Category Archives: Stock Portfolio

Kraft Heinz ‘s Evolv Ventures Picks GrubMarket as its First Investment

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Kraft Heinz’s Evolv Ventures, the $100 million venture fund backed by the prepared foods company, has announced GrubMarket as its first investment.

GrubMarket is a platform that sources local food directly from producers and delivers it directly to businesses and consumers. Terms of the agreement were not released.

“We’re excited to invest in GrubMarket, a platform that is disrupting the food wholesale market,” said Steve Sanger, General Partner of Evolv Ventures. “GrubMarket plans to grow its presence and product offerings through both geographic and product expansion. Evolv Ventures is pleased to support its innovative founders.”

Since Evolv Ventures announced the formation of the fund in October 2018, the fund has quickly established itself by hiring an experienced team of investors and entrepreneurs and is actively working and investing with leading companies in the space, such as GrubMarket.

Evolv Ventures Capital Fund invests in emerging tech companies transforming the food industry. The venture fund aims to accelerate Kraft Heinz’s exposure to emerging technologies and businesses and leverage Kraft Heinz’s position in the industry to become the most value-added investor in the space.

© 2019 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 perfo

McLane and Popeyes End Restaurant Distribution Deal

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Berkshire Hathaway’s McLane Company, Inc., a leading supply chain services company providing grocery and foodservice supply chain solutions, has announced that its McLane Foodservice and Popeyes Louisiana Kitchen have mutually agreed to end their restaurant distribution relationship, effective July 2019.

McLane has been supplying the southern California, Arizona and southern Nevada geographies for Popeyes Louisiana Kitchen restaurants. While both entities appreciate their long-term relationship, each company believes this move will best serve its financial and operational needs in these geographic markets.

Despite this aspect of their relationship coming to an end, McLane will continue to play a part in Popeyes’s supply chain. KINEXO, a subsidiary of McLane that provides innovative supply chain solutions to respected brands in the foodservice industry, will continue to serve as Popeyes’s exclusive redistribution partner nationwide for numerous items from multiple suppliers used or sold in their restaurant outlets.

Additionally, McLane will continue to serve as a primary distributor to Burger King, which along with Popeyes, is owned by Restaurant Brands International.

One of Warren Buffett’s best deals in recent years was his 2014 financing of Burger King’s acquisition of Canadian restaurant chain Tim Hortons, which was renamed Restaurant Brands International.

The deal was financed by Berkshire Hathaway, and Berkshire’s role gave the conglomerate ownership and control over 4.18% of the outstanding Common Shares and 14.37% of the total number of votes attached to all outstanding voting shares of the newly created company.

Popeyes Louisiana Kitchen became a part of Restaurant Brands in 2017, when it was acquired for $1.8 billion.

© 2019 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.

BYD Pure Electric Buses Now Rolling in Ecuador

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BYD (Build Your Dreams), a world leader and pioneer in battery and zero-emission vehicles, has delivered twenty of its pure electric buses to the city of Guayaquil.

The buses will be operated by private bus operator Saucinc.

The port city, which is known as “the Gateway to the Galapagos,” is swapping its entire fleet of diesel transit buses for pure-electric buses.

The move comes after a five month pilot program proved the viability of the buses. The test bus ran an average of 250 kilometers per day.

BYD’s K9 buses feature air conditioning and Wi-Fi, and will have a dramatic impact on air pollution and fuel costs.

The buses are projected to reduce 12.8 tons of CO2 and 2.9 million gallons of diesel annually.

In addition to the buses, the city already has a fleet of BYD ev taxis in service.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

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

© 2019 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.

Special Report: Will BYD’s SkyRail Save Los Angeles Tens of Billions in Mass Transit Construction Costs?

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China’s BYD, a world leader and pioneer in battery and zero-emission vehicles, has proposed building its SkyRail monorail to ease congestion in one of Los Angeles’s busiest and most congested freeway corridors.

Is this the one proposal that could save Los Angeles billions in construction costs and shave decades off the construction timeline? It just may be.

It’s not just speculation. The idea is already under consideration. BYD’s SkyRail proposal is one of LA Metro’s four new refined concepts for the Sepulveda Transit Corridor.

The goal is to create a high-capacity transit line between the San Fernando Valley and the Westside through the Sepulveda Pass that would move some 100,000 people a day off the I-405 Freeway, which is already ranked as one of the most traveled urban highways in the nation.

According to LA Metro, over 400,000 people currently travel through this area every day to commute to work, school, and other destinations along the freeway and beyond.

LA Metro’s four concepts include three standard rail projects, similar to its current Red Line subway, and would either be underground or a combination of underground and above ground, and BYD’s SkyRail Monorail.

The Sepulveda Transit Corridor project would link San Fernando Valley and LAX, including connections to existing and planned Metro bus and rail lines, including the Orange, Purple, and Expo Lines, and is part of the Measure M expenditure plan, with approximately $5.7 billion for new transit service to connect the San Fernando Valley and the Westside, which is scheduled to open by 2035.

Passed in November 2016, Measure M is a voter approved countywide half-cent sales tax increase, which funds a $120 billion mass transit expansion plan.

Approximately $3.8 billion is already allocated to extend that service from the Westside to LAX with a 2057 opening date.

The Elephant in the Room

With public transit, the two biggest factors are always cost and time of construction. Certainly the biggest factor in LA’s case is cost. The standard heavy rail projects would cost tens of billions.

For example, LA’s currently under construction 9-mile Purple extension of the underground rail system that runs from the current Wilshire/Western station is budgeted at $8.2 billion and will take to decades to build.

The project broke ground in November 2014 and is not scheduled to be fully completed until 2035.

However, unlike a subway, BYD is proposing to build its SKY Rail monorail, which would run in a corridor down the middle of the I-405 freeway, saving billions in tunneling costs and environmental concerns.

SkyRail would be a fully integrated, driverless, state-of-the-art straddle type monorail that is far advanced from the monorails people are familiar with at theme parks such as Disney World and Disneyland.

Most importantly, BYD notes that its SkyRail is only one fifth the cost of a subway, and using BYD’s prefabricated track beams can in some cases mean a construction schedule as short as 2 years. That’s not to say LA’s system would be built that fast, but it certainly wouldn’t take decades.

As a public transit alternative to subways, BYD’s SkyRail delivers numerous benefits, including: capital expenditure 80% lower than subways, a construction period two-thirds shorter than subways, excellent topographic adaptability due to higher climbing ability and smaller turning radius, reduced noise to allow travel through architectural complexes, visual integration into the cityscape thanks to transparent bridges and independent right of way, flexible management to allow for capacity between 10,000 to 30,000 passengers an hour (each way) and a high speed of up to 80km/h.

The company notes that SkyRail is an effective complement to large cities’ subway networks, and BYD already has construction contracts in China for Shenzhen, Shantou, Xi’an, Bengbu, Guang’an, Jilin, Tianjin, and others.

Not Just a Concept

BYD put its first SkyRail in service in 2016 with a 5.4-kilometer trial line that connects BYD’s headquarters in Shenzhen with a nearby high-speed railway station.

BYD has landed contracts to build SkyRails outside of China, as well.

BYD is set to construct its first Latin American monorail in the Brazilian city of Salvador. Construction will commence in 2019 with the goal of being operational by 2021.

Like the LA proposal, the system will integrate with other mass transit. Salvador’s SkyRail will move a projected 15,000 passengers a day, connecting them to the public metro network that currently serves over 2.9 million people.

Will SkyRail be the choice of LA Metro? We will know more in roughly six months, as the 20-month study is expected to conclude by fall 2019.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

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

© 2019 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.

Todd Combs and Ted Weschler’s Portfolios Continue to Grow

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Todd Combs and Ted Weschler, the former hedge fund managers that Warren Buffett hired to manage a portion of Berkshire Hathaway’s stock portfolios, have continued to see their portfolios grow.

Combs was hired in 2010, and Weschler was hired in 2011, and each was initially given a billion dollar portfolio to separately manage. Over the past five years, Buffett has increased their portfolios as he has grown confident in their abilities. The portfolios have now reached $13 billion each, according to Buffett’s recent comment on CNBC.

Warren Buffett says Berkshire stock managers Weschler, Combs have trailed the S&P 500 from CNBC.

Berkshire’s total stock holdings total a whopping $183 billion, according to its most recent 13-F filing.

As Warren Buffett’s handpicked protégés, Buffett has praised their success, noting that “They have made Berkshire billions already that we wouldn’t have otherwise made,” he said on CNBC in 2014. “They both have a fundamental combination of soundness and brilliance.”

While Buffett notes that this past year “Overall, they are a tiny bit behind the S&P, each, by almost the same margin,” Buffett acknowledged to Becky Quick on CNBC’s “Squawk Box” that they were still doing better than he was.

More than Just Portfolio Managers

In addition to portfolio management, Combs sits on the Boards of companies that Berkshire holds sizable stakes in. Combs is on the Board of JPMorgan Chase & Co., and Paytm, and he also is playing a key role in the Amazon, Berkshire Hathaway and J.P. Morgan Chase healthcare joint venture, having been charged with finding the project’s CEO.

It was also Combs’s belief in aerospace manufacturer Precision Castparts that directly led to Buffett’s $32 billion acquisition of the company.

“You have to give Todd Combs credit for the deal,” Buffett said, noting that he had never heard of the company before Combs brought it to his attention. ”Todd told me a lot about it, and over the last few years I have become familiar with it,” he added.

Another winner was Combs and Weschler’s positions in DirecTV in 2014. The satellite broadcaster’s acquisition by AT&T brought an over $3 billion windfall for Berkshire, as its 4.5 million shares were purchased at roughly half the tender price of $95 per share offered by AT&T.

When the day come that the entire Berkshire portfolio is in Todd Combs and Ted Weschler’s hands, Berkshire’s shareholders will be able to sleep well at night knowing it is well-managed.

© 2019 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.

BYD’s EV Sales Up 300% January 2019 Over January 2018

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BYD (Build Your Dreams), a world leader and pioneer in battery and zero-emission vehicles, has announced that its year-on-year electric car sales rose almost 300% for the month of January 2019 over January 2018.

BYD’s official number is 292%.

The company sold 28,005 electric cars in China in January, which is its third highest month ever.

The robust sales are in great part due to the continued success of its BYD Yuan, which set its eighth consecutive month of record sales with 10,093 vehicles.

The Yuan ranks #1 in the plug-in electric car segment in China.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

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

© 2019 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.

Commentary: Berkshire Hathaway Takes the Easy Money in IBM-Red Hat Merger

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In life there’s hard money and there’s easy money. There are times when you work day and night and have little to show for it, and there are times when the money falls like leaves from a tree.

One thing about Berkshire Hathaway, they’re never afraid to make money the easy way.

And what could be easier than with a click of a mouse buying up shares that somebody’s already committed to paying more for?!

With IBM set to buy Red Hat Software for $34 billion, Berkshire Hathaway has been busy buying up shares for what looks to be a profitable merger arbitrage play.

IBM’s move is the third-biggest U.S. technology merger history, trailing only Dell’s acquisition of EMC, and the JDS Uniphase acquisition of SDL, and Berkshire has jumped in and scarfed up 4,175,792 shares of Red Hat at an average price of $175.64 per share, it just revealed in its latest 13F filing for Q4 2018.

The shares represent 2.3730% of the software and cloud computing company, and if the deal goes through, Berkshire will make a profit of 7.55% for just buying and holding until the closing date.

The deal is expected to close in late 2019.

Berkshire does not disclose who makes a particular stock purchase or sale, so it’s not known whether the move is the handiwork of Warren Buffett, or his portfolio managers Todd Combs and Ted Weschler.

Combs and Weschler each handle separate portfolios of roughly $10 billion each, which combined is just over 10% of Berkshire’s diverse $183 billion portfolio of shares in companies such as Apple, Coca Cola, Bank of America, Wells Fargo, American Express, JP Morgan Chase, Delta, Goldman Sachs, and Southwest Airlines, among others.

IBM hopes its acquisition of Red Hat will provide an open approach to cloud computing, and make IBM the #1 hybrid cloud provider in an emerging $1 trillion growth market. It plans for Red Hat to operate as a distinct unit within IBM’s Hybrid Cloud team.

We Don’t Care. We Don’t Have To

However Red Hat operates, it won’t matter to Berkshire.

Berkshire previously dumped all its IBM shares when it lost hope in IBM’s growth plans after company racked up almost six years of declining sales.

Unlike IBM, Red Hat has seen dramatic revenue growth. Its revenue shot up 21% between the 2017 and 2018 fiscal years.

However, IBM’s offer to pay $190 a share for Red Hat has Berkshire excited if not for IBM, than at least for the billions it will pay for Red Hat.

IBM is swinging for the fences with its largest acquisition in its history. And Berkshire is more than happy to hit a nice clean single of its own.

© 2019 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.

BYD on a Roll with 50,000 Electric Buses

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BYD (Build Your Dreams), a world leader and pioneer in battery and zero-emission vehicles, has hit a remarkable figure in its quest to get the world of buses to change from the soot-belching, diesel polluters of yore, to a vehicle that’s on the forefront of environmentally sound transportation.

BYD reached has a new milestone with the completion of its 50,000th battery-electric bus.

The company notes that according to the U.S. Department of Transportation’s research, operating 50,000 electric buses is equivalent to taking 1.35 million cars off the road and eliminating 84.5 million tons of C02 over the vehicles’ 12-year lifespan.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

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

© 2019 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.

Fleet of BYD Electric Buses to Run in Colombia

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BYD (Build Your Dreams), a world leader and pioneer in battery and zero-emission vehicles, has sold 64 electric buses to Medellín, Colombia’s second largest city.

The order is second in Latin America only to Chile’s order of 100 buses.

The buses will be BYD’s 12.5-meter-long K9G, which has a seating capacity of 80. The buses are have a range of roughly 300 kilometres per charge, with a two hour charging time.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

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

© 2019 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 Completes Acquisition of Primal Nutrition

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The Kraft Heinz Company has completed its acquisition of Primal Nutrition, LLC, makers of Primal Kitchen branded products.

Primal Kitchen is a young, vibrant, better-for-you brand primarily focused on Condiments, Sauces and Dressings including Mayonnaise, Salad Dressings and Avocado Oil, with growing product lines in Healthy Snacks and other categories.

Primal Kitchen will join Kraft Heinz under Springboard, which is Kraft Heinz’s dynamic platform created to partner with founders and brands that will disrupt the food industry.

Leveraging Kraft Heinz’s assets and infrastructure, Primal Kitchen will operate as an autonomous company and continue to be led by its current leadership team. Its headquarters will remain in Oxnard, California.

“Primal Kitchen is an authentic, premium and growing brand that complements our core Condiments & Sauces categories,” said Paulo Basilio, U.S. Zone President for Kraft Heinz. “We are excited to partner with the Company’s strong team to drive growth across multiple categories and reach more consumers looking for these amazing products.”

Mark Sisson, Co-Founder of Primal Kitchen said, “Kraft Heinz recognizes the value of our Primal Kitchen mission and the consumer demand for it. This philosophy will stay with us as we leverage the resources of this new partnership to reach millions more of the consumers who have been seeking products like ours for years.”

© 2019 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.