as of Monday’s close — it is high time for shareholders to sell and lock in gains.

PC weakness continues
Dell’s big long-term problem is the decline of the PC, which has been cannibalized by the growth of mobile computing (i.e., tablets and even smartphones). The PC replacement cycle has slowed dramatically, pressuring Dell and competitors like Hewlett-Packard . Last year, HP had to write down the value of the Compaq trade name by $1.2 billion due in large part to declining PC sales. Yet the PC business is just a small part of what HP does, representing less than 30% of revenue and less than 10% of segment earnings from operations last quarter.

By contrast, while Dell has been trying to diversify into services, software, networking, and other growth areas, PC sales still represent half of the company’s revenue, and roughly 25%-30% of earnings. As a result, Dell has a lot more to lose from the continuation of weak PC sales than HP. In last week’s proxy filing, Dell stated that uptake of Microsoft’s new Windows 8 has been poor, and enterprise upgrades to Windows 7 PCs have unexpectedly slowed as well. According to a study by Boston Consulting Group (commissioned by Dell), PC division revenue could decline by as much as $10 billion over the next four years.

What’s the solution?
Michael Dell seems to be planning to double down on investments to move the company aggressively into the enterprise hardware, software, and services markets. The investments necessary to execute this transformation will depress profitability for several years. Given the strong competition in those markets from IBM, HP, and others, success is not assured.

It’s hard to fault Michael Dell for taking drastic measures to revitalize the business he founded in his dorm room decades ago. The more moderate transformation strategy …read more
Source: FULL ARTICLE at DailyFinance

News, Politics, Government

Why Does Facebook Belong On The World's Most Innovative Companies List?

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By Haydn Shaughnessy, Contributor NEW YORK, NY – MAY 18: The Times Square news ticker displays a headline about the newly debuted Facebook stock price at the end of the trading day on May 18, 2012 (Image credit: Getty Images via @daylife) Boston Consulting Group‘s annual “most innovative companies” survey has a few surprises but […]
Source: FULL ARTICLE at Forbes Latest