Category: Stock Portfolio

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Minority Stock Positions Stock Portfolio

Brazil Latest Country for BYD’s SkyRail

(BRK.A), (BRK.B)

BYD has signed an agreement to construct its SkyRail monorail in the Brazilian city of Salvador. the project will be the first of its kind for BYD in Latin America.

The 20 kilometers seaside route will be partially built above the sea to connect to an offshore island, with another portion traversing above a 19th century railway track that is set to be converted into a pedestrian zone.

Construction for the 2.5 billion Brazilian real (689 million US dollars) project will be divided into two phases, and is scheduled to begin in the fourth quarter of 2018 and be operational in 2021.

BYD’s monorail project will connect with the existing subway, providing seamless transportation for the city of 3.8 million residents.

“Air pollution and traffic congestion are the twin evils of urban living. The SkyRail will provide the residents of Salvador with a low-carbon and more convenient way of travelling,” said BYD senior vice president Stella Li. “This project is an important milestone in our global revolution. BYD is willing to work together with our partners to electrify transport and make it smarter.”

Among the features highlighted for SkyRail are its strong climbing capacity makes the vehicle capable of negotiating the difficult local terrain where a distance of 400 meters requires an increase of 80 meters. In addition, the SkyRail is quiet and carbon-free. Its elevated construction does not affect normal pedestrian and traffic flow, providing a non-disruptive addition to Salvador’s urban landscape.

The local government has plans to boost tourism in the area where the SkyRail will be constructed with the help of domestic companies.

SkyRail was first launched in October 2016 after five years of research and development worth 5 billion RMB. It is currently operational in the western Chinese city of Yinchuan. Outside of China, BYD has won strategic partnerships with countries such as the Philippines, Egypt, Morocco and Cambodia.

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 has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

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

2018 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.

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Minority Stock Positions Stock Portfolio Warren Buffett

Berkshire Finally Cashes Out of USG

(BRK.A), (BRK.B)

After 17 years riding USG’s stock up and down, Warren Buffett is finally going to cash out with a profit.

Gebr. Knauf KG and USG Corporation have entered into a definitive agreement pursuant to which Knauf will acquire all of the outstanding shares of USG in a transaction valued at approximately $7.0 billion.

Under the terms of the agreement, USG shareholders will receive $44.00 per share, which consists of $43.50 per share in cash payable upon closing of the transaction and a $0.50 per share special dividend that would be paid following shareholder approval of the transaction.

The price represents a premium of 31% to USG’s unaffected closing price of $33.51 and a 36% premium to the $32.36 average closing price for the preceding 12-month period, both as of March 23, 2018, and a multiple of approximately 11.6x USG’s adjusted EBITDA for the 12 months ended March 31, 2018.

The transaction was unanimously approved by USG’s Board of Directors.

Berkshire Hathaway has agreed to vote its shares in favor of the transaction. As of June 11, 2018, Berkshire Hathaway and its subsidiaries owns approximately 31% of the issued and outstanding shares of USG.

While Berkshire will exit its position with a profit, Warren Buffett had previously expressed his disappointment with the fortunes of the company.

“So just put that one down as not one of our brilliant ideas,” Buffett said. “Not a disaster,” he added.

© 2018 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.

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Minority Stock Positions Stock Portfolio

BYD’s Electric Buses No Longer a Rarity

(BRK.A), (BRK.B)

It wasn’t that long ago that the idea of an electric bus was a novelty. Questions about range, cold weather operation, and charging time still had to be answered.

Today, China’s BYD is the clear world leader in the electric bus market, with more than 35,000 of the company’s pure electric buses in service across the globe at the end of 2017.

The environmental benefits are already substantial and growing.

Worldwide, 279,000 barrels a day less of fossil fuel are consumed because of zero emission buses, according to Bloomberg New Energy Finance. They also note that in China 9,500 new electric buses are going into service every five weeks.

In the U.S., regional transportation systems are increasingly going electric, with BYD signing a contract at the end of May with the University of Georgia to provide 21 pure electric buses.

BYD has sold more than 700 battery-electric buses and trucks to customers in the U.S. and Canada, which is more than any other manufacturer.

Replacing smelly diesel buses is a priority for cities as studies have linked asthma and other lung ailments to diesel exhaust.

The Union for Concerned Scientists note that, “Diesel-powered vehicles and equipment account for nearly half of all nitrogen oxides (NOx) and more than two-thirds of all particulate matter (PM) emissions from US transportation sources.”

In addition to the important benefits in helping to create a cleaner environment, BYD’s growing impact as an employer is also drawing attention.

BYD’s Stella Li, president of BYD Motors, notes the company just received the inaugural Select LA Foreign Direct Investment Award, recognizing its impact on the regional economy and jobs in Southern California.

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 has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

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

© 2018 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 Debuts Short-Haul Truck at Port of Oakland

(BRK.A), (BRK.B)

BYD, the world’s largest electric vehicle company, has delivered the first battery-electric 8TT truck to the Port of Oakland.

The Class 8 truck was grant-funded by CARB and will be part of a three-year feasibility study to determine whether zero-emission trucks could replace diesel trucks.

The truck will be tested for short-haul operations by major California trucking operator, GSC Logistics, and used to shuttle cargo containers between their depot and Oakland marine terminals. As the largest motor carrier at the port, GSC hauls 120,000 containers of cargo across Northern California and Nevada annually. GSC manages 200 owner-operated trucks each day and currently operate five short-haul company trucks.

“BYD is proud to celebrate the deployment of our 8TT truck in partnership with CARB and GSC Logistics to prove that clean battery-electric transportation is reliable, sustainable and readily available for the drayage industry,” said BYD Motors President Stella Li.

By utilizing battery-electric trucks, companies like GSC can lower operating costs while significantly improving air quality through the elimination of pollution caused by diesel trucks. In addition to the cost savings andenvironmental and health benefits that come from converting to clean battery-electric technology, there are a number of other benefits such as reduced noise levels along busy trucking routes.

“We are eager to put this truck to the test and be part of an initiative that will not only help us save money, but positively impact the environment and change the future of transportation for years to come,” Said Brandon Taylor, Director of Transportation at GSC Logistics.

The Port of Oakland has already significantly reduced diesel pollution through clean truck programs. As they update their Maritime Air Quality Improvement Plan, zero-emissions technology will be emphasized.

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 has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

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

© 2018 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.

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Kraft Heinz Stock Portfolio

Kraft Heinz’s Springboard Unveils Its First Incubator Class of Disruptive Brands

(BRK.A), (BRK.B)

Kraft Heinz’s Springboard, a recently launched platform to nurture, scale, and accelerate growth of disruptive brands, announced its inaugural Incubator Program class.

The program was created to help nurture and develop the next generation of food & beverage brands, nurturing and being close to entrepreneurs, new ideas and consumer trends.

“Hundreds of applications were carefully reviewed to select authentic propositions and inspired founders within one of the four pillars shaping the future of food: Natural & Organic, Specialty & Craft, Health & Performance, and Experiential brands,” said Sergio Eleuterio, General Manager, Springboard Brands. “We are excited to kick off our program with a group of great founders, amazing and purposeful products, that we wholeheartedly believe will succeed in the marketplace.”

Over the course of the next 16 weeks, the selected startups will participate in a dynamic program composed of learning, funding, infrastructure access, and mentorship in Chicago, Illinois.

The inaugural Springboard brands are:

Ayoba-Yo introduces a high quality, nutritious, and delicious alternative to traditional beef jerky and meat sticks, known as Biltong & Droewors. Founders and South-African native brothers, Wian and Emile van Blommestein, introduced their 400-year-old family recipe to the market in 2017. Their 14-day air-drying process, combined with high quality meat cuts and spices deliver incredibly tender, savory, and sugar-free products with no shortage of flavor.

Cleveland Kraut is perfectly positioned to grow within the fermented foods market. A bold brand, grounded in and proud of its Cleveland heritage, dedicated to serving the great tasting healthy fermented foods at a fair price. The team is led by Drew Anderson who, along with his brother Mac and brother-in-law Luke, aim to be the kings of fermented foods by expanding from their kraut roots.

Kumana, best known for its signature Venezuelan-inspired Avocado Sauce, is a Los Angeles-based company creating original sauces representing the diverse and delicious flavors from different regions of the worlds. Venezuelan native, Francisco Pavan, and his partner Todd Vine channeled their passion for pure discovery into the core values of this brand.

Poppilu, a Chicago-based antioxidant lemonade brand, gives consumers permission to love lemonade again. Melanie Kahn, Poppilu’s founder, has developed a truly irresistible, mouth puckering, high-antioxidant citrus refreshment. It features Midwest-grown aronia berries, one of the highest antioxidant fruits in the world, and is one of the many reasons this brand will soar.

Quevos, believes the days of sinful snacking are over– it’s time to munch on snacks made from real food that taste great and are even greater for you. Quevos are salty and crunchy egg-white chips that are low in carbs and fat, and packed with protein. The disruptive brand was founded by young, ambitious University of Chicago students-Nick Hamburger and Zach Schreier.

© 2018 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 Build Hydrogen Buses for Hawaii

(BRK.A), (BRK.B)

BYD (Build Your Dreams), the largest electric bus manufacturer in North America and the largest electric vehicle company in the world, has teamed with US Hybrid Corporation, a 20 year industry leader, to develop a hydrogen fuel cell battery-electric bus. This bus, the first of its kind, will serve Honolulu’s Daniel K. Inouye International Airport, one of the busiest airports in the United States with more than 21 million passengers per year.

The new bus is being developed as part of Hawaii’s Clean Energy Initiative (HCEI) to meet sustainable energy objectives of decreasing dependency on imported oil and reducing greenhouse gas emissions. The initiative is a central component of the state’s goal to be powered 100% by renewable energy by 2045.

Robert’s Hawaii, the state’s largest employee-owned tour and transportation company, will serve as the bus operator, shuttling passengers between the airport’s terminal and car rental facility. The bus will utilize BYD’s battery-electric platform, integrating hydrogen fuel cell technology to eliminate operational dependency on charging.

“We are ecstatic to partner with US Hybrid. Together, we can bring innovative ideas to the state of Hawaii and deliver clean, renewable transportation solutions,” stated Macy Neshati, Senior Vice President of BYD Heavy Industries.

Hawaii is positioned as a global powerhouse for the advancement of hydrogen and other alternative fuels. The Federal Highway Administration has designated multiple alternative fuel corridors with electric vehicle chargers or hydrogen fuel stations. Additionally, as part of an agreement between the Air Force Research Laboratory and the Hawaii Center for Advanced Transportation Technologies, the U.S. Air Force has been demonstrating hydrogen as an alternative fuel at Joint Base Pearl Harbor-Hickam.

“With the state aggressively pursuing clean power, we have an ideal backdrop to showcase the most efficient zero emission technology in the industry. The fusion of US Hybrid’s fuel cell technology and BYD’s electric bus platform will shape the future of Hawaii and ultimately, change the world,” said US Hybrid founder, Dr. Abas Goodarzi, Ph.D., P.E.

The bus is manufactured in Lancaster, California and fuel cell made in South Windsor, Connecticut.

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 has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

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

© 2018 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.

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Charlie Munger Minority Stock Positions Stock Portfolio Warren Buffett

Commentary: Buffett Unlikely to Abandon BYD

(BRK.A), (BRK.B)

With Chinese new energy company BYD seeing a major slump in its share price, its important to remember that Warren Buffett’s belief in the company’s founder and CEO Wang Chuanfu makes it more likely that Buffett will buy more shares, or at least maintain Berkshire’s current position than abandon the investment.

BYD’s share price peaked at 83.70HKD in October 2017 and as of May 2 has slumped to 54.00HKD.

Berkshire’s still way ahead, as its cost basis per share was 8.00 HKD. Berkshire took its position in 2008 when it purchased 225 million shares at roughly 8.00KHD.

Whose idea was it to purchase a stake in the company? It wasn’t Buffett’s, but he has since become a big fan.

“Charlie (Munger) called me one day and says, ‘We’ve got to buy BYD. This guy that runs it is better than Thomas Edison,’ Warren Buffett explained while appearing on CNBC’s Squawk Box on Feb 26, 2018. “And I said, ‘That isn’t good enough.’ And then he called a little later and said, ‘He’s a combination of Edison and Bill Gates.’ And I said, ‘Well, you’re warming up but it still isn’t good enough.’ Anyway, Charlie wanted to do it. Now, it’s worked out so well that I’m actually starting to remember that it was my idea. As it’s coming back to me. I think I persuaded Charlie. But unfortunately I’m on the record that it’s his deal. But BYD, Charlie’s in love with the company, and it’s done very well. And the fellow that runs it, you know who’s autos and batteries, but he’s got big, big ideas and he’s very good at executing. So, but I leave it to Charlie.”

Stock prices go up and down, but Buffett has always been the most patient of investors.

With BYD having sold 13,000 of its plug-in electric cars in March alone, and aiming to sell between 15,000 and 20,000 cars per month when its new model year debuts, it continues to be the leader in EV cars.

The sales marked an increase of 116% year-over-year and were 31% of the total BYD car sales for the month.

BYD was number one worldwide in plug-in electric vehicle sales in 2017, its third consecutive year.

Additionally, its dominance in the Pure electric bus market continues to grow. The company sold over 14,000 pure electric buses globally in 2017.

It’s unlikely that Buffett’s or Munger’s respect for the company will change due to short-term price fluctuations and investors should be reminded that BYD’s stock price had a similar plunge in 2014 that saw no selling by Berkshire.

I’m not calling this one of Buffett’s forever stocks, but it would seem to fit one of his classic buy-and-hold investments, and it is unlikely to leave Berkshire’s portfolio anytime soon.

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

© 2018 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.

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Kraft Heinz Minority Stock Positions Stock Portfolio

Kraft Heinz Partners with the Food Network for Product Line

(BRK.A), (BRK.B)

Kraft Heinz has launched Food Network Kitchen Inspirations, a new line of globally inspired Salad Dressings, Cooking Sauces and Meal Kits.

Food Network Kitchen Inspirations is billed as the first-ever grocery product line from Food Network that allows fans to bring home the flavors of the Food Network.

Food Network Kitchen Inspirations gives people the tools they need to make dishes they’re proud of. Every product in the new line either inspires people to try global flavors at home with meal kits like Chicken Tikka Masala, or takes classics up a notch with an inspired take on Creamy Parmesan Caesar Dressing. Each category incorporates authentic flavors and is made with high-quality ingredients, free from artificial flavors, colors or dyes.

“At Kraft Heinz, we are known for our iconic brands that have been staples at dinner tables for decades. This opportunity is especially exciting for us because the new Food Network Kitchen Inspirations products make it easy for people to expand beyond their culinary comfort zones and try new flavors,” said Liz Rubin, senior associate brand manager for Meals at Kraft Heinz. “We are thrilled to partner with Food Network to help consumers spice up their meals and inspire them to get creative in their own kitchens.”

“Food Network has always been a source of culinary inspiration and education, but until now has never offered food products people can bring into their homes,” said Ron Feinbaum, senior vice president and general manager of home promotions and consumer products for Discovery, Inc., parent company of Food Network. “With busy schedules, we know that weeknights can be the hardest time to try new recipes, but with Food Network Kitchen Inspirations Salad Dressings, Cooking Sauces and Meal Kits, people can now make convenient meals without sacrificing flavor.”

“The inspiration for this new product line grew out of a successful marketing partnership we’ve had for many years with The Kraft Heinz Company,” added Karen Grinthal, senior vice president of national ad sales for Food Network. “Kraft Heinz is a key partner with Food Network, and we couldn’t be more pleased with this exciting evolution.”

© 2018 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’s China Vehicle Sales Top 13,000 in March

(BRK.A), (BRK.B)

While Tesla struggle to manufacture 2,000 Model 3 cars a month, Chinese new energy company BYD sold 13,000 of its plug-in electric cars in March.

The sales mark an increase of 116% year-over-year, and were 31% of the total BYD car sales for the month.

BYD is aiming to sell between 15,000 and 20,000 cars per month when its new model year debuts. The number is not unexpected, as the company sold 15,873 plug-in electric cars in December 2017.

BYD was number one worldwide in plug-in electric vehicle sales in 2017, its third consecutive year.

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 has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

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

© 2018 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 Separate Vehicle Manufacturing from Battery Biz

(BRK.A), (BRK.B)

In a move that is directly the opposite of Tesla’s acquisition of Solar City, Chinese new energy company BYD will reportedly spin-off its photovoltaic and rechargeable battery businesses into a separately traded public company.

Nissan made a similar move in the fall of 2017 when it sold its electric battery operations and production facilities to Chinese private investment fund GSR Capital.

BYD is currently one of the world’s top PV manufacturers, and produces from wafer to module with an automatic production line.

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 has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

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

© 2018 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.