Month: June 2016

Categories
Kraft Heinz

Kraft Heinz Set to Close Pennsylvania Plant

(BRK.A), (BRK.B)

Kraft Heinz’s streamlining, which has been moving forward aggressively since Berkshire and 3G Capital took the reins in 2015, is continuing with plant closings that were first announced in November 2015.

The Lehigh Valley, Pennsylvania plant will close July 31, with its product lines moving to facilities in Michigan, Illinois and Canada. The plant manufactures A-1 steak sauce, Grey Poupon mustard, and Keurig coffee.

The plant is one of seven plants that will be closed. The others are in Fullerton and San Leandro, California; Federalsburg, Maryland; St. Mary’s, Ontario; Campbell, New York and Madison, Wisconsin.

The Leigh Valley plant is closing despite having received grant money in 2014 from the Department of Community and Economic Development when it was owned by Kraft.

The grant was provided to expand the facility and hire more workers, and Kraft Heinz will repay $200,000 to the State of Pennsylvania for closing the plant.

State vs. State

States across the U.S. have been a fierce battle to retain Kraft Heinz plants, and under an agreement spearheaded by U.S. Senator Charles Schumer and Governor Andrew Cuomo, $20 million in New York state funds were committed to keep open and expand Kraft Heinz’s plants in Walton, Avon and Lowville, New York.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
McLane

McLane Company Announces Fresh Produce+

(BRK.A), (BRK.B)

Berkshire Hathaway’s McLane Company, a $48 billion supply chain services leader, providing grocery and foodservice supply chain solutions for convenience stores, mass merchants, drug stores and chain restaurants throughout the United States, is rolling out the McLane Kitchen’s nationwide Fresh Produce + supply chain solution.

Fresh Produce + is a turnkey solution that provides top quality products, operational best practices, merchandising units, information on suggested retail pricing and best-in-class customer service to help operators establish their locations as destinations for fresh produce.

According to Mclane, what makes Fresh Produce + truly unique is McLane’s unmatched ability to deliver fresh produce nationwide, allowing operators in multiple regions to offer a consistent product mix of healthier options. For single c-stores, McLane’s nationwide distribution means leveraging the company’s buying power to better compete pricewise, while ensuring the high-quality fresh produce.

Because choice in pricing is a key factor in creating a solution that works for every retail customer, Fresh Produce + offers mark-up options associated with varying levels of product guarantee. Fresh Produce + is also fully compatible with McLane’s Premium Ordering Management Suite (POMS) and smart handheld technology, giving operators the ability to order fresh items just like any other SKU. Over the coming months the solution will integrate seasonal items and category management to ensure operators continue to grow their return.

According to an independent study, close to half of the nation’s population visits a convenience store each month. What’s more,48 percent of Americans say c-stores are a place to buy fresh items.

According to a 2015 NACS retailer sentiment survey, 50 percent of c-stores have expanded fresh fruit sales, while 30 percent have increased cut fruit and vegetable offerings.

“We recognized our customers wanted a consistent way to fill their consumers’ need for safe, fresh, better-for-you produce,” said Holly Veale, product director for foodservice at McLane. “McLane Kitchen’s Fresh Produce + solution makes fresh produce and cut fruit available to all our customers, regardless of size or location.”

In conjunction with the nation-wide rollout of McLane Kitchen’s Fresh Produce + solution, McLane recently announced its affiliation with The Partnership for a Healthier America (PHA), a nonpartisan nonprofit organization devoted to working with the private sector to ensure the health of the nation’s youth by solving the childhood obesity crisis within a generation. McLane is the first grocery and chain restaurant distributor to make a commitment to PHA.

“We’re honored to come on board as the first grocery and chain restaurant supply chain distributor to support PHA’s efforts,” said Tony Frankenberger, president of McLane Grocery Distribution. “It is now more important than ever for the food, retail and distribution industries to work together to help solve the childhood obesity problem, and to offer consumers fresh and healthier products to make better food choices on a daily basis.”

“Consumers are shopping more and more at convenience stores throughout the week, and their demand for healthier options — regardless of where they shop — is not slowing down,” said PHA CEO Lawrence A. Soler. “We are proud that companies like McLane are stepping in and joining the ranks to provide thousands of Americans access to nutritious foods. This is a tremendous opportunity to reach customers where they are — in convenience stores, drug stores, mass retailers and restaurants.”

“The fresh and better-for-you food category will continue to expand as consumers become more health-conscious and the c-store industry places additional emphasis on growth,” added Veale.

“Now, through Fresh Produce + and McLane’s nationwide distribution network, location will no longer hinder a retailer from offering fresh produce choices to their customers.”
Veale concluded, “McLane’s role in making fresh products available to any c-store location — no matter the size or individual buying power — will be a game changer in the industry.”

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Berkshire Hathaway Automotive

Berkshire Hathaway Automotive Finally Snags Another Dealership

(BRK.A), (BRK.B)

When Berkshire Hathaway completed its $4.1 billion acquisition of the Van Tuyl Group in April 2015, it talked about aggressively adding to its new automotive retailing empire that was rechristened the Berkshire Hathaway Automotive Group.

BHA got off to a promising start, as that same month it acquired Frank Kent Honda of Fort Worth, Texas.

“This is the beginning of a journey that will have no end,” Buffett noted upon completion of the acquisition. “Cecil and Larry have given us the ideal platform with which to build an auto dealership business that will be thriving and growing 50 and 100 years from now. The fun has just started.”

Unfortunately for Berkshire, the acquisition of also Van Tuyl set off a dramatic rise in auto dealership valuations that has rippled throughout the industry, and frustrated efforts for Berkshire to add new dealership groups at what it feels are reasonable valuations.

At the 2016 Berkshire Hathaway annual meeting, Buffett acknowledged that they “hadn’t had much luck” in acquiring more dealerships.

BHA finally made some progress this month, acquiring North Park Toyota in San Antonio, Texas. The acquisition includes a 20-year lease of North Park Toyota’s 23.7-acre property that includes an option to buy.

Soaring Valuations

The steep rise in valuations has kept Berkshire Hathaway Automotive mostly on the sidelines even as the Kerrigan Advisors’ Blue Sky Report showed that U.S. dealership buy/sell activity soared to record highs in 2015. The Report noted “activity by new entrants outpacing public company acquisitions by over four to one.”

The Blue Sky Report showed that while the competition for auto dealerships was fierce in 2015, it did not favor the public companies, which in addition to Berkshire Automotive also includes CarMax and Penske Automotive Group.

“A number of iconic multi-dealership groups came to market in 2015 and were acquired by both established consolidators and new entrants. Faced with this stiffer competition, the publics found it more difficult to compete for larger group transactions, and represented just 7% of the buy/sell market in 2015.

Meanwhile new dealership buyers, including family offices, private equity firms, and public conglomerates, acquired 29% of the franchises sold, a stunning accomplishment,” said Erin Kerrigan, Managing Director of Kerrigan Advisors. “We believe new entrants will increasingly shape dealership consolidation and meaningfully impact the future of auto retail.”

The Blue Sky Report went on to note that while the market for auto dealerships is still very active, the market may be peaking.

“In 2015, dealership valuations rose to historically high levels, new entrants made sizable acquisitions, manufacturers approved numerous multi-dealership transactions, and real estate prices returned to pre-recession levels,” continued Kerrigan. “In summary, it was a year that is hard to beat.

While the 2016 buy/sell market is expected to be as active as 2015, we anticipate the proportion of sellers completing a successful sale could decline as industry growth plateaus and dealership earnings flatten.”

Buffett Says Please Subtract a Billion

Warren Buffett noted that the $4.1 billion price he paid for Van Tuyl Group also included a billion dollars in securities, as Van Tuyl also has a large float tied to financing and its extended warranty program, which was also acquired by Berkshire.

Buffett said that people should “take a billion off the purchase price,” as the reported price has given other dealership groups an inflated sense of their market value.

Is there still a major auto dealership that’s just ripe for a Berkshire acquisition? There just might be. Read this Mazor’s Edge Special Report.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Berkshire Hathaway Energy

FERC Throws Cold Water on NV Energy’s Rate Structure

(BRK.A), (BRK.B)

Berkshire Hathaway’s NV Energy has been issued an order from the Federal Energy Regulatory Commission to redo its rates, including issuing revised rates that go back retroactively to Jan. 9, 2015.

The new rates will bring consumers refunds as FERC found that NV Energy, and Berkshire’s other utility PacifiCorp, were not allowed to sell electricity at market rates.

“…we find that the additional information supplied by the Berkshire MBR Sellers has failed to rebut the presumption of market power in the PACE, PACW, Idaho Power, and NorthWestern balancing authority areas. In the absence of reliable delivered price test (DPT) analyses rebutting the presumption of market power, we find that continuation of the Berkshire MBR Sellers’ market-based rate authority in these four balancing authority areas is not just and reasonable.”

FERC went on to order new rate plans.

“Therefore, we herein revoke the Berkshire MBR Sellers’ market-based rate authority in the PACE, PACW, Idaho Power, and NorthWestern balancing authority areas. Accordingly, the Berkshire MBR Sellers are directed to file revised market-based rate tariffs further limiting sales at market-based rates to areas outside of the PACE, PACW, Idaho Power, and NorthWestern balancing authority areas within 30 days of the date of this order.”

The order comes as Berkshire has been reaping millions in benefits from the recently formed western Energy Imbalance Market.

NV Energy entry into the real-time market in December 2015 produced significant benefits because their participation increases transfer capability between the participants. Interregional transfers enabled in EIM allows each balancing area to take advantage of lower cost resources in other areas.

According to the California Independent System Operator (ISO), total benefits realized in the 2015 fourth quarter were $12.29 million, which increases the total benefit since the November 2014 EIM launch to $45.7 million.

Besides the benefits produced by interregional transfers, savings were also realized by avoiding having to reduce renewable resources’ output in the ISO control area during times of oversupply.

The total avoided energy reduction for Q4 was 17,573 megawatt hours, which greatly outpaced the avoided reductions of 828 megawatt-hours in Q3.

Avoiding the renewables output reductions in Q4 displaced an estimated 7,521 metric tons of carbon emissions.

About the Energy Imbalance Market

The EIM improves the integration of renewable resources and increases reliability by sharing information between balancing authorities on electricity delivery conditions across the entire EIM region. The only real-time energy market in the Western U.S., advanced ISO market systems automatically balance supply and demand for electricity every fifteen minutes, dispatching the least-cost resources every five minutes.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Insurance

Global Insurance Report Forecasts Robust Growth

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Berkshire Hathaway’s bevy of insurance companies could be in for a period of strong growth (helping to push up Berkshire’s profits) if its companies fall in line with the projections that Research Markets has announced in its just released report, “Global Property and Casualty Insurance Market 2016-2020.”

The Global Property and Casualty Insurance Market is forecasting strong growth with a compound annual growth rate of 5.77% during the period 2016-2020

The report covers the present scenario and the growth prospects of the Global Property and Casualty Insurance Market for 2016-2020. To calculate market size, the report considers the net premiums earned from the property and casualty market in the Americas, Asia Pacific (APAC), and Europe, the Middle East, and Africa (EMEA).

Berkshire’s profits from insurance were down in the first quarter of 2016, and Warren Buffett cited claims from hailstorms in Texas as one of the reasons.

Insurance underwriting profits dropped to $1.132 billion in the quarter, as compared with profits of $1.355 billion in the first quarter of 2015.

Berkshire has also soured on the reinsurance business as of late, noting that an increased number of players in the market has led to pricing competition.

In addition to reigning in its own reinsurance underwriting, over the last year Berkshire has aggressively cut its stake in German reinsurer Munich Re.

While Berkshire’s short-term profits from insurance may be down, the Global Property and Casualty Insurance Market forecasts a positive outlook over the next five years.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Minority Stock Positions Stock Portfolio

Palm Springs Latest California City to Add Electric Buses

(BRK.A), (BRK.B)

SunLine Transit Agency, which serves more than 3.5 million passengers annually in the Coachella Valley, California, has expanded its growing alternative fuel vehicles fleet with the addition of its first emissions-free, all-electric buses.

BYD, the world’s largest manufacturer of electric vehicles, has provided the 40 ft. low floor transit buses with seats for 35 and room for more than 60 standing passengers to SunLine.

The transit agency, which includes Palm Springs, began testing the vehicle on service routes in January.

“I’m proud that SunLine Transit has taken this step to add our first all-electric bus to the fleet,” said Lauren Skiver, general manager of SunLine Transit Agency.

“BYD has demonstrated that its electric bus technology is reliable and can meet the needs SunLine has for service routes. Additionally, SunLine will begin to see a return on its investment with cost savings over the lifetime of the bus.”

“SunLine Transit has shown great leadership in expanding its fleet with alternative fuel options, and we are pleased to serve as their technology partner by providing their first all-electric buses,” said Macy Neshati, vice president of Coach and Bus for BYD. “Our BYD electric buses provide a multitude of benefits from reduced operational costs, including significant fuel savings, cleaner air due to no tailpipe emissions, and less noise pollution, making for a more comfortable ride for both bus operator and passenger.”

The buses are equipped with BYD-designed and built iron phosphate batteries, delivering 324 kWh of power that come with a 12 year warranty, the industry’s longest electric battery warranty available. The batteries can run for up to 155 miles of typical urban driving on the service routes with recharging requiring only four hours.

BYD’s pure electric buses and taxis are currently operating in over 200 cities in 48 countries worldwide, including the U.S., Mexico, Colombia, Brazil, the UK, Germany, Austria, Denmark, Holland, Belgium, Japan, Thailand, and China.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares, and today owns roughly 9.1% of the company.

Berkshire’s original investment of $230 million is now worth roughly $1.77 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Berkadia

Berkadia Announces $10.85 Million Sale of Indiana Multifamily Property

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has announced the recent sale of the Parkway Apartments and Townhomes, located in West Lafayette, Indiana. Senior Director David Gaines, Senior Director Alex Blagojevich and Associate Director Chris Bruzas of the Chicago office completed the $10.85 million sale, reflecting a $24,327 per-unit price. It closed on May 9.

The seller was an affiliate of FM Capital from New York. The buyer, Abbott Properties from Kansas City, Missouri, was drawn to the property’s strong value-add potential and plans to renovate both the interior and exterior and streamline operations.

“We continue to see high demand from investors across the country for similar value-add properties, where their construction and management teams can go in and efficiently operate the properties,” said Gaines.

“Abbott Properties recognized a great opportunity to upgrade its portfolio,” added Bruzas. “In this instance, the Parkway Apartments and Townhomes is their second large property in central Indiana, and they now own and manage over 1,000 units in the area.”

Built in 1965, the 446-unit property includes studio, one-, two- and three-bedroom floor plans. Community residents also have access to amenities such as a pool and fitness center.

The Parkway Apartments and Townhomes is located at 2601 Soldiers Home Road, with convenient access to Interstate 65 and U.S. Route 52. It is three miles from Purdue University and seven miles from the Tippecanoe Mall. Top employers in the area include Purdue University, Wabash National Corporation, Evonik Industries and TRW Automotive.

In the first quarter of 2016, vacancy in the Lafayette metro market was 5.1 percent. During this period, asking rents advanced 6.4 percent year-over-year to $1,263.

About Berkadia

Founded in 2009 as a 50/50 joint venture between Berkshire Hathaway and Leucadia National Corporation, Berkadia is a third-party commercial mortgage servicer, as well as an approved lender for Fannie Mae, Freddie Mac, and HUD/FHA. The company was among the top Freddie Mac and Fannie Mae multifamily lenders for 2013.

Berkadia owes its origins to GMAC Commercial Mortgage Corporation, which was acquired in 2009 by Kohlberg Kravis Roberts & Co., Five Mile Capital Partners LLC, and Goldman Sachs Capital Partners. Christened Capmark Financial, the company had $10 billion of originations in 2008 and a servicing portfolio of more than $360 billion before running into bankruptcy in October 2009.

In a deal approved by the bankruptcy court, Capmark sold its mortgage loan and servicing to the newly formed Berkadia in a deal worth $515 million.

The deal brought Berkshire into the heart of the commercial loan serving business, and the company has one of the largest commercial real estate servicing portfolios.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Minority Stock Positions Stock Portfolio

State of California Boosts Pure Electric Short-Haul Trucks

(BRK.A), (BRK.B)

The State of California is awarding $23.6 million to the South Coast Air Quality Management District (SCAQMD) for a statewide zero-emission drayage truck development and demonstration project.

Drayage refers to trucks that haul freight over short distances.

The funds, from the California Climate Investments program, will reduce key criteria pollutants, greenhouse gases (GHG), petroleum usage and toxic pollution where reductions are needed most. They are also designed to accelerate the commercialization of heavy-duty advanced, zero-emission technologies, establishing a path for implementing SCAQMD’s clean air plan currently under development.

The South Coast air district is teaming up with air districts in the Bay Area, Sacramento, San Diego and San Joaquin Valley to make the project a statewide demonstration of 43 zero-emission battery electric and plug-in hybrid drayage trucks serving major California ports. Demonstration trucks and charging infrastructure will be used in all five air districts, providing emission reduction benefits in key areas of California with drayage truck activity.

“This project will help put the very cleanest short-haul trucks to work where they are needed most, moving cargo from the state’s biggest ports to distribution centers and rail yards,” said ARB Chair Mary D. Nichols. “This is good news – and cleaner air – for all Californians, but especially those who live in neighborhoods next to these industrial facilities or along some of our state’s busiest trade corridors.”

This is the first large-scale demonstration of zero-emission Class 8 trucks that involves major manufacturers, including BYD, Kenworth, Peterbilt and the Volvo Group.

The companies receiving funds have the engineering resources, manufacturing capabilities and distribution networks to support commercialization of advanced technologies related to moving freight to and from the ports.

“BYD is proud to work with the California Air Resources Board, South Coast Air Quality Management District and our fleet partners to advance clean, battery-electric transportation solutions in communities where it is needed most,” said Stella Li, president of BYD Motors. “BYD is a worldwide leader in battery technology and as the OEM providing the most battery-electric trucks under this solicitation, I believe other fleets will take notice and recognize that battery-powered drayage trucks are reliable and available for wider deployment today. We look forward to celebrating the delivery of our first battery-electric drayage truck in the fall of this year.”

The grant award is part of a larger statewide investment in low-carbon transportation projects that are pivotal to meeting California’s ambitious goals to reduce GHG emissions, improve air quality, deploy zero-emission vehicles and reduce petroleum dependency by accelerating the development and deployment of advanced vehicle technologies.

This project is part of the California Climate Investments, which use proceeds from the state’s cap-and-trade auctions to reduce greenhouse gas emissions while providing a variety of additional benefits to California communities. The project also supports the Governor’s Executive Order (B-32-15) to ensure the state “transition to zero-emission technologies.”

Freight transport in California is a major economic engine for the state but also accounts for about half of toxic diesel particulate matter (PM 2.5), 45 percent of the emissions of nitrogen oxides (NOx) that form ozone and fine particulate matter in the atmosphere, and 6 percent of all GHG emissions in California.

The SCAQMD is the air pollution control agency for Orange County and major portions of Los Angeles, San Bernardino and Riverside counties.

ARB’s mission is to promote and protect public health, welfare, and ecological resources through effective reduction of air pollutants while recognizing and considering effects on the economy. The ARB oversees all air pollution control efforts in California to attain and maintain health based air quality standards.

BYD’s Pure Electric Buses

BYD has already carved out a major portion of the pure electric vehicle market. In 2015, the company shot to number one worldwide in EV car sales from only 7th in 2014.

It’s also dominating the pure electric bus market, and BYD’s pure electric buses and taxis are currently operating in over 200 cities in 48 countries worldwide, including the U.S., Mexico, Colombia, Brazil, the UK, Germany, Austria, Denmark, Holland, Belgium, Japan, Thailand, and China.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares, and today owns roughly 9.1% of the company.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Dairy Queen

Dairy Queen Latest to Jump Into Coffee Craze & Launches Happy Hour Campaign

(BRK.A), (BRK.B)

Add Dairy Queen to the list of restaurants pushing a coffee lineup to compete with Dunkin Donuts, Starbucks, and McDonald’s.

The company is also trying to lure customers in at a traditionally slow time of day through a new campaign that focuses on the period between lunch and dinner.

The afternoon-snack daypart is seen by Quick Service Restaurant experts as one of the major growth opportunities in the category, after competition has heated up for breakfast and late-night business.

The Dairy Queen® system is now offering iced coffee and frappés for the first time nationally in the U.S., as a part of the launch of its new campaign called “The Hardest Working Happy Hour,” which makes special prices available weekdays at participating U.S. locations from 2 to 5 p.m.

Dairy Queen is offering its fans the choice of a new Vanilla, Salted Caramel or Mocha flavored Iced Coffee; new OREO®, Caramel Chip or Midnight Mocha DQ Ultimate Frappés; and Strawberry Banana, Tripleberry®, Mango Pineapple and the new Strawberry Watermelon Orange Julius® Premium Fruit Smoothies at one of the best values in the industry.

The small flavored Iced Coffees are only $1, and the small, blended to perfection new DQ Ultimate Frappés and small Orange Julius® Premium Fruit Smoothies are just $2 weekdays from 2 to 5 p.m. at participating locations.

While the beverages are available all day, they are value priced only during Happy Hour.

“This is our biggest beverage launch ever and happy hour is a very competitive day-part across all restaurant brands. We’ve really differentiated ourselves from other QSR and beverage competitor happy hour programs by creating a stir in our space with variety, value and taste,” said Barry Westrum, executive vice president of Marketing for American Dairy Queen Corporation (ADQ).

“Our fans want something different and better and at our DQ locations they can now treat themselves to the unbelievable every day. With our Hardest Working Happy Hour, fans will find quality, portable iced coffee DQ Ultimate Frappés and smoothie beverages at a great price and offered in a uniquely DQ way. It’s an extra indulgence during the day that’s perfect as an afternoon on-the-go pick-me-up.”

In 1998, Berkshire Hathaway acquired Dairy Queen for $585 million in cash and stock. At the time there were 5,790 locations in the U.S. and internationally. There are now some 6,700 locations worldwide.

For an in depth look at Dairy Queen read a Mazor’sEdge special report on Dairy Queen.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Minority Stock Positions Stock Portfolio

Missouri Latest State to Add BYD’s Pure-Electric Buses

(BRK.A), (BRK.B)

COMO Connect, the public bus system owned by the City of Columbia, Missouri, is expanding its bus fleet by adding zero-emission, all-electric buses into service starting in June to better serve customers and reduce operational costs.

The three (3), 30-ft, low-floor, all-electric transit buses will be supplied by BYD, the world’s largest manufacturer of electric vehicles, with a battery that provides 144 miles per charge and can be recharged in only two to three hours.

The three, all-electric buses will provide significant cost savings in addition to dramatically improving local air quality by eliminating tailpipe emissions. The emissions benefits of operating one all-electric bus are so great that COMO estimates that it is roughly equivalent to removing at least 70 passenger vehicles from the road daily.

Once in service, COMO Connect’s three electric buses will be equivalent to removing 210 passenger vehicles from the road in the community daily.

“These new all-electric buses match COMO Connect’s goals and vision for creating a transportation system for the future in Columbia,” said Drew Brooks, multi-modal manager for COMO Connect.

“We leased an all-electric bus from BYD earlier as a demonstration and were very pleased with the results. The electric buses provided operational and fuel cost savings, were reliable on our service routes, and eliminated emissions thereby helping to improve our local air quality.”

“BYD’s all-electric buses provide a multitude of benefits to operator and passenger,” said Macy Neshati, vice president of Coach and Bus for BYD. “The operator enjoys having a reliable bus that saves money and the passenger enjoys having a quieter, comfortable bus that is helping the environment by eliminating harmful emissions that cause air pollution.” The buses are equipped with BYD-designed and built Iron-Phosphate batteries, delivering 197 kWh of power that come with a 12 year warranty, the industry’s longest electric battery warranty available.

BYD’s pure electric buses and taxis are currently operating in over 200 cities in 48 countries worldwide, including the U.S., Mexico, Colombia, Brazil, the UK, Germany, Austria, Denmark, Holland, Belgium, Japan, Thailand, and China.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares, and today owns roughly 9.1% of the company.

Berkshire’s original investment of $230 million is now worth roughly $1.77 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.