Tag Archives: Stock Portfolio

Kraft Heinz Updates Classic Brands for Millennials

(BRK.A), (BRK.B)

With Kraft Heinz facing a millennials generation of consumers focusing increasingly on products billed as healthy and organic, the processed food manufacturer is not only looking to launch news products, but also to update its classic brands.

On the new products front, the company recently launched Springboard, a platform dedicated to nurturing, scaling, and accelerating growth of disruptive US brands within the food and beverage space.

According to the company, the Springboard platform is seeking opportunities to develop brands with authentic propositions and inspired founders within one of four pillars that are shaping the future of the food and beverage space: Natural & Organic, Specialty & Craft, Health & Performance and Experiential brands.

“We are committed to support and partner with teams that will impact the future of our industry,” said Sergio Eleuterio, General Manager, Springboard Brands. “We are actively searching for emergent, authentic brands that can expand into new categories, and are looking to build a network of founders to help shape the future of foods and beverages.”

As for Kraft Heinz classic brands, it is increasingly reformulating its products to meet millennials’ shopping priorities.

Kraft Heinz’s CEO Bernardo Hees cites CapriSun, which millennials grew up with, as a brand that they will come back to now that it has an organic line. It advertises that its CapriSun Organic uses organic juice from organic farms.

In 2016, the company’s Kraft Mac & Cheese, which generations of children have eaten the bright orange noodles, successfully removed the artificial food colors, including yellow 5 and yellow 6, and replaced them with paprika, annatto and turmeric. Consumers didn’t notice the difference in the product’s look and feel.

Even the iconic hot dog, that most processed of foods, got reworked, In 2017, the Oscar Mayer brand changed its hot dogs to contain no added nitrates or nitrites, no artificial preservatives in their meat, and no by-products in every single one of their hot dogs. Oscar Mayer trumpets that it was the first national brand to do this across every single one of its hot dogs.

Kraft Heinz’s first-quarter net income rose to $993 million, 81 cents a share, up from $893 million, 73 cents a share, from the same period in 2017.

© 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.

Commentary: Buffett Unlikely to Abandon BYD

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With Chinese new energy company BYD seeing a major slump in its share price, its important to remember that Warren Buffett’s belief in the company’s founder and CEO Wang Chuanfu makes it more likely that Buffett will buy more shares, or at least maintain Berkshire’s current position than abandon the investment.

BYD’s share price peaked at 83.70HKD in October 2017 and as of May 2 has slumped to 54.00HKD.

Berkshire’s still way ahead, as its cost basis per share was 8.00 HKD. Berkshire took its position in 2008 when it purchased 225 million shares at roughly 8.00KHD.

Whose idea was it to purchase a stake in the company? It wasn’t Buffett’s, but he has since become a big fan.

“Charlie (Munger) called me one day and says, ‘We’ve got to buy BYD. This guy that runs it is better than Thomas Edison,’ Warren Buffett explained while appearing on CNBC’s Squawk Box on Feb 26, 2018. “And I said, ‘That isn’t good enough.’ And then he called a little later and said, ‘He’s a combination of Edison and Bill Gates.’ And I said, ‘Well, you’re warming up but it still isn’t good enough.’ Anyway, Charlie wanted to do it. Now, it’s worked out so well that I’m actually starting to remember that it was my idea. As it’s coming back to me. I think I persuaded Charlie. But unfortunately I’m on the record that it’s his deal. But BYD, Charlie’s in love with the company, and it’s done very well. And the fellow that runs it, you know who’s autos and batteries, but he’s got big, big ideas and he’s very good at executing. So, but I leave it to Charlie.”

Stock prices go up and down, but Buffett has always been the most patient of investors.

With BYD having sold 13,000 of its plug-in electric cars in March alone, and aiming to sell between 15,000 and 20,000 cars per month when its new model year debuts, it continues to be the leader in EV cars.

The sales marked an increase of 116% year-over-year and were 31% of the total BYD car sales for the month.

BYD was number one worldwide in plug-in electric vehicle sales in 2017, its third consecutive year.

Additionally, its dominance in the Pure electric bus market continues to grow. The company sold over 14,000 pure electric buses globally in 2017.

It’s unlikely that Buffett’s or Munger’s respect for the company will change due to short-term price fluctuations and investors should be reminded that BYD’s stock price had a similar plunge in 2014 that saw no selling by Berkshire.

I’m not calling this one of Buffett’s forever stocks, but it would seem to fit one of his classic buy-and-hold investments, and it is unlikely to leave Berkshire’s portfolio anytime soon.

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

© 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 Partners with the Food Network for Product Line

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Kraft Heinz has launched Food Network Kitchen Inspirations, a new line of globally inspired Salad Dressings, Cooking Sauces and Meal Kits.

Food Network Kitchen Inspirations is billed as the first-ever grocery product line from Food Network that allows fans to bring home the flavors of the Food Network.

Food Network Kitchen Inspirations gives people the tools they need to make dishes they’re proud of. Every product in the new line either inspires people to try global flavors at home with meal kits like Chicken Tikka Masala, or takes classics up a notch with an inspired take on Creamy Parmesan Caesar Dressing. Each category incorporates authentic flavors and is made with high-quality ingredients, free from artificial flavors, colors or dyes.

“At Kraft Heinz, we are known for our iconic brands that have been staples at dinner tables for decades. This opportunity is especially exciting for us because the new Food Network Kitchen Inspirations products make it easy for people to expand beyond their culinary comfort zones and try new flavors,” said Liz Rubin, senior associate brand manager for Meals at Kraft Heinz. “We are thrilled to partner with Food Network to help consumers spice up their meals and inspire them to get creative in their own kitchens.”

“Food Network has always been a source of culinary inspiration and education, but until now has never offered food products people can bring into their homes,” said Ron Feinbaum, senior vice president and general manager of home promotions and consumer products for Discovery, Inc., parent company of Food Network. “With busy schedules, we know that weeknights can be the hardest time to try new recipes, but with Food Network Kitchen Inspirations Salad Dressings, Cooking Sauces and Meal Kits, people can now make convenient meals without sacrificing flavor.”

“The inspiration for this new product line grew out of a successful marketing partnership we’ve had for many years with The Kraft Heinz Company,” added Karen Grinthal, senior vice president of national ad sales for Food Network. “Kraft Heinz is a key partner with Food Network, and we couldn’t be more pleased with this exciting evolution.”

© 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.

Louisiana Goes for BYD’s Pure Electric Buses

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BYD, the largest battery-electric bus manufacturer in North America and the largest electric vehicle company in the world, today announced a new order that will see three American-made BYD K9S electric buses deployed in Baton Rouge, Louisiana, under the authority of the Capital Area Transit System (CATS) later this year. The purchase of these new buses reflects BYD’s continued dominance of the North American battery-electric bus market as well as the continuing growth of the sector across the continent.

“In every corner of the continent, we are witnessing rapid growth in the electrification of bus fleets,” stated Macy Neshati, BYD Senior Vice President. “Whether you are looking at the hot and humid climates of the Deep South, the wet weather of the Northwest or the frigid climates of the North, BYD buses are workhorses that can handle any condition.”

With a range of approximately 150 miles on a single charge and a capacity of up to 32 passengers, depending on configuration, the K9S is ideally suited for the needs of Baton Rouge. BYD buses are projected to cost roughly $1.00 less per mile to operate than the typical diesel-powered bus. The new buses produce zero emissions and make oil changes a thing of the past. The proprietary BYD Iron-Phosphate battery is nontoxic, 100% recyclable, fire-safe and incredibly long-cycled. In fact, BYD is the first and only electric bus manufacturer to offer a full 12-year warranty on batteries.

We are excited to incorporate electric buses into our planned Bus Rapid Transit projects in Baton Rouge,” said Bill Deville, CATS CEO. “These buses will allow us to see how we can use electric buses to reduce the impact of our fleet on our environment and also control costs.”

CATS provides bus service to residents of and visitors to Baton Rouge, Louisiana. They operate 29 bus lines and provides more than 2 million rides each year. To CATS leaders, the new buses constitute an important opportunity to innovate.

“Electric buses are a big step forward for CATS. They represent a chance to pilot new technology in Baton Rouge, and we are very excited about that,” said Jim Brandt, President of the CATS Board of Commissioners.

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.

© 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.

BYD’s China Vehicle Sales Top 13,000 in March

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While Tesla struggle to manufacture 2,000 Model 3 cars a month, Chinese new energy company BYD sold 13,000 of its plug-in electric cars in March.

The sales mark an increase of 116% year-over-year, and were 31% of the total BYD car sales for the month.

BYD is aiming to sell between 15,000 and 20,000 cars per month when its new model year debuts. The number is not unexpected, as the company sold 15,873 plug-in electric cars in December 2017.

BYD was number one worldwide in plug-in electric vehicle sales in 2017, its third consecutive year.

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.

© 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.

BYD to Separate Vehicle Manufacturing from Battery Biz

(BRK.A), (BRK.B)

In a move that is directly the opposite of Tesla’s acquisition of Solar City, Chinese new energy company BYD will reportedly spin-off its photovoltaic and rechargeable battery businesses into a separately traded public company.

Nissan made a similar move in the fall of 2017 when it sold its electric battery operations and production facilities to Chinese private investment fund GSR Capital.

BYD is currently one of the world’s top PV manufacturers, and produces from wafer to module with an automatic production line.

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.

© 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.

BYD’s Electric Buses Launched in South Korea’s Jeju Island

(BRK.A), (BRK.B)

New energy technology company BYD has debuted a fleet of 20 of its pure electric buses in South Korea’s pristine Jeju Island, the largest project of its kind in Northeast Asia.

The launch represents another milestone for BYD, which has gradually evolved from a rechargeable battery manufacturer to a new energy giant since its establishment in 1995.

BYD’s electric vehicles have a footprint in more than 200 cities worldwide.

The BYD eBus-7, the only pure electric mid-size bus in the South Korean market, will operate in Udo, the largest island of Jeju Island.

The eBus-7 is a compact 15-seater body that enables it to navigate the narrow roads of the small island with ease and without any carbon emissions.

The bus can travel a minimum range of 200 kilometers on a single charge, requiring only two hours to be fully charged.

BYD has rapidly drawn the attention of South Korean officials since its market entry in 2015 with product features such as the plug-and-charge capability of its electric buses.

Last December, the company’s President and founder Wang Chuanfu was among a group of industry delegates invited to attend a discussion with South Korean President Moon Jae-in during his official visit to China.

Earlier BYD also welcomed a group of 60 residents from Udo Island – approximately five percent of the local population – as they personally inspected the eBus-7 at BYD’s Shenzhen headquarters before the order was placed.

“Our track record in renewable energy reflects our mission to do something for the environment with the highest quality,” said Liu Xueliang, General Manager of BYD Asia Pacific Auto Sales Division. “Having passed South Korea’s rigorous vehicle safety standards, the eBus-7 is reflective of the excellent engineering behind our vehicles and suitable for the fragile terrain of Udo Island.”

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.

© 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.

Thailand Next Country for BYD’s Pure Electric Taxis

(BRK.A), (BRK.B)

With BYD’s pure electric e6 taxis on the streets in more than 10 countries, the company is looking towards the Southeast Asian motor hub of Thailand for its next major launch.

The environmentally friendly taxis are capable of reaching a maximum distance of 350 kilometers on a single charge, and will operate in Bangkok as a premium taxi service.

BYD aims to introduce 1,000 pure electric taxis in Thailand by 2019, with the first hundred scheduled to hit the streets this month.

Thailand has introduced policies ranging from tariff to corporate income tax cuts to boost the production and use of electric cars in the country.

The official selection of BYD as the provider of the country’s first fleet of pure electric taxis is in line with the country’s ambitions of having 1.2 million green energy vehicles ply its streets.

“We are honoured to have secured the trust of Thailand’s authorities amidst stiff competition,” said Liu Xueliang, General Manager of BYD Asia Pacific Auto Sales Division. “In future everyone will have the added option of experiencing the sights and sounds of Bangkok in comfort, and in a way that’s better for the environment.”

In 2017, BYD sold around 130,000 units of new energy vehicles, ranking number one in global new energy vehicle sales for the third consecutive year. Since its establishment in 1995, the company’s renewable energy products have gained a footprint in more than 200 cities around the world including Okinawa, London and Singapore.

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.

© 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.

BYD Announces 75MW PV Project in Australia

(BRK.A), (BRK.B)

New energy company BYD has signed with Biosar for a 75MW PV project in Australia. The project cost is roughly $30 million USD.

The PV project uses BYD’s half-cell solar panel with 18.8% average power, which is 3% higher than the conventional module’s power output.

Biosar, the subsidiary of the largest Engineer, Procure, Construct consultants (EPC) AKTOR in Greece, is mainly responsible for EPC for PV projects all over the world, and it has about 1GW of PV projects in Brazil, Argentina, UK and other countries.

This 75MW PV project is the largest one Biosar has in Australia, and is also the largest project for BYD in Australia.

After the project is finished, it will provide about 13.6 million Kwh per year to Queensland, and provide sustainable green power to 65,000 families per day.

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.

© 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 Likely Bidder for GlaxoSmithKline’s Horlicks

(BRK.A), (BRK.B)

GlaxoSmithKline is looking to find a buyer for its malted-milk brand Horlicks, as it raises funds for its $13 billion buyout of its consumer healthcare joint venture with Novartis.

Reportedly in the bidding for Horlicks is Kraft Heinz, as the drink is popular in the United Kingdom, Australia, New Zealand, Hong Kong, Bangladesh, India, and Jamaica.

Made from wheat, malt barley, sugar, milk and vitamins, the beverage dates back to 1873 when Horlicks was invented by two British-born men, William Horlick and his brother James Horlick from Gloucestershire, England. James was a chemist, working for a company that made dried baby food. William, the younger brother, had emigrated to the United States in 1869 and James decided to join him in Chicago in 1873. That same year, they started their own company, J&W Horlicks, to make a malted milk drink. They called their product ‘Diastoid’ and their advertising slogan read: ‘Horlick’s Infant and Invalids Food’.

The company that acquires Horlicks will have to cope with a decline in the popularity of malted-milk sector. In India, negative volume growth in the health food drinks segment was -6.8% in 2016-17, according to India’s The Economic Times.

“Horlicks is a terrific brand with a long history, especially in India,” GSK Chief Executive Officer Emma Walmsley noted at a recent investors’ meeting. “But in the context of funding for this (Novartis) transaction and our desire to increase focus on our over-the-counter and oral health portfolios, as well as other group capital allocation priorities, it makes sense for us to review it.”

© 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.