wall street

General Electric Co., New York symbol GE, plans to buy back all of the preferred shares it sold to Berkshire Hathaway Inc. (New York symbol BRK.B), the holding company controlled by billionaire investor Warren Buffett. GE sold these shares to Berkshire during the 2008-2009 financial crisis. The cash from the sale helped stabilize GE’s finance division. The company will pay $3.3 billion to buy back these shares. That’s nearly equal to the $3.5 billion, or $0.33 a share, that GE earned in the three months ended June 30, 2011. However, this purchase will save the company $300 million a year in dividend payments....

RuggedCom Inc., symbol RCM on Toronto, makes computer-networking equipment that is used in harsh environments. The company recently announced that it has teamed up with ABB Ltd. (symbol ABB on New York) to win a new contract from the Eastern Nebraska Public Power District Consortium. We cover ABB in our Wall Street Stock Forecaster newsletter. Terms of the agreement were not disclosed. Under the deal, the partners will supply communications equipment for the consortium’s smart grid project. This technology will let the consortium better monitor customer outages, and cut the time required to restore services over a 1,000-square-mile area.

Technology stocks: RuggedCom seeks to strengthen reputation for reliability

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We place a lot of importance on investment quality. We assign one of our six TSINetwork Investment Quality Ratings to every stock we recommend. We base these six ratings on a total of nine key factors. Many of the factors are widely recognized as investments quality hallmarks, such as a long-term record of earnings and a long-term record of dividends. Others are less widely followed, such as a company’s ability to profit from secular trends. Secular trends go far beyond mere business cycles. They reflect ongoing changes in the world. One key secular trend today is the fact that vast numbers of workers in emerging markets are pole-vaulting into the middle class. This opens up great opportunities for many of our recommendations in the consumer area, such as Tupperware, Kraft and many others. These companies can take the products and procedures they developed and perfected in the west, and put them to work in China, India and other emerging markets, with little additional development cost. Fertilizer companies can also profit from this secular trend. When poor people begin making more money, one of the first things they do is improve their diet. They want more and better food, and more meat in particular. This pattern will fuel growth in the fertilizer business for years if not decades to come....

McGraw-Hill Companies Inc., New York symbol MHP, rose 17% the week of September 12 after it announced that it will split into two separate, publicly traded companies. One of these new firms, McGraw-Hill Markets, will sell a variety of financial-information products. This business will include Standard & Poor’s, which provides credit ratings on bonds, and McGraw-Hill’s J.D. Power market-research firm. McGraw-Hill Markets will have annual revenue of $4 billion. International sales will account for 40% of that total. The other company, McGraw-Hill Education, will publish textbooks for schools and colleges. This business will have $2.4 billion of annual revenue....

UNITED TECHNOLOGIES CORP., $68.92, New York symbol UTX, is buying Goodrich Corp. (New York symbol GR). This North Carolina-based company makes a wide range of aircraft parts, including landing gear, wheels and brakes. It also maintains and repairs planes. United Technologies is paying $18.4 billion for Goodrich, including assuming $1.9 billion of the company’s debt. On June 30, 2011, United Technologies held cash of $5.4 billion, or $5.94 a share, so it will likely borrow the rest of the money it needs to buy Goodrich. Still, United Technologies can comfortably afford to take on more debt: its long-term debt of $9.5 billion is a low 15% of its $62.6-billion market cap. It also plans to raise $4.2 billion by selling shares....

Could I have your opinion on Thompson Creek Metals? There is a lot of enthusiasm in B.C., but the market does not seem to share the same optimism.

Campbell Soup Co., New York symbol CPB, is one of the most recognizable brands in the world. It is the world’s largest maker of canned soups. It also makes Prego canned pasta and sauces, Pepperidge Farm cookies and V8 vegetable juices. In the year ended July 31, 2011, Campbell’s earnings fell 4.6%, to $805 million from $844 million a year earlier. Earnings per share were unchanged at $2.42 on fewer shares outstanding. If you exclude one-time charges related to a restructuring plan and charges related to the U.S. health-care law, earnings per share would have risen 2.8%, to $2.54 from $2.47. On this basis, the latest earnings beat the consensus earnings estimate of $2.49 a share.

Investing in stocks: Campbell spends to put new soups and sauces on shelves

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Demand for medical devices and supplies will undoubtedly continue to grow as the population ages. Even in an uncertain economic climate, our stock market advice is that this is a positive trend for the industry, but only for the best companies making these devices. C.R. Bard Inc. (New York symbol BCR; www.crbard.com) makes medical devices in four main areas: vascular products, such as stents and catheters (28% of 2010 sales); oncology products that detect and treat various types of cancer (27%); urology products, such as drainage and incontinence devices (26%); and surgical tools (16%). Other medical products supply the remaining 3%....

MCGRAW-HILL COMPANIES INC., $45.29, New York symbol MHP, rose 17% this week after it announced that it will split into two separate, publicly traded companies.

One of these new firms, McGraw-Hill Markets, will sell a variety of financial-information products. This business will include Standard & Poor’s, which provides credit ratings on bonds, and McGraw-Hill’s J.D. Power market-research firm. McGraw-Hill Markets will have annual revenue of $4 billion. International sales will account for 40% of that total.

The other company, McGraw-Hill Education, will publish textbooks for schools and colleges. This business will have $2.4 billion of annual revenue.

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SASOL LTD. (ADR), $46.17, symbol SSL on New York, has developed a technology to convert coal and natural gas into motor fuels.

The company is now the world’s largest producer of fuel from coal at its facility at Secunda, South Africa. Sasol also produces synthetic fuels from natural gas at plants in Qatar and Nigeria. In addition, the company has substantial chemical-production interests, and produces oil and gas in Africa. Sasol is also South Africa’s third-largest coal producer.

In the fiscal year ended June 30, 2011, Sasol’s revenue rose 16.1%, to $19.5 billion from $16.8 billion a year earlier (all figures in U.S. dollars). Earnings per ADR rose 27.4%, to $4.65 from $3.65. Higher oil prices were the main reason for these gains.

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