Monthly Archives: June 2018

Dairy Queen Has Big Plans for South Korea

(BRK.A), (BRK.B)

A Blizzard has come to South Korea and it will only get bigger.

Dairy Queen, which already has over 600 locations in China, is now looking for a major expansion in South Korea as its next major international market.

Dairy Queen opened its first South Korea location in Seoul’s theater neighborhood of Daehangnoat at the end of 2017 and now has three locations.

In many countries outside the U.S., the quick service chain has frozen treats only locations, but South Korea is going for the full Grill & Chill experience.

Over the next five years, Dairy Queen is planning to open 50 locations, including in Hongdae, Gangnam and Itaewon.

“We need to get to a critical mass in order to support our local vendors,” Dairy Queen CEO Troy Bader notes.

For more information on Dairy Queen’s world-wide plans, read a Mazor’sEdge special report on Dairy Queen.

© 2018 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.

Mouser Electronics Adds Suppliers

(BRK.A), (BRK.B)

Berkshire Hathaway’s Mouser Electronics has added more than 25 new suppliers year-to-date to its already vast line card of over 700 suppliers. With an already extensive portfolio of products and suppliers across the board, the additional suppliers bolster the product choices for Mouser’s unique design engineer customer base and component buyers/procurement agents.

The suppliers added so far in 2018 represent the major electronic product categories including semiconductors, embedded modules, optoelectronics, passives, interconnects and wire/cable assemblies, electromechanical, power, test and measurement, and tools.

In 2017, Mouser added over 30 new suppliers in the embedded space alone. Over one third of these make some sort of IoT prototype board, allowing customers to quickly begin working with IoT components such as sensors, wireless communication and low power processing.

“Mouser is uniquely focused on offering our customers the industry’s widest selection of the newest products and technologies from a broad range of the leading electronic component manufacturers,” said Jeff Newell, Mouser Electronics’ Senior Vice President of Products. “Adding this significant number of new suppliers reinforces Mouser’s reputation as a one-stop shop for all the board-level components and associated development tools necessary for total project design, as well as delivering a faster time-to-market for engineers and buyers.”

The additions span across all product categories, with special emphasis on the embedded sector as the global authorized distributor strengthens its focus on the Internet of Things (IoT). Among the new embedded additions are Altitude Technology, Doodle Labs, Espressif Systems, Gumstix, NewAE Technology, and Sierra Monitor, as well as power, connector and semiconductor suppliers Advanced Energy and Tronics.

© 2018 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.

Texas Still Goes Its Own Way on Dairy Queen’s Marketing

(BRK.A), (BRK.B)

Dairy Queen is using the promise of a free Blizzard dessert to promote its Dairy Queen app. After downloading, mobile phone users get a coupon for a free small Blizzard. The coupon is good across the U.S., except in Texas.

Why not in Texas?

Because Texas, which has more DQs than any other state, has its own marketing association, the Texas Dairy Queen Operators’ Council.

Drive through Texas and you will see completely different DQ slogans, such as “Eat like a Texan.”

You will also see a different menu than the rest of the country.

Burgers called the Hungr-Buster and Beltbuster, and food such as the Texas T-Brand Tacos, Nachos Deluxe and the Beef Taco Salad, are Texas-only menu items. Yes, Dairy Queen’s famous cones, Blizzards, and ice cream cakes are all on the menu.

The different marketing campaign is holdover from pre-1998 before Berkshire Hathaway owned the quick service chain.

Texas operators held a lot of sway, and still do, and in the days before Berkshire, Dairy Queen signed all kinds of deals that it still has to live with. Some of those deals were drawn up on a napkin and were barely more than a handshake. That’s why you won’t find DQ Bakes! Artisan-style Sandwiches on the menu. When the company rolled out DQ Bakes! as its first year-round food campaign in 2015, Texas said no thanks.

I guess baked sandwiches sounded a bit too frou-frou for Texas, but they are missing out on such delights as the company’s Kansas City BBQ Pulled Pork sandwich and the Turkey BLT.

As for apps, Texas has its own DQ Texas app, which offers free treats and other rewards after five visits to a store where you spend $5 or more.

Just don’t look for a free Blizzard for downloading it.

For more information on Dairy Queen’s world-wide plans, read a Mazor’sEdge special report on Dairy Queen.

© 2018 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.

UTLX Expanding in Kansas

(BRK.A), (BRK.B)

Berkshire Hathaway’s tank car manufacturer and servicer UTLX, which it owns through its Marmon Group conglomerate, is expanding its facility in El Dorado, Kansas.

The goal is to add additional repair capability.

The expansion will add 70 employees.

The Durango facility dates back to the early 1960s and is located on 40 acres adjoining BNSF Railway.

The facility’s additions will include exterior blast and paint operations, a new welding and valve repair equipment operation, and improvements to buildings, utilities and track.

The facility currently handles repairs to tank cars used by ethanol firms and hopper cars that transport grain and food products.

© 2018 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.

Kraft Heinz Covets Campbell

(BRK.A), (BRK.B)

Kraft Heinz is looking to acquire Campbell according to a report in the New York Post.

According to the Post, Kraft Heinz assumes that the soup company’s strategic review will lead to a sale, especially after its stock has tumbled 21% in the past six months, and it wants to be first in line.

In addition to its familiar soups, Campbell owns a host of top brands, including Pepperidge Farm breads, cookies and Goldfish crackers; Royal Dansk and Kjeldsens cookies; V8 beverages; Bolthouse Farms beverages, carrots and dressings; Plum Organics baby food; Swanson broths; Prego pasta sauces; Garden Fresh Gourmet fresh refrigerated salsas, dips and hummus, and Pace sauces.

Campbell has been seeking to spur its own growth through acquisition. In March, Campbell created a new snack division after its $4.87 billion cash acquisition of snack-maker Snyder-Lance. The deal was financed with $5.3 billion of bonds.

The company is projecting $10 billion in annual revenue from its snack brands, however the acquisition price was considered steep to say the least.

Ask any analyst about potential Berkshire Hathaway acquisitions and Campbell usually finds its way on the list.

Kraft Heinz was rebuffed in its megadeal for Unilever in February 2017, so smaller deals look to be the way forward for now.

With 3G Capital’s Bernardo Hees at the helm, Kraft Heinz has been in relentless cost-cutting mode since 2015, and Campbell has been in the midst of its own $500 million effort, so it’s not clear how much more savings Kraft Heinz can wring out of it.

In any case, Kraft Heinz, which is in third place worldwide among global food conglomerates, is clearly looking to move up the chart. With Berkshire’s money behind it, there’s little doubt they will.

© 2018 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.

GEICO to Add 500 Employees in Kansas at New Office

(BRK.A), (BRK.B)

GEICO announced at the ribbon-cutting event that opened its newest office in Lenexa, Kansas that it will add 500 associates during the next five years.

Joining GEICO Chairman Tony Nicely in making the announcement were Kansas Governor Jeff Colyer, M.D., Warren Buffett, chairman of Berkshire Hathaway, GEICO’s parent company, and U.S., state, county and local officials.

“Kansas’ business-friendly climate continues to attract innovative, pioneering companies like GEICO,” said Gov. Colyer. “We appreciate GEICO for recognizing Kansas as a state where financial services firms can be very successful. The 500 new jobs created by GEICO’s investment will be a tremendous boost for the Kansas economy, and we are looking forward to the future growth of this partnership.”

“We are very pleased that we’ll have this chance to become a part of the enterprising and highly thriving area in Lenexa and Kansas City,” said Tony Nicely. “When we began looking for a new office, everything we learned about the community made us eager to open a new operation here. We expect to have it up and running close to Labor Day.”

GEICO president Bill Roberts noted that GEICO will begin recruiting soon for sales and service positions in its

GEICO Insurance Agency (GIA) operations in Lenexa. Later the company will be hiring claims professionals.

© 2018 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.

BNSF Tops Among Class 1 Railroads

(BRK.A), (BRK.B)

With its carloads up a strong 10.2 percent year-over-year, BNSF Railway is continuing to power towards an outstandingly profitable year.

The strong gains are the highest of all Class 1 railroads.

Of particular note are higher grain shipments, as well as significant increases in metallic ores and sand/gravel.

The grain shipments mean a record number of trains running through Southwest Washington state. The new record surpasses the previous record set pre-Great Recession in 2006.

Just another sign that this is shaping up to be a very good year for BNSF.

© 2018 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.

HomeServices of America Acquires Berkshire Hathaway HomeServices Ambassador Real Estate

(BRK.A), (BRK.B)

Berkshire Hathaway’s HomeServices of America has acquired Berkshire Hathaway HomeServices Ambassador Real Estate as well as an ownership interest in Ambassador Title Services. Financial terms of the transaction were not disclosed.

Headquartered in Omaha, Nebraska, Ambassador Real Estate serves the Omaha, Lincoln, Council Bluffs, Fremont, and Dundee communities with 630 sales associates operating in five sales offices. In 2017, Ambassador closed more than $2.1 billion in sales volume.

Led by its president Vince Leisey, Ambassador Real Estate has experienced year-over-year market-share growth and is widely recognized for its progressive and collaborative culture. In 2017, the company was ranked in Entrepreneur Magazine and CultureIQ’s Top Company Cultures list as the 12th best company culture in the United States in the large-company category.

Leisey is among the real estate industry’s most recognized and charismatic leaders and is known for his inspirational leadership style and approach to driving employee and agent engagement and productivity through one-on-one coaching, teamwork, and communication. Along with his existing executive team and sales managers, he will continue to lead Ambassador Real Estate’s strategic planning and growth initiatives as well as manage the company’s day-to-day operations.

“I am thrilled to join HomeServices’ family of companies. When you combine the exceptional culture that is the core of Ambassador’s productivity and success with HomeServices’ commitment to delivering exceptional service to its buyers and sellers and its unsurpassed growth opportunities, there is no limit to what we can accomplish,” said Leisey.

“Vince brings strategic vision, an innovative spirit and proven leadership qualities and, together with his team of sales managers and agents, has built an extraordinary organization,” said Ron Peltier, HomeServices’ chairman and CEO.

“Developing strategies that drive innovation and productivity across HomeServices’ family of companies is key to our mission of delivering value to our agents and consumers,” added Peltier. “We look forward to working with Vince and his team and are very proud to welcome them to HomeServices.”

The acquisition further expands HomeServices’ presence in the Omaha and Lincoln, Nebraska markets, which include Omaha-based CBSHOME and Lincoln-based Woods Bros. Realty and HOME Real Estate. They will continue to operate as independently-branded companies in their respective markets.

With this transaction, HomeServices has nearly 43,000 real estate professionals operating in nearly 900 offices across 30 states. In 2017, the company’s associates facilitated over $137 billion in residential real estate sales and nearly 360,000 transactions (including the 2017 and 2018-to-date acquisitions pro-forma), further strengthening HomeServices’ position of becoming the nation’s largest real estate brokerage company based on transactions.

© 2018 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.

Kraft Heinz Maps Future With New Innovation Center in The Netherlands

(BRK.A), (BRK.B)

Kraft Heinz is opening a €90m innovation center in Amsterdam’s Zuidas business district.

The center will employ 450 people and its goal is not so much brand or product development as focusing the food conglomerate on new ways of operating.

The center’s location will be just 10 minutes from Schiphol airport, a major European hub.

The Centre for Excellence will “devise ways to work more efficiently by creating globally applicable best practices.”

“The Global Centre of Excellence is focused on new methods of growth and operational efficiencies while our R&D and culinary centre in Nijmegen continues to drive new product development across the Zone,” noted Rafa Oliveira, president of Kraft Heinz’s operations in Europe, the Middle East and Africa.

The Netherlands is a major focal point for Kraft Heinz’s European operations. The company already has a R&D and culinary center in Nijmegen and production facilities in Elst and Utrecht.

In 2017, the company opened a 61,700 sq m distribution facility at the Park15 industrial park in the Arnhem-Nijmegen region of the eastern Netherlands. The business park is strategically located between the port of Rotterdam and the German Ruhr Valley.

© 2018 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.

Mouser Electronics Recognized with More Than 25 Top Awards for Excellence

(BRK.A), (BRK.B)

Berkshire Hathaway’s Mouser Electronics has received over 25 top business awards from its supplier partners for exemplary performance during 2017.

Suppliers cited many criteria for the honors, including double-digit growth, fastest new product introductions (NPIs), breadth of inventory, best-in-class global marketing campaigns, customer growth, global expansion and commitment to teamwork.

“It is very rewarding to be recognized by our supplier partners, who share our mission of delivering the newest technologies and providing best-in-class customer service,” said Jeff Newell, Senior Vice President of Products at Mouser Electronics. “These awards honor the outstanding teamwork we share with these valued supplier partners.”

© 2018 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.