Month: September 2017

Categories
Minority Stock Positions Stock Portfolio

BYD to Supply Solar Modules for Power Stations in U.S.

(BRK.A), (BRK.B)

Chinese new energy technology company BYD continues to make inroads in the United States. The company has won a multi-million-dollar contract to supply 170-MW solar modules for PV power plant projects in the U.S

BYD will supply 170-MW solar modules to NextEra Energy, a US-based renewable energy project developer.

BYD completed several rounds of quality and performance tests to win the contract.
Speaking at the Solar Power International convention, Tom Zhao, Managing Director of BYD Solar Division, described how the development of BYD’s integrated PV and energy storage program, especially the commercial operation of the world’s first integrated PV and energy storage project in the UK, helped set the stage for the company’s recent breakthrough in the U.S.

“The U.K. project provided real proof that solar can provide power comparable with conventional energy sources,” Tom Zhao said. “BYD not only successfully enables the commercial operation of solar power we also are proactively exploring possibilities in wind power.”

Since its installation a year ago, BYD’s energy storage system powering the 60-MWh project in the UK has operated smoothly, responding quickly to the grid’s demand, matching over 99 percent of aggregate demand with five to six cycles every day. This frequency regulation project is the biggest of its kind in the U.K.

Tom Zhao added that BYD is also in discussions with several global new energy companies about introducing EV-charging infrastructure and other solutions to help create a zero-emission closed loop system, from power generation to energy storage for sustainable consumption.

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 $1.8 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

Travel Insurance Benefits from Recent Hurricanes

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While Hurricanes Harvey and Irma have damaged or slowed many businesses, one area that is seeing an increase in demand is travel insurance.

Berkshire Hathaway Travel Protection has seen a 35% increase in calls and 6% increase in visits to BHTP.com since August 25 – the day before Harvey made landfall,” said BHTP President Dean Sivley. “Hurricane season always heightens the interest in travel insurance because storms can unfortunately ruin vacations that have been planned for months.”

The terms of travel insurance vary, travelers with existing travel insurance policies may be covered for delays, cancellations and interruptions, which may also cover non-refundable trip payments for the following reasons:

• Inclement weather causing delay or cancellation of travel
• Named hurricane causing cancellation or interruption of travel
• Traveler’s destination made uninhabitable or inaccessible
• Traveler or travel companion must cancel because their primary residence is made uninhabitable or inaccessible.

Generally, once a storm is named, travelers can still purchase travel insurance for their trip, but they will not be eligible for coverage for losses caused by travel delays, cancellations or interruptions due to that storm. BHTP advises travelers to contact their travel insurance provider to confirm and understand the coverage purchased.

© 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
Dairy Queen

NFL Player’s Contract Dispute Gives Dairy Queen Unanticipated Publicity Windfall

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An NFL football player’s contract dispute has given an unanticipated publicity windfall to Berkshire Hathaway’s Dairy Queen.

Pittsburgh Steelers running back Le’Veon Bell, who had been in a contract dispute with the Steelers, submitted an application to work at Dairy Queen while trying to come to terms on a long-term contract with the Steelers.

On Tuesday, customers at the Dairy Queen in New Kensington, Pennsylvania discovered that Le’Veon Bell was taking their orders and serving fans, at least for the day.

Bell’s stint at the Dairy Queen came about after he tweeted a photo of himself filling out the application.

Dairy Queen tweeted back: “We’re always looking for top talent to join our team. Send us a DM and we’ll set up an interview.” Bell took Dairy Queen up on its offer, and fans of the Steelers and Dairy Queen were the beneficiaries.

In August, Bell resolved his contract dispute, which came during training camp, but he stepped behind the counter on his day off as part of his love for DQ.

© 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 Warren Buffett

Shareholders Put the Kibosh on Berkshire Hathaway’s Additional Home Capital Investment

(BRK.A), (BRK.B)

Berkshire Hathaway’s plan to make an additional investment in Canadian lender Home Capital Group in exchange for shares priced well-below the market price has been soundly rejected by Home Capital’s shareholders.

The investment would have increased Berkshire’s stake from 20% to 38.4% in exchange for shares priced at C$10.30 per share.

Home Capital’s Chairwoman Brenda Eprile announced the results of a special meeting of shareholders had 88.79% of the votes cast rejected the proposal with only 11.21% voting for it.

In June, Berkshire through its wholly-owned subsidiary, Columbia Insurance Company, made an initial investment of C$153,225,739 to acquire 16,044,580 common shares on a private placement basis, representing an approximate 19.99% equity stake in Home Capital on a post-issuance basis (25% on a pre-issuance basis).

The shareholders rejection does not effect a C$2 billion credit facility that Berkshire supplied to shore up the lender after a run on deposits in may left it on the verge of collapse.

© 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

HomeServices of America Acquires Largest Private Residential Real Estate Company in the United States

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Berkshire Hathaway’s HomeServices of America, Inc. has acquired The Long & Foster Companies, Inc., the largest private residential real estate company in the United States by sales volume.

The acquisition includes Long & Foster’s family of companies, including Long & Foster Real Estate and its market-leading affiliated business lines in mortgage, settlement services, insurance, and property management. Financial terms of the transaction were not disclosed.

In 2016, Long & Foster Real Estate had nearly $29 billion in sales volume and more than 81,000 home sale transactions; Prosperity Mortgage originated $3.3 billion in home loans, representing nearly 12,000 mortgages; Long & Foster’s settlement services companies closed over 20,000 title and escrow transactions; and Long & Foster Insurance issued approximately 8,300 property and casualty insurance policies.

Headquartered in Chantilly, Virginia, Long & Foster Real Estate is the largest independent residential real estate brand by volume and the second largest independent brand by units according to the 2017 REAL Trends 500 report.

The company has approximately 11,000 agents in over 230 offices serving buyers and sellers in major markets across the Mid-Atlantic and beyond, including Virginia, Maryland, the District of Columbia, West Virginia, North Carolina, Pennsylvania, Delaware, and New Jersey.

Founded in 1968 by Wes Foster and Henry Long, Long & Foster’s family of companies has grown to become one of the nation’s foremost real estate and financial services companies. The Long & Foster name is synonymous with providing clients the highest level of customer service, local expertise, and resources, all delivered by a team of knowledgeable agents using the firm’s renowned innovative technologies and data-driven insights.

Wes Foster will remain with the company as Chairman Emeritus. Jeff Detwiler, Long & Foster’s current president and chief operating officer, will assume the role of chief executive officer and, together with the existing team of enterprise and business line leaders, will oversee growth initiatives and continue to manage day-to-day operations.

© 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
Fruit of the Loom

Fruit of the Loom Donating 1 Million Piece of Clothing to Hurricane Harvey Victims

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Fruit of the Loom has joined the effort to aid the victims of Hurricane Harvey. The Berkshire Hathaway company is donating nearly 1 million pieces clothing.

The clothing helps people that lost their possessions in the hurricane, and is being to shipped to Houston from Fruit of the Loom distribution centers in Montgomery, Alabama, and Palmetto, South Carolina.

Fruit of the Loom has filled two semi-tractor trailers with clothing underwear, t-shirts, sweatshirts and sweatpants.

© 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
GEICO Insurance

Berkshire Hathaway Most Vulnerable Auto Insurer in Florida

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Berkshire Hathaway’s GEICO is the top auto insurer in Florida, and has the most at risk with Hurricane Irma possibly headed for landfall on the state’s east coast.

In 2016, GEICO had a 20.68% market share of all auto policies in Florida.

The Category 5 storm. which has been leaving a trail of destruction through the Caribbean, could hit Florida in the early morning hours of Sunday.

The magnitude of the hurricane has Florida Gov. Rick Scott warning that the damage could be greater than 1992’s Hurricane Andrew, which caused 65 fatalities and $26.5 billion in damage.

“I want everybody to understand the importance of this. This is bigger than Andrew,” Gov. Scott said.

GEICO will be sending its Catastrophe Response (CAT) teams to Florida. The CAT teams include auto damage adjusters, supervisors and managers, and IT personnel.

Last week, GEICO sent CAT teams to Houston in the wake deal with the estimated 50,000 vehicles the company insures that were damaged by Hurricane Harvey.

© 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 Warren Buffett

Stock Swap Gives Berkshire Dividend Increase from Bank of America

(BRK.A), (BRK.B)

An additional $8 million a year in income may not mean much in the scheme of things for Berkshire Hathaway, but it proves once again that Warren Buffett know how to make money, even as he struggles to find ways to spend Berkshire’s over $100 billion in surplus.

With an almost $12 billion paper profit from its conversion of its preferred Bank of America stock to common stock, Berkshire Hathaway is reaping the rewards from bailing out the bank in 2011 during the Great Recession.

The move was one of Buffett’s most astute moves of the past decade.

It’s always nice to triple your investment, especially when the preferred shares had also been earning Berkshire $300 million a year in dividends.

But wait, there’s more, as they say on TV infomercials

In swapping the Bank of America preferred stock for a $11.5 billion common stock profit, Berkshire had to give up the $300 million in annual dividends the preferred stock paid. However, Bank of America just raised its quarterly dividend so the amount that Berkshire now gets annually in dividends will be $308 million.

The 66% increase in the common stock dividend came after the Federal Reserve allowed Bank of America and 33 other large banks to increase their dividends and buy back more stock after passing the most recent stress test in June that was required under the Dodd-Frank Act.

Also benefitting Berkshire, which now owns 6% of Bank of America, is the bank’s decision to increase to $12 billion to its share repurchase authorization.

© 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
GEICO Insurance

GEICO CAT Teams on the Ground in Houston

(BRK.A), (BRK.B)

GEICO has sent its Catastrophe Response (CAT) teams to Houston to handle damage claims in the wake of the massive flooding caused by Hurricane Harvey.

The hurricane may be the most destructive hurricane in U.S. history due to the estimated 500,000-1,000,000 vehicles that were damaged. Initial estimates put the number of those vehicles that are insured by GEICO at around 50,000.

The CAT teams include auto damage adjusters, supervisors and managers, and IT personnel.

GEICO earlier installed express call lines for Hurricane Harvey claims and the company reports its claims teams are effectively answering the incoming calls.

© 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 Commercial SkyRail Monorail in Yinchuan, China

(BRK.A), (BRK.B)

Chinese new energy technology company BYD’s monorail transportation solution SkyRail has launched its first commercial line in Yinchuan, capital of Northwest China’s Ningxia Hui Autonomous Region.

The SkyRail line, housed under China Flower Expo Park in Yinchuan, officially goes into operation on September 1st.

BYD first unveiled its SkyRail electric monorail plans at the biannual C40 Mayors Summit in Mexico City in December 2016.

SkyRail, which is China’s first straddle-type monorail system, was developed out of BYD’s five-year RMB 5 billion R&D project. It is a sustainable and strategic solution to counter traffic congestion in cities around the world while also offering more convenient mobility to urban residents.

Han Jianglong, Vice Mayor of Yinchuan, highlighted the significance of Yinchuan being the first city in the world to launch the BYD SkyRail line, “it is a strategic move for Yinchuan to introduce the green, low-carbon SkyRail to promote innovation, sustainable development and industrial transformation, as well as the improvement of the city’s image.”

As a rail transit alternative with relatively smaller passenger capacity, BYD SkyRail delivers numerous benefits, including low capital cost, short construction period, low noise level and elevated views. It can complement existing public transport systems to create a layered transport system. At the same time, SkyRail provides urban residents with safe, comfortable and fast mobility while making a real difference to alleviate traffic congestion.

“Mass transit systems are an indispensable solution to alleviate traffic congestion in cities”, said BYD Chairman and President Wang Chuanfu at the launch ceremony. “Yinchuan is an important juncture of China’s ‘Belt and Road’ initiative. The launch of SkyRail in Yinchuan is setting a benchmark for SkyRail projects to come in other cities, and demonstrates how BYD’s innovative products can help alleviate traffic congestion in urban areas all over the world.”

Since the launch of SkyRail in October last year, BYD has conducted feasibility studies in more than 100 cities worldwide including the city of Iloilo in the Philippines, and has entered into strategic partnerships with over 10 cities in China, including Yinchuan, Guilin, Shantou, Guang’an and Bengbu. Construction of SkyRail lines are expected to begin in 20 Chinese cities in 2018.

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 $2 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..