Month: January 2017

Categories
Insurance

Berkshire Hathaway Travel Protection Report Identifies a Potential 4.9% Increase for Travel Insurance Sales to Americans

(BRK.A), (BRK.B)

Berkshire Hathaway Travel Protection’s (BHTP) second-annual benchmark white paper report released today identifies a potential 4.9% increase for travel insurance sales to Americans traveling this year.

The Report uses surveys and a predictive global-travel model to produce its findings, which reveal that 36% of consumers expect to buy more travel insurance in 2017, and nearly 61% of travel agents predict that 2017 will be a better year for travel insurance.

The Report’s 10 most influential factors impacting travel insurance sales in 2017:

1. Travel on the rise means more trips to insure in 2017

41% of BHTP travelers indicate they plan to take more international leisure trips in 2017. Significantly more international leisure trips are covered by travel insurance (39%) than domestic leisure trips (16%), which appears to lead to an expected increase in travel insurance sales.

2. Increase in trip costs leads to higher travel insurance revenues

45% of travelers stated they would buy more travel insurance in 2017 because of the cost of the trip. The expected 4% increase in trip costs due to currency fluctuations, increases in lodging costs, airfares, cruise costs and ground transportation can lead to higher travel-insurance premiums and eventually higher travel insurance revenues.

3. Flight issues like cancellations and delays are among the top reason why consumers intend to buy more travel insurance

71% of travelers bought more travel insurance in 2016 because of flight issues like cancellations and delays. Innovative travel insurers seeking to provide benefits related to flight interruptions may succeed by meeting the needs of this segment with flight-protection coverage such as AirCare.

4. Increased knowledge of how travel insurance works

40% of consumers said they were buying more travel insurance because they had better knowledge of how travel insurance products works.1

5. Increased use of travel agents leads to increased travel insurance sales

More than 18% of travelers use a travel agent to book travel and 94% of travel agents said they offer travel insurance with every travel sale.

6. Family health ranks among the top reason to buy more travel insurance

32% of respondents said they bought more travel insurance in 2016 due to family health reasons. Consumers’ concerns over the health of family members appears to make “cancel for any reason” coverage more appealing.

7. Rising interest in cruise travel for 2017 will be a key driver of travel insurance sales

Nearly 38% of agencies said river cruises have been the top type of trip in 2016, and 67% expect river cruises to be the top driver of improved business performance in 2017. European river cruises ranked third on travel agent’s list of top destinations for 2017.

For consumers, 39% expect to take more river cruises, and 36% expect to take more ocean cruises in 2017. When these facts are viewed with an increase in cruise-ship capacity of more than 17,000 in 2017, travel insurance sales may see an increase, since most cruise vacations are insured.

8. Bucket-list and adventure travel hot travel types in 2017

76% of agents listed bucket-list travel as a hot trend for 2017, and 53% of travelers said they traveled to cross something off of their bucket list. 36% of travelers said they are planning more adventure trips in 2017, and 41% of agents said adventure travel will be a top driver of improved business.

9. International terrorism is a threat to travel and a reason to buy more travel insurance 60% of travel agencies and 25% of travelers told BHTP that international terrorism was a threat to traveling, and 12% of travelers stated that fear of terrorism is a reason for buying more travel insurance.

10. Zika no longer a top-of-mind threat, leading to an increase in travel to the Caribbean

A possible 12% increase in travel to the Caribbean could be realized in 2017, as Zika has been declared by the World Health Organization to no longer be a “global health emergency.” Caribbean and Central America travel may also see a 10% increase in travel insurance sales, the largest increase of any region given the current data. Only 4% of respondents, however, said fears of disease epidemics are leading them to buy more travel insurance.

Travel insurance sales by destination

BHTP’s Report also looked at travel demand and travel insurance sales on a region-by-region basis. The highlights are:

Insurance sales for travel to the Caribbean and Central America are expected to increase by almost 10%, driven by a strong rebound in travel to the region;

Europe remains a polarizing destination for travelers and travel agents, though river cruises and low airfares will help contribute to increased European travel and a 4% increase in travel insurance sales; and
A post-Olympics decline in South American travel will lead to a 7% decline in travel insurance sales for the region.

About the State of Travel Insurance

The State of Travel Insurance includes responses from 573 travelers and 96 travel agencies about their travel habits, their travel business, their experiences in 2016 and/or their expectations for 2017. The confidence levels in both surveys are sufficient to draw large-scale conclusions from the results. Sources consulted in preparing this report included travel-trend reports from the Global Business Travel Association, Sojern, IATA, Cruise Lines International Association, and cruisemarketwatch.com. MMGY Global’s Portrait of American Travelers was particularly helpful. Data from these sources were used to create detailed models of trip costs to various regions, to extrapolate out the Commerce Department statistics, and to make projections on percentage of covered trips, traveler ages, and travel-insurance cost as a percentage of trip cost. These projections were used to calculate total 2017 travel-insurance sales, and then those figures were compared against last year’s figures to chart percentage change.

About Berkshire Hathaway Travel Protection

Berkshire Hathaway Travel Protection is the trade name for the travel protection services of Berkshire Hathaway Specialty Concierge, LLC, a subsidiary of Berkshire Hathaway Specialty Insurance Company, part of the National Indemnity group of insurance companies. Berkshire Hathaway Travel Protection created AirCare flight and other travel related protections. The AirCare product is provided by Berkshire Hathaway Specialty Insurance Company or National Liability & Fire Insurance Company.

© 2017 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

Kroger Moves its Convenience Store Business to McLane

(BRK.A), (BRK.B)

In a major move, Kroger is moving its convenience store business to Berkshire Hathaway’s McLane Company.

McLane Company has announced a service agreement with Cincinnati, Ohio-based The Kroger Co. and its 787 c-stores located across 18 states.

Kroger has a variety of convenience stores under the banners Loaf ‘N Jug, Turkey Hill Minit Market, Tom Thumb, Kwik Shop and Quik Stop.

“We look forward to our partnership with McLane and the company’s ability to support our continued focus on the products that matter most to our customers”

“Kroger continues to raise the bar in terms of product and foodservice offerings, convenient locations and customer satisfaction. We look forward to seeing explosive growth and success as the company capitalizes on the many customer-centric offerings that set McLane apart from the competition. Whether it is the centralized control of our procurement and operations that provide our customers superior service and consistency of performance and product offerings regardless of location, to taking advantage of our best-in-class technology to assist in reducing cost and driving efficiency at retail,” said Tony Frankenberger, president of McLane Grocery.

Frankenberger added, “Like Kroger, McLane continues to set itself apart from the rest of the industry and we are honored they have chosen to take advantage of our industry-leading cold chain network, expanded fresh foods program and award-winning category management expertise. We are proud to partner with such a strong leader within our industry and look forward to building the foundation for a long lasting and mutually successful relationship.”

© 2017 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
Commentary

Commentary: Should Berkshire Pay a Dividend?

(BRK.A), (BRK.B)

Like the sparrows returning to Capistrano, or geese flying south for the winter, some things are annual events. Such, is the case with the seemingly annual articles calling for Berkshire Hathaway to pay a dividend or do share buybacks. After all, Berkshire builds up free cash at the rate of roughly $1.5 billion a month, and Omaha being the small place that it is must be running out of places to put it.

It’s a situation that just seems to be getting bigger and bigger, and it has been for decades.

In 2007, Buffett plunked down $4 billion to buy 60% of the holding company the Marmon Group from the Pritzker family.  At the time, Berkshire was sitting on a record $40 billion in cash, and the purchase of Marmon’s 63 companies was a good use of some of that money as it greatly expanded the breadth of Berkshire’s manufacturing companies.

Here we are a decade later and Berkshire has over twice the cash it had at that time despite having acquired much larger companies in the interim period, including BNSF Railway and Precision Castparts.

At times, Berkshire reminds me of the fairy tale “The Sorcerer’s Apprentice,” where the magician’s apprentice cuts a broom in half only to find it turn into two brooms. Each broom he cuts becomes another pair of brooms until he is surrounded by brooms. While not every investment Berkshire has made has worked out, many of them have worked out so well that the cash used to purchased them has been returned to Berkshire and the acquired company then produces even more cash.

Currently, Berkshire is again sitting on over $91 billion in cash. Even deducting the $20 billion Warren Buffett likes to keep on hand in his rainy day fund for protection against recessions, great recessions, or great depressions, there is a lot of spare cash piling up, Surely, as some ask, they won’t miss $5 billion or so a year if they kick it out as a dividend?

Just this month, Bloomberg News published “The Case for a Berkshire Dividend,” which trod this familiar ground. In their defense, this is certainly one of the top questions I’m asked whenever I discuss Berkshire with anyone. “Don’t Berkshire shareholders deserve a dividend?” After all, the company has an ever growing cash hoard.

I will save the suspense and get right to my answer. In my opinion, shareholders may deserve it, but they should not want it.

Now that you have my answer, let’s look at why I say no.

Warren Buffett doesn’t like the idea

Going against the wisdom of the world’s greatest investor has been a losing strategy for decades, and in this case, Warren Buffett doesn’t believe a dividend is the right thing to do. When it comes to Berkshire, Buffett applies the same standard as he does with evaluating any other company, and looks at the “’what-will-they-do-with-the-money’ factor.” In Buffett’s view, Berkshire is better off holding on to cash in order to have it available not just for security in economic down times, but to make clever financing deals and to fund acquisitions big and small.

Buffett uses Berkshire’s cash to make the company better

If you liked the old Berkshire Hathaway you probably love the new and improved Berkshire. Over the last decade, Buffett has used Berkshire’s cash to acquire “elephants” such as BNSF Railway ($35 billion) and Precision Castparts ($37.2 billion), which have strengthened and diversified Berkshire’s earning power. He has also used the cash to purchase sizeable but smaller companies, such as the Van Tuyl Group auto dealerships ($4.1 billion), electric utility NV Energy ($5.6 billion), and Altalink ($2.9 billion). What’s more, Berkshire’s cash ($12.25 billion) enabled it to become the majority shareholder in Heinz, which through another mega-acquisition made Berkshire the largest shareholder in Kraft-Heinz.

In addition to all these large and medium-sized acquisitions, Berkshire has plenty of money for “bolt-on” acquisitions that strengthen its existing businesses. On average, Berkshire spends roughly $3 billion a year acquiring companies that its managers believe will strengthen their various businesses.

For example, in 2012, Berkshire’s McLane Company, a $33+ billion dollar supply chain services company that provides grocery and foodservice supply chain solutions for convenience stores, mass merchants, drug stores, and chain restaurants throughout the United States, acquired Meadowbrook Meat Company, one of the nation’s largest customized foodservice distributors for national restaurant chains. The acquisition boosted McLane’s revenues by roughly 20 percent.

Year after year, Berkshire’s stable of companies get stronger and own more market-share as Buffett allocates capital among the existing businesses.

Many of these acquisitions are small relative to Berkshire’s size but meaningful to growing Berkshire’s individual businesses. MiTek Industries, for example, acquired M&M Manufacturing in 2015, and three more companies, Sales Simplicity Software, Wrightsoft, and DIY Technologies in 2017.

Stock buybacks only make sense when the stock price is below its intrinsic value

As for stock buy backs, trading a dollar for anything less than a dollar doesn’t make a lot of sense. Still, many companies do it to satisfy investors hungry for short term boosts to stock prices, and quite frankly, to keep up with what has become Wall Street’s latest fad.

Warren Buffett noted in his 2011 letter to shareholders, “Charlie and I favor repurchases when two conditions are met: first, a company has ample funds to take care of the operational and liquidity needs of its business; second, its stock is selling at a material discount to the company’s intrinsic business value, conservatively calculated. We have witnessed many bouts of repurchasing that failed our second test.”

Dividends are a one size fits all solution seeking a problem

Don’t need cash? Well, you are getting it anyway. As Warren Buffett noted in his 2013 shareholder’s letter, “dividends impose a specific cash-out policy upon all shareholders.”  Rather than you deciding when to cash-out, the decision is made for you, whether you want it or not. This is like having a neighbor decide to sell a small parcel of land to finance his daughter’s wedding, and requiring you to do the same even though no one in your family is getting married.

Warren Buffett is a better investor than you are, way better

By letting Berkshire maximize the amount of cash it has available for investing, it is able to make deals that you can only dream about. Here is just one example. In 2014, Berkshire provided provided $3 billion in financing so that Burger King could acquire Canadian restaurant chain Tim Hortons. The deal gave Berkshire preferred stock paying a sweet 9% return on its money. In a low interest rate environment, 9% was a very nice return, beating at that time any CD you wanted to put your dividend check into. But wait, there’s more. Berkshire also received warrants enabling it to buy 8,438,225 common shares of the newly christened Restaurant Brands International for a penny a share. How has that $84,438 investment worked out? As of January 20, 2017, Berkshire’s $84,438 has turned into $410,182,117. Think you can do better?

What happens when Buffett is no longer at the helm?

Granted, it will be hard for any future CEO to match Buffett’s legendary mix of investing savvy, patience, and creativity, but wouldn’t you want the next Berkshire CEO to have the full resources available for investing that Buffett had? Why handicap future CEOs with less free cash to invest? Starting a dividend now, would only create a situation that Buffett’s successors would be unable to discontinue.

In Conclusion

Last, but not least, you have to ask yourself what you would do with the money you received from your dividend. If you have someplace better to invest it than in Berkshire then why didn’t you invest it there in the first place? Just look at 2016’s results. Berkshire’s stock rose 24.36% as compared to the S&P 500’s $11.24% increase. Money invested in Berkshire was the winning bet.

If you are a Berkshire Hathaway shareholder, you already own a portion of one the world’s strongest, most diversified companies. It’s a conglomerate that is managed by the most successful investor of all time.

Perhaps someday Berkshire will run out of elephants to acquire, or will not need to make bolt-on acquisitions that help its existing companies grow, but until that time, I want to leave my money invested right where it is.

© 2017 David Mazor

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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
GEICO Insurance

GEICO Hiring in Georgia

(BRK.A), (BRK.B)

One Hundred new jobs are coming to the Peach State, as GEICO continues to grow its operations in Macon, Georgia.

GEICO’s Macon regional office is looking for local Georgians interested in joining its team of claims representatives.

“In the event of an accident, GEICO’s claims representatives are the first to assist our policyholders when they need it the most,” said Shawn Burklin, senior vice president. “That’s why it’s so important for us to have a great team of associates ready and willing to serve our customers. If you are up to the challenge, we want to hear from you.”

Qualified candidates who have excellent customer service, communication and decision making skills, experience with computers, a good work ethic, and are comfortable working in a fast-paced environment are encouraged to apply.

© 2017 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
BNSF

BNSF to Spend $3.4 Billion in 2017

(BRK.A), (BRK.B)

BNSF Railway is committing $3.4 billion in 2017 to maintain and upgrade its 32,000-mile system.

“Each year we establish a capital plan that reflects the future needs of our customers and the constant need to keep our infrastructure in good working condition. This year’s capital plan ensures we continue to operate a safe and reliable rail network while capturing the new opportunities our customers will present to us,” said Carl Ice, BNSF president and chief executive officer. “Our ongoing investments, along with the outstanding efforts of our employees, resulted in the lowest number of derailments in company history last year. The strength and condition of our railroad today gives us the confidence that we will operate safely in the communities we serve and meet our customers’ expectations of reliable and consistent service.”

The company notes that similar to last year’s $3.9 billion plan, the largest component of the plan will be to replace and maintain BNSF’s core network and related assets.

This year that component is expected to be $2.4 billion. The projects included in this part of the plan will primarily be for replacing and upgrading rail, rail ties and ballast (which are the main components for the tracks on which BNSF trains operate) and maintaining its rolling stock. This year’s maintenance program will include approximately 20,000 miles of track surfacing and/or undercutting work and the replacement of about 600 miles of rail and nearly 3 million rail ties.

Rounding out the plan will be $400 million for expansion projects, $100 million for the implementation of positive train control and $400 million for locomotives, freight cars and other equipment acquisitions.

The states on the BNSF network estimated to receive the largest investments this year include:

· Texas – $255 million
· Illinois – $190 million
· Washington – $175 million
· California – $170 million
· Kansas – $125 million
· Missouri – $120 million
· Montana – $100 million
· Nebraska – $100 million

© 2017 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
Acquisitions MiTek

MiTek Acquires Wrightsoft

(BRK.A), (BRK.B)

Berkshire Hathaway’s MiTek Industries has acquired Wrightsoft Corporation, a leading provider of software for residential and commercial energy code compliance and HVAC system design. Wrightsoft is headquartered in Lexington, Massachusetts

“I’m thrilled with the acquisition of Wrightsoft, as this expands our technology leadership into a new area of residential and commercial construction for MiTek: energy load calculation and HVAC system design,” stated Tom Manenti, Executive Chairman of MiTek. “Aligned with our current software platforms, Wrightsoft will provide MiTek a new software extension into this essential aspect of residential and commercial construction. The resources MiTek brings to bear, coupled with Wrightsoft’s deep industry relationships, unique expertise, and proprietary software, will provide unequalled capabilities and efficiencies to MiTek’s growing residential and commercial customer base.”

“We are delighted to welcome Bill Wright and his leadership team to the MiTek family, and we look forward to working with them to continue providing exemplary service to their customers and growing Wrightsoft’s business,” Manenti commented.

Bill Wright, founder and President of Wrightsoft added, “We have successfully partnered with MiTek for a number of years now, and I am excited Wrightsoft has joined the MiTek and Berkshire Hathaway family. MiTek’s values-based approach to leadership combined with its vision of providing unsurpassed, value-added technology to the global residential and commercial construction industry, make this a perfect fit for Wrightsoft and all its employees.”

© 2017 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
NetJets

NetJets and Southwest Pilots’ Unions Seek Reversal of Norwegian Air Foreign Carrier Permit

(BRK.A), (BRK.B)

The Southwest Airlines Pilots’ Association (SWAPA) in conjunction with the NetJets Association of Shared Aircraft Pilots (NJASAP) are urging President-elect Trump to reverse the decision to grant Norwegian Air International a foreign carrier permit.

The US Department of Transportation’s (DOT) recent decision came three years after NAI, an Irish subsidiary of Norwegian Air, first applied for a foreign air carrier permit in 2013.

According to the unions, the Obama administrations late-December decision to grant NAI a foreign carrier permit enables NAI to “execute on its flag of convenience (FOC) scheme.” The permit allows for Norwegian to establish an Irish subsidiary in order to take advantage of Ireland’s impotent labor, tax, and social laws.

“The Obama administration has tilted the field of play in favor of a foreign competitor and put thousands of good-paying, middle-class, U.S. aviation jobs at risk. It will be up to the Trump administration to save them,” said SWAPA Governmental Affairs Committee Chair Chip Hancock.

Captain Jon Weaks, SWAPA President, stated, “President-elect Trump was elected on a pro-American worker platform and has already delivered wins for several American companies. It is our sincere desire that the president-elect will right this wrong by repealing this detrimental ruling.”

The DOT has maintained that the United States and European Union’s bilateral agreements leave the agency no basis to reject the permit.

“Regardless of our appreciation of the public policy arguments raised by opponents, we have been advised that the law and our bilateral obligations leave us no avenue to reject this application,” noted the DOT in its final order.

© 2017 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 National indemnity

AIG Partners with Berkshire Hathaway’s National Indemnity on Reinsurance Agreement

(BRK.A), (BRK.B)

American International Group, Inc. (AIG) has entered into a binding term sheet for an adverse development reinsurance agreement, effective January 1, 2016, with National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway Inc.

The agreement covers 80% of substantially all of AIG’s U.S. Commercial long-tail exposures for accident years 2015 and prior, which includes the largest part of AIG’s U.S. casualty exposures during that period. AIG will retain sole authority to handle and resolve claims, and NICO has various access, association and consultation rights.

“This decisive step enables us to focus firmly on the future and build on the progress we’ve made in transforming AIG,” said Peter D. Hancock, AIG President and Chief Executive Officer. “The agreement supports our stated strategy and gives us additional risk capacity to serve our clients and return capital to shareholders.”

The consideration for this agreement is $9.8 billion payable in full by June 30, 2017, with interest at 4% per annum from January 1, 2016 to date of payment. The consideration paid to NICO will be placed into a collateral trust account as security for NICO’s claim payment obligations to the AIG operating subsidiaries, and Berkshire Hathaway will provide a parental guarantee to secure the obligations of NICO under the agreement.

NICO is assuming 80% of the net losses and net allocated loss adjustment expenses on the subject reserves in excess of the first $25 billion and NICO’s overall limit of liability under the agreement is $20 billion. This provides material protection to policyholders against adverse developments beyond current reserve levels.

AIG’s fourth quarter reserve review is being finalized and the results of this review will be included in the company’s year-end financial results. AIG currently expects a material prior year adverse development charge in the fourth quarter.

The agreement will be accounted for in the first quarter of 2017 as a retroactive reinsurance agreement. AIG will recognize a loss or a deferred gain at inception of the agreement equal to the difference between the consideration paid and the ceded reserves as of December 31, 2016. Had this agreement been entered into on January 1, 2016, AIG would have recognized a loss of approximately $2.9 billion, based on carried reserves of approximately $34 billion, net of discount at that time. This loss would be reduced by AIG’s expected reinsurance recoveries from NICO’s 80% share of any 2016 calendar year adverse prior year development covered by the contract. If that share exceeds $2.9 billion, then a deferred gain is established, which will be amortized into the income statement in line with expected cash reinsurance recoveries from NICO.

The closing of the transaction contemplated by this agreement is subject to receipt of any required regulatory approvals, execution of definitive transaction documentation and satisfaction of other conditions.

© 2017 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

BYD to Bring Pure Electric Buses to Argentina

(BRK.A), (BRK.B)

China’s BYD Company has been officially selected as the recommended company by the evaluation committee in Argentina for the purchase of 50 electric buses on behalf of the Ministry of Environment.

The tender was launched by the Ministry of Environment as a pilot project for the introduction of electric public transport in different cities throughout the country.

The bid evaluation committee chose BYD amongst a pool of 5 bidders for its successful 12-meter electric bus, which is already widely used in cities such as London, Los Angeles, and Amsterdam.

BYD begun the promotion of its technologies in Argentina in 2011 through its local subsidiary, especially those related to electric vehicles and public transport. In November 2011, the company signed its first MOU with the Ministry of Industry and the Secretary of Transport.

During BYD’s senior-level management visit to the country in May 2016, Argentinian President Mauricio Macri and Minister of Environment Sergio Bergman expressed their high expectations for the introduction of BYD technologies and electric vehicle models to their nation’s public transportation systems.

BYD expects to receive the necessary allocation within the next few weeks.
To better satisfy market demands, BYD plans to build a new local manufacturing plant in Argentina. This plant would bring foreign investment to Argentina, and will have a significant impact in the creation of new jobs.

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 is now worth roughly $1.77 billion.

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

© 2017 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
Acquisitions HomeServices of America

Berkshire’s HomeServices of America Acquires Houlihan Lawrence

(BRK.A), (BRK.B)

In a major acquisition, HomeServices of America, Inc., a Berkshire Hathaway company, has added over a thousand sales associates in the New York Area. HomeServices has acquired Houlihan Lawrence, one of the leading real estate firms serving New York City’s northern suburbs.

Financial terms of the transaction were not disclosed.

Headquartered in the northern suburbs of New York City, Houlihan Lawrence serves the Westchester, Fairfield, Putnam, Dutchess, Orange and Ulster counties of New York and Connecticut with 1,300 sales associates operating in 30 sales offices. In 2016, Houlihan Lawrence closed $6.7 billion of sales volume.

Established in 1888, Houlihan Lawrence has been known to generations of buyers and sellers for its leadership in luxury representation and local expertise delivered by a team of knowledgeable agents coupled with the firm’s renowned advanced technologies and data driven insights. Nancy Seaman will step aside as chairman while her brothers Stephen Meyers, president and CEO, and Chris Meyers, managing principal, will continue to lead the firm’s strategic growth initiatives and manage day-to-day operations together with their sales management teams. Houlihan Lawrence, like other locally-branded brokerage companies under the HomeServices umbrella, will retain its name.

“We are joining an organization known for its strength and stability,” said Stephen Meyers. “Our partnership secures the future of the firm without changing the exceptional culture that is core to our storied brand. We are thrilled with this announcement and the many benefits it brings to our clients and agents.”

“When you combine the incredible strength of our people and the remarkable history of our success with the unsurpassed financial stability of HomeServices, there is no limit to what we can accomplish,” added Chris Meyers.

“Nancy, Stephen and Chris, together with their team of sales managers and agents, have built an extraordinary organization and exemplify a level of expertise and leadership that is second-to-none in the real estate business today,” said Ron Peltier, chairman and CEO, HomeServices. “Their culture of integrity and innovation closely aligns with our corporate vision and our emphasis on customer value and results.”

With this transaction, HomeServices has nearly 29,500 real estate professionals operating in nearly 570 offices across 28 states. In 2016, the company’s associates facilitated more than $93 billion in residential real estate sales.

© 2017 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.