Monthly Archives: July 2021

Berkshire Hathaway Subsidiary Buys Stake in Safe Marine Transfer

(BRK.A), (BRK.B)

Berkshire Hathaway’s LiquidPower Specialty Products Inc. has taken an equity interest in Safe Marine Transfer, LLC and has entered a strategic alliance to deliver LSPI’s market leading drag reducing agents (DRA) subsea via SMT’s patented all electric dual barrier subsea storage and delivery technologies.

Drag reducing agents (DRA), also known as flow improvers, are long-chain hydrocarbon polymers that act as turbulence inhibitors along the pipe wall to decrease the amount of energy lost in turbulent activity.

The introduction of DRA at the subsea well/drill center has the potential to significantly increase production in a cost-effective manner, by increasing flow rates in existing subsea production lines, subsea gathering lines, and subsea trunk lines. Marina Kaplan, LSPI’s Vice President of Strategy and Corporate Development, “SMT presents LSPI with a unique opportunity to leverage over four decades of pioneering technology, product development and global delivery to a completely new market where we have the potential to significantly increase subsea well tieback production.”

Additionally, SMT announced that Subsea 7 has taken minority equity interest in SMT and entered a Cooperation Agreement to assist in the delivery of SMT’s services and LSPI DRA on a global basis. Mr. Graeme Kinnell, Subsea 7 Board Observer, “Subsea 7 is pleased to be positioned to offer new and unique services to our subsea oil company clients via our relationship with SMT and LSPI. This investment helps support our vision to lead the way in the delivery of offshore projects and services for the energy industry.”

SMT’s CEO and co-founder Art J. Schroeder, Jr., “We are very pleased that these two world-class companies have chosen SMT as a partner to expand their range of products and services. LSPI, as a global leader in drag reduction technology, brings a proven value-add product. Subsea 7, with its global fleet of marine equipment, marine support, manufacturing, and assembly sites offers an established global delivery team. We look forward to jointly working with our subsea oil company customers to deliver additional value in their subsea tiebacks.”

LiquidPower Specialty Products Inc., a Berkshire Hathaway Company, is the global leader in the science and application of drag reduction, with over 40 years of experience. LSPI specializes in DRA technology by maximizing the flow potential of pipelines, increasing operational flexibility and throughput capacity. Through its partnership with SMT, LSPI will provide DRA for subsea application to significantly increase production by creating higher flow rates in existing subsea production lines, subsea gathering lines, and subsea trunk lines.

© 2021 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.

Berkshire Hathaway’s Clayton Homes Acquires Richmond, Virginia-Based Home Builder

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Berkshire Hathaway’s Clayton Homes has added to the rapidly growing number of site-built homes companies that it owns with the acquisition of Richmond, Virginia-based CraftMaster Homes.

On July 1, Clayton’s Clayton Properties Group used its South Carolina-based Mungo Homes to acquire CraftMaster Homes. CraftMaster Homes is Clayton’s first site-builder in Virginia.

The company is headed by Jeff Tunstall, who has been building homes in the Richmond-area for the past twenty years and will be staying with the company.

“We are thrilled to align CraftMaster Homes with a company who shares our values and drive to create an enjoyable customer experience,” Tunstall said. “This opportunity will allow us to grow our team and our footprint in the Richmond housing market. We take pride in the homes we build and the lives we touch, and we are excited to be able to reach even further with our partnership with Mungo Homes.”

“The partnership with Clayton has given us this opportunity to grow,” Steven Mungo, CEO of Mungo Homes notes. “The joining of CraftMaster Homes and Mungo Homes creates tremendous synergy and adds a strategic location to the Mungo footprint. We are excited to work together, to learn from one another, and to serve the housing needs of the Richmond area for years to come.”

Mungo Homes itself was acquired by Clayton Homes in 2018, and Clayton has been moving aggressively to add site-builders to its subsidiary Clayton Properties Group. CraftMaster Homes is its 13th acquisition since it began acquiring companies in 2015.

Acquired by Berkshire Hathaway in 2003 for $1.7 billion, Clayton Homes has grown into a diverse builder offering traditional site-built homes, modular homes, manufactured homes, tiny homes, college dormitories, military barracks and apartments.

© 2021 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.

NetJets Europe Begins Flying on Sustainable Aviation Fuel

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Berkshire Hathaway’s NetJets Europe is the first to purchase certified sustainable aviation fuel in Spain from Air bp, the international aviation fuel products and service supplier that is the aviation division of bp.

Spain is one of the largest global aviation markets.

The ISCC PLUS certified sustainable aviation fuel (SAF) was produced at AIR bp’s Castellon refinery and is available across the Air bp network in Spain.

The fuel is produced from waste based sustainable feedstocks procured by the refinery and co-processed with fossil fuel to create a synthetic low carbon fuel. SAF is certified using International Sustainability and Carbon Certification (ISCC) PLUS procedures. This is the first time that Air bp has sold SAF using the ISCC PLUS certified method.

The Co-processing is a key step in replacing fossil fuel with renewable feedstock within refineries and helping to advance the decarbonization of transport including aviation.

The ISCC PLUS certified SAF claims an attributed saving of around 80 percent carbon emissions over its lifecycle compared with conventional jet fuel it replaces.

Christian Luwisch, NetJets Europe, executive director, said, “We are proud to collaborate with Air bp to supply SAF for NetJets’ aircraft in Europe. This new partnership is an important next step in our ongoing commitment to reduce the environmental footprint of our company. Our Owners will now benefit from this supply of SAF which we expect to be in the region of 325,000 USG during the first 12 months.”

Martin Thomsen, CEO, Air bp, said, “We are excited to announce our first sale of SAF in Spain, which opens up new supply opportunities in an important aviation market. We are also delighted to have the support of our customer, NetJets Europe, which demonstrates their willingness to invest in SAF to help reduce carbon emissions. We hope this announcement will encourage more customers to purchase SAF in Spain. We believe SAF is one of the aviation industry’s key routes to reducing carbon emissions, and ISCC PLUS certified SAF is the first step towards developing new refining and commercial solutions, including those that achieve CORSIA certification, to keep decarbonizing our offers for our aviation customers.”

Air bp notes that it was involved in fueling the first SAF flight by an airline in February 2008 and since then has been enabling ground-breaking test flights and investing in sustainable alternative fuels. To date Air bp has supplied sustainable aviation fuel to over 20 airports.

© 2021 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.

Clayton Homes Acquires Alabama Site-Builder Legacy Homes

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Berkshire Hathaway’s Clayton Homes has once again expanded its footprint in the site-built homes market with the acquisition of a site-building company in Huntsville, Alabama.

In June, Clayton’s Goodall Homes, a major site-builder in Nashville, Tennessee, acquired Legacy Homes, the largest private homebuilder in the Huntsville market, including Huntsville, Athens, New Market, Meridianville, and Monrovia.

Legacy Homes is constructing over 400 homes in 2021, and has built over 1,500 homes since the company’s founding in 2013.

The addition of Legacy Homes will allow Goodall Homes to continue to expand its new home footprint in North Alabama.

The current Legacy Homes leadership team will retain their roles within the company, with Jeff Korotky continuing in the role of division president.

Combined, the four principals of Legacy Homes – Korotky, Mark Hunter, Shawn Fairburn and Dan Nash – have more than 100 years of experience in the home building industry.

“The Legacy Homes team is thrilled to be a part of the Goodall family and looks forward to continuing our commitment to excellence with a group that values culture, character and integrity, and makes customer experience a top priority,” Jeff Korotky said.

Legacy Homes is the twelfth site-builder that Clayton Homes has acquired since it first started adding site-builders in 2016.

Acquired by Berkshire Hathaway in 2003 for $1.7 billion, Clayton Homes has grown into a diverse builder offering traditional site-built homes, modular homes, manufactured homes, tiny homes, college dormitories, military barracks and apartments.

© 2021 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.

Lessons From Warren Buffett: Future Cash Flow Determines Intrinsic Value

Key to Warren Buffett’s efforts to find a company worth buying, whether it is the whole company, or just a minority stake, is his determination of the company’s intrinsic value. For Buffett, that intrinsic value is all about the future cash flow of the business. In his mind, those cash flows are like the interest paid on a bond, but unlike with bonds, the interest rate is not printed on a share of stock as it is with a bond.

“If we could see in looking at any business what its future cash inflows or outflows from the business to the owners, or from the owners, would be over the next, we’ll call it a hundred years, or until the business is extinct, and then could discount that back at the appropriate interest rate, which I’ll get to in a second, that would give us a number for intrinsic value,” Warren Buffett said at the 1997 Berkshire Hathaway Annual Meeting. “In other words, it would be like looking at a bond that had a whole bunch of coupons on it that was due in a hundred years. And if you could see what those coupons are, you can figure the value of that bond compared to government bonds, if you want to stick an appropriate risk rate in. Or, you can compare one government bond with 5 percent coupons to another government bond with 7 percent coupons. Each one of those bonds has a different value because they have different coupons printed on them. Businesses have coupons that are going to develop in the future too. The only problem is they aren’t printed on the instrument, and it’s up to the investor to try to estimate what those coupons are going to be over time.”

Buffett’s full explanation on determining intrinsic value

See the complete Lessons From Warren Buffett series

© 2021 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.

Berkshire Hathaway Sells Kirby Vacuum Business to Private Equity Firm

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Berkshire Hathaway has a reputation for holding on to its wholly-owned businesses through thick and thin, but that doesn’t necessarily mean that it never sells them. The Kirby Company, which has been making vacuum cleaners since 1906, and is famous for its door-to-door salesforce, has been sold to Chicago-based private equity firm Right Lane Capital.

Kirby has been a part of the Scott Fetzer Company since 1914, and Berkshire Hathaway became the owner of the famed vacuum cleaner maker in 1986 when it acquired Scott Fetzer for $400 million.

The Scott Fetzer Company has over diverse 26 brands that include the famed “As seen on TV” Ginsu Knife, World Book, the publisher of the World Book Encyclopedia, and a host of lesser-known brands such as Wayne, the dominant player in the water pump industry.

In addition to The Kirby Company, Right Lane Capital’s acquisitions have included Galvanic Applied Sciences, Pacific Press Technologies, Multipress, and Fenn-Torin.

© 2021 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.

Nebraska Furniture Mart Boosts Pay for Warehouse Workers

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With new employees hard to come by, and the need to retain current employees critical, Berkshire Hathaway’s Nebraska Furniture Mart is raising its pay for its warehouse workers.

Current warehouse workers at its Dallas-Ft. Worth location at The Colony will receive a pay raise of at least 9 percent, and new hires will be paid between $18.58 to $23.13 an hour, depending on experience and qualifications.

“Nebraska Furniture Mart’s goal is to be the employer of choice in each of our markets,” said Megan Berry Barlow, Human Resources Director, in a statement. “Our new higher wages will help us achieve this goal, along with a 7% annual raise potential, a great benefits package and a unique, fun work culture.”

© 2021 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.

Lubrizol’s Advanced Polymer Technology Provides Extended Life and Performance to Lithium-Ion Batteries

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Berkshire Hathaway’s Lubrizol Corporation has announced new Electro-Rite Polymer Technology for lithium-ion battery-cell construction to deliver new performance capabilities.

As global demands for energy storage continue to expand, lithium-ion battery systems must evolve. With a commitment to its new Electro-Rite Polymer Technology, Lubrizol is dedicated to innovating advanced binder and dispersant technologies for anode, cathode and separator components to improve energy density and extend battery life.

The technology includes polymers designed to improve performance of electrodes, separators, and electrolyte components. Specifically, Electro-Rite polymer technology can help enhance binder slurry formulation, aid in the formulation of advanced anodes and separators, and deliver new primer capabilities.

The company’s Electro-Rite® Technologies for Batteries are advanced material solutions for inside the battery, designed to improve performance of electrodes, separators, and electrolyte components. The Electro-Rite portfolio includes unique binder materials for anodes and separators for improving cell performance. The portfolio also includes dispersants and rheology modifiers that enhance dispersion, viscosity, flow properties and suspension of carbon, graphite, silicon, silicon oxide and ceramic active materials in aqueous slurries for optimal coating applications.

© 2021 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.

Lessons From Warren Buffett: You Have to Hit a Few Shots in the Woods from Time to Time

Investors can spend a lot of time rehashing the mistakes they’ve made, be it the money they have lost, or just from imagining the money they could have made if they had done something differently. However, Warren Buffett points out that “You know, if every shot you hit in golf was a hole-in-one…the game would soon lose interest. So you have to hit a few in the woods occasionally just to make it a little more interesting.”

Now, Buffett is not really preaching that you should go out and deliberately make mistakes, and he has tried hard to learn from his own, including the investments he didn’t make.

“Well, the mistakes we made, and we made them, some of them big time, are of two kinds. One is when we didn’t invest at all in something that we understood that was cheap, maybe because we weren’t even working hard enough at looking at the whole list, or because, for one reason or another, we just didn’t, we didn’t take action,” Warren Buffett said at the 2004 Berkshire Hathaway Annual Meeting. “And the second was starting in on something that could have been a very large investment and not maximizing it. Charlie (Munger) is a huge believer in the idea that you don’t sit around sucking your thumb when you can, when something comes along that should be done that you pour into it.”

Hear Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2021 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.

McLane Company Hiring Thousands

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With retail businesses showing robust numbers, Berkshire Hathaway’s McLane Company is looking for thousands of people for jobs as drivers or as warehouse teammates.

The company scheduled a National Hiring Day on July 16, and candidates can apply in person at any of McLane Company’s 70 distribution centers nationwide from 9 a.m. to 6 p.m.

Interested candidates have the opportunity to meet hiring managers, speak with teammates and receive on-the-spot offers. McLane has available roles for any qualified applicant 18 years or older, from students and military service members to retirees, including overnight and daytime jobs.

McLane’s record of people moving from entry-level all the way to the top includes the current CEO CEO and president Tony Frankenberger. More than 35 years ago, after serving in the United States Air Force, Frankenberger began his career as an hourly teammate washing and fueling trucks for McLane Company.

With 22,000 employees, McLane Company is one of the largest supply chain services leaders in the United States, providing grocery and foodservice solutions for convenience stores, mass merchants, drug stores, and chain restaurants.

Through McLane Grocery and McLane Foodservice, McLane operates over 80 distribution centers and one of the nation’s largest private fleets. The company buys, sells, and delivers more than 50,000 consumer products to nearly 110,000 locations across the U.S. Additionally, McLane provides alcoholic beverage distribution through its subsidiary, Empire Distributors, Inc.

© 2021 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.