Category: Minority Stock Positions

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Minority Stock Positions

Berkshire Hathaway-Backed Nubank Surpasses 100 Million Customers, Celebrates Record Growth

(BRK.A), (BRK.B)

Berkshire Hathaway-backed Nubank has reached a significant milestone, surpassing 100 million customers following a record-breaking first quarter in 2024. David Vélez, the founder and CEO, celebrated this achievement at the company’s headquarters in São Paulo, Brazil, on May 15.

Reflecting on the journey, Vélez remarked, “Seven years ago, the goal of 100 million customers seemed unattainable. Even one million or ten million seemed impossible. But here we are.”

Vélez attributed this success to Nubank’s commitment to addressing customer needs with innovative products and top-quality service. The company’s first-quarter results for 2024 showcased a revenue increase to $2.7 billion and a net income rise to $379 million, along with a 23% return on equity for Nu Holdings. Despite being over-capitalized and still in the early stages of profitability in Mexico and Colombia, these new markets are growing faster in customers, deposits, revenue, and credit card market share compared to Brazil at a similar stage.

Throughout the celebration, Vélez emphasized Nubank’s customer-centric culture. “By doing what is best for our customers, we are winning them over for decades. We focus on long-term value creation, not short-term gains. It’s an infinite game. Our strategy and culture evolve with our growing customer base,” he stated.

As of March 31, 2024, Berkshire Hathaway owned 107,118,784 shares of Nu Holdings, representing a 2.32 percent ownership stake in the company.

© 2024 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 a 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.

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Minority Stock Positions

Berkshire Hathaway Enters Strategic Agreement with DaVita to Maintain Ownership Balance

(BRK.A), (BRK.B)

Berkshire Hathaway has solidified its relationship with DaVita, a prominent global healthcare company specializing in kidney care. With Berkshire holding just under 40 percent ownership in DaVita, a strategic stock buyback agreement has been established to prevent Berkshire from attaining a majority stake in the company.

The Share Repurchase Agreement outlines the terms for maintaining ownership balance. Should Berkshire’s ownership reach at least 45.0% of DaVita’s common stock, the company will engage in quarterly repurchases to adjust Berkshire’s stake back to 45.0%. These repurchases will be executed at the volume-weighted average per share price paid by DaVita during the applicable period. Additionally, if Berkshire’s ownership surpasses 49.5%, immediate share repurchases will be triggered.

Furthermore, Berkshire has agreed to vote shares exceeding 40% in accordance with DaVita’s Board of Directors’ recommendations. This agreement supplements the existing standstill letter agreement between the two parties, ensuring alignment with DaVita’s governance structure.

DaVita’s presence extends across the United States and ten other countries, bolstering its stature in the healthcare sector. Berkshire’s substantial investment in DaVita, holding over 36 million shares as of December 31, 2023, underscores its confidence in the company’s growth prospects.

The investment has proven lucrative for Berkshire, as evidenced by DaVita’s recent stock surge to an all-time high. DaVita’s share buyback program has contributed to this success, allowing Berkshire to increase its stake without additional investment.

This strategic agreement highlights the collaborative approach between Berkshire Hathaway and DaVita, ensuring mutual benefit while maintaining a balanced ownership structure.

© 2024 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 a 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.

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Minority Stock Positions

A Berkshire Winner: DaVita Rockets to All-Time High!

(BRK.A), (BRK.B)

Berkshire Hathaway, the renowned investment conglomerate led by Warren Buffett, is often celebrated for its strategic investments in household names like Apple, Bank of America, American Express, and Coca-Cola. However, one lesser-known gem in its portfolio is its nearly 40 percent ownership stake in DaVita, a leading global healthcare company specializing in kidney care.

DaVita operates dialysis centers across the United States and in 10 other countries, solidifying its position as a key player in the healthcare industry. As of December 31, 2023, Berkshire Hathaway held a substantial 36,095,570 shares of DaVita, making it one of the company’s top domestic holdings.

The investment has proven highly lucrative for Berkshire Hathaway, with DaVita’s stock surging over 7 percent on March 5, 2024, reaching an all-time high of $134.65 per share. This remarkable performance has been driven in part by DaVita’s aggressive share buyback program, which has effectively increased Berkshire Hathaway’s stake in the company without requiring additional investment.

DaVita’s impressive financial performance further underscores its importance in Berkshire Hathaway’s investment strategy. With a one-year return of 67.89 percent and a five-year return of 169.57 percent, DaVita stands out as one of Berkshire’s top-performing investments.

In discussions about Berkshire Hathaway’s patient and strategic approach to investing, DaVita should not be overlooked. Its success highlights the value of thorough research and long-term investment strategies in achieving substantial returns in the ever-evolving landscape of the stock market.

© 2024 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 a 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.

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Minority Stock Positions

Berkshire-Backed Mitsubishi Corporation Launches Record Share Buyback Program

(BRK.A), (BRK.B)

Berkshire Hathaway-backed Mitsubishi Corporation, Japan’s largest trading company, has unveiled its largest-ever share buyback initiative, amounting to a staggering ¥500 million. This move, announced during its recent third quarter earnings call, underscores the company’s commitment to enhancing shareholder value and capitalizing on growth opportunities.

Mitsubishi shares hit a new all-time high on the news.

During the earnings call, Mitsubishi Corporation highlighted the availability of approximately ¥1 trillion in additional funds for both strategic investments and returns to shareholders within the current midterm plan. This substantial allocation signals the company’s proactive approach to leveraging its financial resources for sustained growth and profitability.

This announcement comes on the heels of Mitsubishi Corporation’s earlier buyback worth ¥100 billion in May 2023, which formed part of its fiscal year’s shareholder return strategy. Additionally, the company declared a 1-for-3 stock split and raised its dividend to ¥70 per share in November of the same year, further solidifying its commitment to rewarding shareholders.

Regarding future capital allocation and strategic mergers and acquisitions (M&A), a company spokesman hinted at significant endeavors, stating, “I cannot elaborate any further, but it’s going to be quite sizable.” This statement reflects Mitsubishi Corporation’s strategic vision and ambition in pursuing value-enhancing opportunities in the marketplace.

The interest in Japanese stocks among international investors received a significant boost in 2020 when Warren Buffett’s Berkshire Hathaway invested in Japan’s top five trading companies, including Mitsubishi, Mitsui, Sumitomo, Marubeni, and Itochu. This move not only underscored the attractiveness of Japanese equities but also spotlighted the potential for long-term growth and stability in the Japanese market.

© 2024 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 a 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.

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Minority Stock Positions

Berkshire Hathaway’s Paytm Investment Ends in a $140 Million Loss

(BRK.A), (BRK.B)

Berkshire Hathaway’s foray into India’s payment platform, Paytm, has concluded on a sour note, as the conglomerate exits its position with a substantial $140 million loss.

Back in 2018, Berkshire made a strategic investment by acquiring a stake in One97 Communications Ltd, the parent company of Paytm.

In a recent development, Berkshire opted to sell its stake for $164.7 million (13.71 billion rupees) through a bulk deal on Friday. Notably, this investment reflected a departure from the traditional investment strategies championed by Warren Buffett, who has historically been averse to technology stocks, save for his large position in Apple.

The Paytm investment was orchestrated by Berkshire portfolio manager Todd Combs, signaling a potential shift in the next generation of Berkshire’s investment management towards a more diverse approach.

Expressing optimism at the time of the investment, Combs stated, “I have been impressed by Paytm and am excited about being a part of its growth story, as it looks to transform payments and financial services in India.” Unfortunately, the anticipated success of the venture did not materialize as Paytm encountered hurdles early on.

In 2020, Paytm faced a setback when it was removed from Google’s Play Store for violating gambling policies. The Play Store’s prohibition on unregulated gambling apps, including online casinos facilitating sports betting in India, led to Paytm’s removal. The challenges persisted into 2021 when Paytm’s initial public offering (IPO) underperformed expectations.

During its stock market debut, Paytm’s share price plummeted by 26 percent, with intraday trading pushing the stock down as much as 28 percent from its issue price. This turn of events underscores the volatility and challenges present in the dynamic fintech landscape, demonstrating that even strategic investments made by established entities like Berkshire Hathaway can face unforeseen obstacles.

© 2023 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 a 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.

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Minority Stock Positions

Berkshire Hathaway Dives into Diageo: A New Addition to the Portfolio

(BRK.A) (BRK.B)

Berkshire Hathaway, the conglomerate led by Warren Buffett, has added Diageo plc to its ever-expanding portfolio. Diageo, a renowned liquor purveyor, boasts a vast array of over 200 brands, with a global presence in more than 180 countries.

In a recent filing with the U.S. Securities and Exchange Commission (SEC), Berkshire disclosed its acquisition of 227,750 shares of Diageo. This investment represents a relatively modest 0.04% ownership stake in the company, but it signifies Berkshire’s interest in the liquor giant.

Diageo, a name synonymous with top-quality beverages, offers a stellar lineup of best-selling brands, including the iconic Johnnie Walker Scotch whisky, Tanqueray gin, Smirnoff vodka, Guinness stout, and Baileys cream liqueur. These brands have long been favorites among consumers and have played a significant role in establishing Diageo as a leading player in the spirits industry.

Notably, Diageo has set ambitious goals for the future. Currently holding a 4.7% share of the global Total Beverage Alcohol (TBA) market, the company has its sights set on increasing that value share to an impressive 6% by the year 2030. This aspiration reflects Diageo’s commitment to growth and innovation within the dynamic world of beverages.

Moreover, Diageo recently announced a share buy-back program, demonstrating their dedication to creating value for their shareholders. This program aims to return up to $1.0 billion of capital to investors and is scheduled to be completed before June 26, 2024. The buy-back follows the successful completion of Diageo’s return of capital program during the second half of fiscal 2023, in which £0.5 billion of capital was returned to shareholders.

© 2023 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 a 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.

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Minority Stock Positions

BYD’s DOLPHIN Wins Carbuyer.co.uk Top Honour

China’s fast-growing EV maker BYD, backed by Berkshire Hathaway, has been named Carbuyer.co.uk Best Small Electric Car and Carbuyer.co.uk Car of the Year in the 2024 Carbuyer New Car Awards.

The Carbuyer judges said:

Best Small Electric Car: BYD DOLPHIN

“Compact on the outside, capacious on the inside, the BYD DOLPHIN is efficient, good to drive, loaded with tech and, with the bigger of the two batteries, comes with a sensible real-world range. It might not be pocket change, but the BYD DOLPHIN costs a good chunk less than its mainstream rivals.”

Carbuyer Car Of The Year: BYD DOLPHIN

“It really is quite extraordinary how a brand you’ve probably never heard of – albeit one that sells millions of cars in its home market – can so drastically undercut the competition and still offer such a compelling package. The BYD DOLPHIN isn’t a cheap car, it’s a great-value car. There’s a difference.”

© 2023 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and BYD, and this article is not a recommendation on whether to buy or sell a 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.

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Minority Stock Positions

Surprising Turn of Events: Berkshire Hathaway’s Top Performer in 2023 is a Digital Financial Platform

(BRK.A), (BRK.B)

Berkshire Hathaway, the renowned conglomerate helmed by legendary investor Warren Buffett, is not typically associated with high-tech investments. However, this year’s top-performing stock in Berkshire’s portfolio might raise a few eyebrows. It’s none other than NU Holdings, one of the world’s largest digital financial services platforms.

Based in São Paulo, Brazil, NU has rapidly risen to become one of the globe’s premier digital financial service providers. Remarkably, it ranks as the fifth-largest financial institution in Latin America, boasting an impressive number of customers. This unforeseen success in NU is a testament to the changing landscape of finance and technology’s growing role in the industry.

During the second quarter of 2023, NU experienced an impressive surge in its customer base. The platform added a staggering 4.6 million new customers, a testament to its widespread appeal and competitive offerings. In a year-over-year comparison, NU saw strong growth of 18.4 million customers, reaching an overall total of 83.7 million customers worldwide by June 30th, 2023. This surge represents a remarkable 28% growth when compared to the previous year.

What makes this story even more intriguing is Berkshire Hathaway’s substantial stake in NU. The conglomerate owns a substantial 107,118,784 shares of the company, valued at approximately $845 million. This strategic investment is a clear indicator of Berkshire’s confidence in the future of digital financial services.

NU Holdings’ place in Berkshire Hathaway’s portfolio emphasizes the changing dynamics of the financial sector. Traditional investment giants are recognizing the potential of innovative digital platforms, which have demonstrated tremendous growth and resilience in today’s fast-paced, technology-driven world. As the global economy continues to evolve, such investments may become an increasingly common occurrence, surprising investors and industry experts alike.

© 2023 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 a 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.

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Minority Stock Positions

Berkshire Boosts Stakes in Japanese Trading Houses

(BRK.A), (BRK.B)

Berkshire Hathaway’s subsidiary, National Indemnity Company, has announced an increase in its ownership stake in five prominent Japanese trading companies. The companies in question – Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo – hold significant positions in Japan’s economic landscape. Berkshire Hathaway’s investments in these companies are currently the only publicly traded holdings it possesses in Japan, and their combined value surpasses that of any other publicly traded stocks owned by the company outside of the United States.

Berkshire Hathaway’s ownership interest in each of the five companies now averages more than 8.5%, excluding treasury stock shares. This disclosure aligns with how Berkshire Hathaway reports its ownership in publicly traded U.S. companies. The conglomerate intends to maintain its Japanese investments for the long term. While the company might consider increasing its holdings in these companies, it has set a self-imposed limit of 9.9% ownership. Warren Buffett, the CEO of Berkshire Hathaway, has assured that any additional purchases beyond this threshold will only occur with the explicit approval of the investee’s board of directors.

Earlier this year, Mr. Buffett, accompanied by Gregory E. Abel, Berkshire’s Vice Chairman for Non-Insurance Operations, visited Japan to meet with the CEOs of the five companies. The discussions were fruitful, leaving both Mr. Buffett and Mr. Abel extremely pleased with the progress made. Their vision for the future may involve gradually increasing Berkshire Hathaway’s stake in each of these companies to 9.9% ownership, if prices warrant it.

Berkshire Hathaway continues to demonstrate its long-term commitment to the Japanese market and its confidence in the potential of these esteemed trading companies.

© 2023 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 a 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.

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Minority Stock Positions

No OXY Takeover in Berkshire’s Future, Says Buffett

(BRK.A), (BRK.B)

Rumors have been circulating that Berkshire Hathaway, the conglomerate headed by legendary investor Warren Buffett, is seeking to take over Occidental Petroleum. However, Buffett himself has dismissed these speculations, stating that his company is not looking to buy control of the oil producer.

At this year’s Berkshire annual meeting, Buffett made it clear that the rumors were unfounded. “There’s speculation about us buying control, we’re not going to buy control,” he said. “We wouldn’t know what to do with it.”

Despite this, Berkshire Hathaway has already purchased a significant stake in Occidental, after receiving regulatory approval to buy as much as 50% of the company. While Buffett has ruled out seeking control of the company, he has hinted that his company may add to their current 23.5% stake in the future.

In addition, Berkshire holds warrants that are exercisable for 83.9 million common shares for $5 billion. These warrants give the company the option to purchase more shares at a later date, potentially increasing their stake in Occidental even further.

“We may or may not own more in the future but we certainly have warrants on what we got on the original deal on a very substantial amount of stock around $59 a share, and warrants last a long time, and I’m glad we have them,” Buffett explained.

It’s worth noting that Buffett has a history of making strategic investments in companies without necessarily seeking control. His approach is to invest in strong companies with a long-term outlook, and then let their management teams run the business.

This seems to be the case with Occidental Petroleum. While Berkshire Hathaway has a significant stake in the company, they are not looking to take over or interfere with the management team’s decisions. Instead, they are content to hold on to their shares and potentially increase their stake in the future.

© 2023 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 a 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.