Month: March 2017

Categories
HomeServices of America

ReeceNichols Has Biggest Year in 16 Years

(BRK.A), (BRK.B)

Berkshire Hathaway’s Kansas City real estate company, ReeceNichols, achieved its most successful year in 16 years in 2016 and helped 20,278 Kansas City families buy and sell their homes.

The company is a wholly-owned subsidiary of Berkshire’s HomeServices of America, Inc.

The company has over 2,300 real estate sales professionals operating out of 18 offices throughout Kansas City and its surrounding counties — maintaining its position as the largest real estate company both in the metropolitan area and throughout Missouri and Kansas.

The ReeceNichols family of services enjoyed similarly excellent results. HomeServices Lending helped over 1,200 families purchase homes, and three of their lending officers ranked in the top 10 nationally for all of HomeServices Lending. In addition, Reece & Nichols Insurance provided peace of mind and security for 400 households, and Kansas City Title navigated over 8,000 people through the home closing process. The ReeceNichols Alliance offices — which span north to St. Joseph, Missouri; east to Columbia, Missouri; south to Ottawa, Kansas; and west to Junction City, Kansas — closed 4,205 transactions with over $656 million in residential sales volume.

“These records and achievements are a direct result of our outstanding sales professionals, who are deeply committed to serving Kansas City,” President & CEO Linda Vaughan said. “We do our best to equip them with the best technology and tools to serve their clients, but all 2,300 of our team members are responsible for creating those rewarding experiences to home buyers and sellers. Our family of services strive to work seamlessly with our branch offices to help our clients enjoy the smoothest home buying and selling experiences.”

© 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
Berkshire Hathaway Energy Commentary

Commentary: Not All Rotten Apples for Berkshire in Nevada

(BRK.A), (BRK.B)

There’s no doubt that the last few years have been a surprisingly rough time for Berkshire Hathaway’s NV Energy in Nevada.

One the one front, it has been in a battle with the roof-top solar industry over the hearts, minds, and wallets of retail customers.

On the other front has been the casino industry and its push for cheaper commercial power for its ubiquitous neon and blazing light bulbs.

Losing customers is not the path to grow a business, and when in October 2016 both MGM Resorts and Wynn Resorts paid tens of millions to exit the NV Energy power grid, it looked like the shiny red apple of NV Energy that Berkshire acquired for $5.6 billion in cash in 2013 might have a few worms in it.

So, it’s nice to get some good news that Berkshire has signed a major customer to a new solar power agreement. And that customer is a high-profile customer, Apple.

NV Energy and Apple reached an agreement in January to build 200 megawatts of additional solar energy in Nevada by early 2019.

The projects will support Apple’s renewable energy needs for its Reno data center.

NV Energy is filing an application with the Public Utilities Commission of Nevada (PUCN) to enter into a power purchase agreement (PPA) for the solar power plant. The project will bring NV Energy’s total to more than 529 megawatts of new solar resources in construction in Nevada or under review for approval.

This is in addition to the 491 megawatts of universal solar resources in Nevada currently serving NV Energy customers. Apple will also dedicate up to 5 megawatts of power to NV Energy’s future subscription solar program for residential and commercial customers.

“We are proud to play a role in helping Apple meet their energy needs with Nevada’s abundant solar resource,” said Paul Caudill, president and CEO of NV Energy. “In partnership with our customers, we continue to develop a more balanced fuel mix in a way that benefits the local economy by providing hundreds of jobs for Nevadans, particularly those in the International Brotherhood of Electrical Workers local 357 and 396, and advances the state’s policy goals.”

“Investing in innovative clean energy sources is vital to Apple’s commitment to reaching, and maintaining, 100 percent renewable energy across all our operations,” said Apple’s vice president for environment, policy and social initiatives Lisa Jackson. “Our partnership with NV Energy helps assure our customers their iMessages, FaceTime video chats and Siri inquiries are powered by clean energy, and supports efforts to offer the choice of green energy to Nevada residents and businesses.”

© 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

Berkshire Hathaway Acquires KITCO Fiber Optics

(BRK.A), (BRK.B)

Berkshire Hathaway has acquired KITCO Fiber Optics is a leading provider of fiber optic connectorization products and consulting services to the military and commercial communications industry.

Based in Virginia Beach, Virginia, the company specializes in the design and fabrication of fiber optic tools, tool kits and custom cable assemblies; producing private label kits for a number of major connector manufacturers and selling our own broad line of products; field services providing on-site termination, splicing, troubleshooting and testing support, and hands-on training and certification programs.

KITCO was founded in 1997 as a division of Norfolk Wire and Electronics.

The company grew quickly, and in 2002 and 2003 was recognized by the Fantastic 50 as one of the 50 fastest-growing firms in Virginia.

The company’s longtime chairman, W. Sheppard “Shep” Miller III, stepped down upon completion of the sale.

© 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 Unveils Largest E-taxi Fleet in South East Asia

(BRK.A), (BRK.B)

China’s BYD Company has introduced 100 electric taxis in Singapore, forming the biggest e-taxi fleet in South East Asia. The commercial introduction of the pure electric e6 cars also represents the largest investment of its kind by a Chinese electric car manufacturer.

This latest injection of electric taxis into Singapore’s transport network was launched amidst much fanfare from 300 attendees including the Secretary General of the National Trade Union Congress Chan Chun Sing, diplomats and various BYD representatives.

The expansion comes two years after BYD’s fleet of 30 e-taxis first hit the country’s roads in 2014, operated by HDT Holdings, the only e-taxi operator in Singapore, in partnership with the ride hailing company Grab. With the highly recognized customized service of the 30 e-taxi fleet, HDT Holdings got a special permission from the local government to run another 100 e-taxis and called up a tender for the fleet. BYD won this tender to provide the 100 e-taxis to HDT based on its global experience in the industry and the previous successful cooperation with them. “BYD’s electric cars have become our calling card,” said HDT Holdings General Manager James Ng.

Singapore has gradually adopted environmentally friendly policies over the years. The introduction of the 100 e6 taxis is estimated to save the island state around 46,400 tons of carbon emissions a year roughly equivalent to saving 26,000 trees.

“This is only the beginning, as there will be more BYD products and services for Singaporeans in the future,” said Liu Xueliang, General Manager of BYD Asia Pacific Auto Sales Division. “BYD will continue to support Singapore in its noble ambition for sustainable transportation.”

The BYD e6, an all-electric compact crossover/compact MPV, has zero emissions and offers a range of 400 kilometers. There are e6 taxi fleets in China, Colombia, Belgium, Netherlands, U.K., and the U.S.

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
Berkshire Hathaway Energy

Berkshire’s Energy Unit on the Uptake with use of Predictive Analytics

(BRK.A), (BRK.B)

There is no doubt that these days there’s power in big data. And for Berkshire Hathaway Energy there’s literally more power that can be derived at lower cost through the use of predictive analytics.

BHE has signed a deal with recent start-up Uptake Technologies to look for early sign that its wind turbines might be failing due to damage.

Founded by entrepreneur and investor Brad Keywell, Uptake is a predictive analytics SaaS platform that delivers solutions in major industries that increase productivity, reliability, and safety. Uptake’s platform aggregates enterprise and external data and applies cross-industry data science to produce high-value, actionable insights. Uptake’s platform is powered by a continuous feedback loop, recommending impactful actions that are then optimized by human intelligence.

Keywell is also the Managing Partner of Lightbank, a venture fund investing in disruptive technology businesses.

The Uptake agreement is only the latest move as Berkshire’s commitment to wind power has rapidly grown.

In April 2016, Berkshire Hathaway Energy announced plans for a $3.6 billion, 2,000 megawatt wind farm in Iowa known as Wind XI. The plant, which will feature 1,000 wind turbines, and will be owned by MidAmerican Energy Company, a unit of Berkshire Hathaway Energy.

When the wind farm is completed, MidAmerican will generate 85 percent of its energy in Iowa from wind.

“We have a dream to deliver 100 percent renewable energy to our customers,” MidAmerican CEO Bill Fehrman said during the announcement of the Iowa project.

© 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 Minority Stock Positions Stock Portfolio Warren Buffett

Commentary: Warren Buffett Keeps Getting Valentines from Phillips 66

(BRK.A), (BRK.B)

“How do I love thee? Let me count the ways,” wrote poet Elizabeth Barrett Browning. The same could be said by Warren Buffet when it comes to an energy sector company that is clearly dear to his heart.

If there is one company in the oil and gas sector that Warren Buffett especially loves, it is Houston-based Phillips 66, an energy manufacturing and logistics company with a portfolio of integrated businesses: Midstream, Chemicals, Refining, and Marketing and Specialties.

Back in early 2014, Berkshire swapped a large portion of its previous Phillips 66 position for the company’s chemical business unit, which was added to Berkshire’s specialty chemical maker Lubrizol.

“We were able to do that on a tax-advantage basis. We didn’t trade them because we didn’t like the stock,” Warren Buffett said at the time on CNBC’s Squawk Alley.

“I had always intended on coming back in, assuming that the price was right.”

By mid-2015, Buffett was back in and Berkshire revealed that it had accumulated 58 million shares of stock.

That position Has Only Grown

Buffett’s love of Phillips 66 has continued unabated, as he added to the position throughout 2016.

As of its last filing, Berkshire Hathaway now owns $6.4 billion of Phillips 66 stock, which works out to around 15.67% of the company. Berkshire is the largest institutional owner.

Why does Buffett love Phillips 66?

First of all, the company’s diversified businesses make it a leader in refining (it owns 13 refineries), marketing (it sells fuel In the U.S. under the Phillips 66, Conoco and 76 brands), and Midstream operations. Its Midstream operations gathers, processes, transports and markets natural gas, and transports, fractionates and markets natural gas liquids in the United States. Phillips 66 also manufactures and markets petrochemicals and plastics worldwide.

Phillips 66’s diversified businesses has given it relative stability in the face of recent slumps on crude oil prices, and the stock remained strong between 2014 and 2017.

With a current dividend yield of 3.22%, the stock has been pouring cash into Berkshire, much of it through positions held by its insurance company National Indemnity.

Rising Dividends

Buffett’s love of Phillips 66 is likely to continue. Back in 2015, the company’s dividend yielded between 1.9% and 2.7%. With most of the quarters paying dividends of 56 cents a share. Since May 2016, the dividends have moved up and it has paid 63 cents a quarter for the past four quarters.

A strong stock price and a fat dividend. What’s Warren Buffett not to love?

© 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 Launches Expanded Line-Up B-Box Battery Energy Storage Systems in Australia

(BRK.A), (BRK.B)

China’s BYD Company, the world’s largest supplier of rechargeable batteries, has launched its newly expanded line-up of B-Box Battery Energy Storage Systems in Australia, one of the world’s fastest growing residential energy storage markets.

The B-Box aims squarely at the same market as Tesla’s Powerwall.

BYD’s easy-to-install modular battery cabinets are available in a HV (high-voltage) model for both commercial and residential use, as well as in a LV (low-voltage) model for residential use. At the same time, BYD announces 4 authorized distributors for the B-Box sales in Australia, Sol Distribution Pty Ltd., RF Industries Pty Ltd., 360 Energy Pty Ltd and Solar Australia Pty Ltd.

The latest BYD storage systems are IP55 certified, meaning the storage systems are protected against the elements and hostile environments. They are based on the company’s proprietary Lithium Iron-Phosphate (LiFePO4) storage chemistry, which has an outstanding safety record and makes it the ideal technology for countries like Australia.

The B-Box HV Series employs a modular design with battery capacities ranging from 5.6 to 10.08 kWh, providing more than enough energy for the average household and can be scaled up to 50kWh for commercial and industrial applications. The B-Box LV Residential Series is available in four capacities ranging from 2.5 to 10.0 kWh and can be scaled up to 80kWh.

Together with the B-Box LV Professional Series currently on sale, BYD now has a complete energy storage product line-up in Australia.

BYD has chosen Australia to launch its expanded B-Box battery storage systems because the country is currently one of the most attractive markets for solar PV and storage deployment. A combination of the expiry of various state-based feed-in tariff schemes, high and rising electricity tariffs and plentiful sunshine make battery storage coupled with rooftop solar extremely attractive to households and businesses.

According to a 2016 report published by IHS, Energy Storage Intelligence Service, behind-the-meter storage installations are expected to double each year through 2018, with more than 30,000 Australian homes having solar and energy storage systems by 2018.

The BYD B-Box can help households and businesses to slash their electricity bills by storing the output of their rooftop solar panel systems for use in the evening, when household electric appliance demand tends to rise. The B-Box can minimize the amount of solar energy that is fed back to the grid, as well as the impact of costly electricity tariffs.

“The B-Box series offers a wide range of renewable power capabilities to meet light to heavy electrical load usage, off-grid or on-grid, single-phase or three-phase applications.” said Julia Chen, Global sales director, BYD Batteries. “Ideally, the B-Box can be integrated to a fully sustainable energy-independent enterprise or lifestyle, enabling its users to reduce reliance on electricity from fossil fuels, especially when combined with BYD’s solar power systems, thus drastically cutting energy costs.”

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
Insurance

General Star Offers Coverage for Food Delivery Businesses

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Ever wonder if your pizza delivery person could sink your company due to an accident? Well, worry no longer.

Berkshire Hathaway’s General Star Management Company has announced the launch of its Food Delivery Program effective March 1, 2017.

General Star’s Programs Unit will partner with AmWINS Program Underwriters, who will administer the program designed for hired and non-owned auto liability risks engaged in food delivery services.

The Food Delivery Program provides protection for hired and non-owned commercial auto liability risks. Businesses with twenty or fewer locations are eligible on a nationwide basis, with the exception of Louisiana.

“We are delighted to partner with AmWINS Program Underwriters. They have an enviable nationwide reputation as a skilled program administrator. We are pleased to respond to this need in the market,” said Tom Gersch, Vice President and General Star Programs Unit Manager.

General Star President and CEO Martin Hacala said, “We are pleased to expand General Star’s program offerings via this latest collaboration with AmWINS. The expertise of AmWINS and General Star provides a wonderful combination for success. I am confident the program will rapidly achieve its potential and provide long term value to our customers.”

he program will be written on a non-admitted basis by General Star Indemnity Company, which is rated A++ (Superior) by A.M. Best Company, and carries an AA+ Insurance Financial Strength Rating from Standard & Poor’s Corporation. General Star is a wholly-owned subsidiary of General Reinsurance Corporation, a member of the Berkshire Hathaway family of companies.

General Star Indemnity Company is an eligible surplus lines insurer in all states, the District of Columbia, Puerto Rico, and the Virgin Islands. It has the status as an unlicensed insurer in California and operates under NAIC Number 0031-37362. Insurance is placed with the General Star Indemnity Company by licensed producers and, for risks that qualify, by licensed surplus lines brokers.

© 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
Berkshire Hathaway Specialty Insurance Insurance

Berkshire Hathaway Specialty Insurance Rolls Out Accident & Health Insurance and Services in Asia

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance Company (BHSI) has introduced Group Personal Accident, Corporate Travel and Expatriate Medical Insurance in Singapore and Hong Kong.
The company also named Kok Leong Koo as Underwriting Manager, Accident & Health, based in Singapore, and Janus Law as Assistant Vice President, Accident & Health based in Hong Kong.

BHSI’s new Corporate Travel and Expatriate Medical Insurance products combine coverage with 24/7 access to BHSI’s Care and Concierge Services. These services include emergency medical, evacuation and repatriation assistance; medical referrals; assistance retrieving lost luggage; and worldwide Concierge support for events like last minute reservations to house sitting services. The company’s new Group Personal Accident Insurance also offers expansive coverage with the flexibility of numerous add-on benefits.

“We are pleased to launch our first Accident & Health solutions in Asia — backed by BHSI’s financial strength,” said Phillip Brain, Head of Accident & Health, BHSI in Asia. “The BHSI Care and Concierge Services embedded in our travel covers are indicative of the high level of service we plan to bring to this marketplace.”

These new A&H products are available in Singapore and Hong Kong and will launch in Macau in the coming weeks. In addition, BHSI continues to provide facultative reinsurance for Accident & Health exposures through its four offices in Asia, which are located in Singapore, Hong Kong, Macau and Malaysia.

Kok Leong comes to BHSI with more than a decade of experience in different underwriting and business development roles in the Singapore and Malaysia markets, which includes underwriting expertise in a Malaysian life operation. He holds a Bachelor of Science degree from the University of Malaya. Kok Leong is based in BHSI’s office in Singapore.

Janus has more than 10 years of experience in Accident & Health markets in Hong Kong and China, serving in various senior underwriting and management roles, including chief underwriting officer for Accident & Health products in Asia. Janus holds a Bachelor of Science degree from the University of Hong Kong and is a Fellow of the Life Management Institute. She is based in BHSI’s office in Hong Kong.

© 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 Reaches $1 million Settlement for Pollution of Washington’s Rivers

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Rather than wage a prolonged legal battle that could possibly end with it on the hook for massive damages, BNSF Railways has reached a settlement agreement with seven environmental groups that contend the railroad has polluted Washington’s rivers due to coal dust from its coal shipments.

BNSF has admitted no wrongdoing, but has agreed to pay $1 million in support of environmental clean-up projects in Bellingham, Puget Sound, the Columbia River and Spokane River.

The seven environmental groups, which included the Sierra Club and National Resources Defense Council, first sued BNSF in 2013, alleging that the freight railroad violated the federal Clean Water Act.

The settlement heads off lawsuits that alleged trillions of dollars of damages that came from the dust that blew off open-topped hopper cars.

The railroad has also agreed to study the use of physical covers for coal and petroleum coke trains in order to reduce or eliminate the source of the pollution.

“This puts them on a path to the ultimate solution to stop the discharge of coal into our nation’s waterways,” said Charlie Tebbutt, who is the lead attorney representing the environmental groups.

© 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.