Corporate Finance

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Weekend Reads: Beating Expectations — Again and Again

Weekend Reads Exceeding Expectations Again and Again

Companies have gotten so good at managing earnings (and Wall Street) these days that when reporting season rolls around, it’s hard to ascribe any value to news that a company “beat” expectations. In fact, a review of quarterly data compiled by FactSet Research Systems reveals a recurring pattern in recent years. Companies guide earnings and revenue estimates down over the course of the quarter and then clear the lowered bar when they report financial results. Markets cheer. Rinse and repeat. Read more

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The Place of Private Equity in a Diversified Investor’s Portfolio

Diversification

The recent Chapter 11 bankruptcy protection filing of Energy Future Holdings Corporation — once the subject of the world’s largest leveraged buyout, and now the biggest private equity bankruptcy since the demise of Chrysler — casts an unflattering light on the rarefied sphere of private equity investment. We take the opportunity to review recent research on the place of private equity in a diversified investor’s portfolio. Read more

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Weekend Reads for Investors: Repo Mania

Weekend Reads

It’s perhaps not surprising that US corporations have taken advantage of historically low interest rates by issuing record amounts of debt. It’s revealing, however, that companies are using the proceeds to buy back their shares with stock prices at all-time highs. According to S&P Capital IQ, US firms are repurchasing their shares at a pace not seen since 2007. Read more

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Poll: Little Support for Buffett’s Abstention from Coca-Cola Vote

Thomas Piketty’s popular new book, “Capital in the Twenty-First Century,” has struck a chord with the public in part because of a growing disenchantment with the generous compensation packages lavished on corporate executives, so it was not without irony that last week 83% of Coca-Cola’sshareholders approved a controversial equity compensation plan for approximately 6,500 employees that had been widely panned as excessive. Read more

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