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Dairy Queen

Arkansas Dairy Queen Breaks One-Day Record

(BRK.A), (BRK.B)

“Everything old is new again,” goes the old saying. That’s definitely true for Dairy Queen, which is proving to be one of the hottest brands around.

A new Dairy Queen in Cabot, Arkansas has opened to DQ-record-breaking business. The store claims to have set a DQ record for the most transactions in one day and a worldwide DQ record for highest one-day sales, which included “outpacing all 7,000 DQ stores in the company’s 78-year history.”

DQ devotees began camping out on the restaurant patio at 7:30 p.m. of the previous day to earn one of 100 tickets for free Chicken Strip Baskets for one year with the purchase of a DQ cake on opening day.

Even before the July 13 opening, the central Arkansas store had been actively building its social media presence, encouraging DQ fans to sign up for text alerts and getting back an image for them to “post and tag” the new Cabot store.

For more information on Dairy Queen’s world-wide plans, read a Mazor’sEdge special report on Dairy Queen.

© 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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Nebraska Furniture Mart

Nebraska Furniture Mart to Move Des Moines Store to Larger Location

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Nebraska Furniture Mart will move its Des Moines, Iowa store.

The current 44,000-square-foot-store, which is actually in the town of Clive, will close and the furniture and appliance retailer will move to a site currently occupied by an empty former Dahl’s Food grocery store.

The new location is also in Clive, and will enable Nebraska Furniture Mart to feature more merchandise in the renovated 65,000-square-foot-building. The current location opened in 1993.

The new 65,000-square-foot location will still be small when compared to the company’s mega-store outside of Dallas, Texas, which clocks in at a massive 560,000-square-feet and is the largest store in the state.

Ryan Blumkin, vice president of Nebraska Furniture Mart, told the Des Moines Register that the new location will enable the retailer to increase its focus on retail customers. The Des Moines location has had a heavy emphasis on selling to contractors.

The opening is scheduled for spring 2019.

© 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 Pure Electric Buses Rolling on Martha’s Vineyard

(BRK.A), (BRK.B)

China’s BYD is the Vineyard Transit Authority’s (VTA) answer to soot emitting diesel buses on the island of Martha’s Vineyard off the coast of Massachusetts.

VTA is putting BYD battery-electric buses on the island’s routes right in time for the heart of tourist season.

BYD has delivered five buses and a sixth will be in service by the end of July.

The six-bus order includes four BYD K9S 35-foot models and two K7 30-foot models.

VTA’s plan to convert its entire fleet to pure electric. The VTA has announced it will purchase an additional four BYD buses.

“We are excited to begin transforming our fleet with these six BYD electric buses,” said Angie Grant, Administrator of Vineyard Transit Authority. “VTA is the first transit agency in Massachusetts to commit to going all-electric. This delivery is a milestone for both VTA and our state to begin the shift of electrification.”

According to VTA, it selected BYD for irs first set of electric buses based on BYD’s battery warranty, mile range and selection of sizes and models, which accommodate Martha’s Vineyard’s road network.

“We are thrilled to partner with VTA in helping to create a more sustainable world. Many agencies look to VTA for its industry-leading practices and consciousness. They service an area that is in high demand year after year and they set the bar for forward thinking,” stated Bobby Hill, senior vice president of BYD.

The proprietary BYD Iron-Phosphate batteries that power the K7 and K9S are manufactured in Lancaster, California.

The company’s revolutionary battery is nontoxic, 100% recyclable, fire-safe and incredibly long-cycled. BYD is the first and only electric bus manufacturer in the world to offer a 12-year warranty on its batteries.

The K7 electric bus has a capacity of 22 passengers, while the K9S features a capacity of up to 32 passengers, depending on the precise configuration. The new buses will produce no emissions, make oil changes a thing of the past and offer dramatically lower maintenance 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 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
HomeServices of America

ReeceNichols President Becomes CEO

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Mike Frazier, ReeceNichols president and chief financial officer, has assumed the role of chief executive officer and president. Linda Vaughan, former CEO, will serve as Chairman Emeritus through the remainder of 2018.

ReeceNichols is a wholly-owned subsidiary of Berkshire Hathaway’s HomeServices of America.

“Having worked closely with Mike over the last 11 years, I know he has the skill and drive to lead ReeceNichols to new levels of success,” Vaughan said. “He has a passion for our team, and I am excited to see the bright future that lies ahead for ReeceNichols under Mike’s leadership.”

Frazier joined ReeceNichols in 2007 as CFO and chief operating officer. In January 2018, he was named president of the organization. During Mike’s tenure, ReeceNichols has expanded geographically in Kansas City and southern Missouri and has grown in market share.

In 2017, ReeceNichols guided over 20,000 families and individuals through the home buying and selling process.

“Linda and I have worked together for many years, and her strategic insight and vision have been at the center of ReeceNichols’ continued success,” Frazier said. “I look forward to leading ReeceNichols to its next stage of growth and performance, supported by our talented agents and world-class management team.”

“Linda’s leadership helped guide ReeceNichols to become a leading real estate company. On behalf of HomeServices, we thank her for her many contributions, and we wish her well as she enters this new chapter of her life,” said Greg Mason, president, Midwest Region. “Mike brings exceptional leadership qualities to ReeceNichols and the HomeServices executive team, and we look forward to continuing to work with him in the months and years to come.”

© 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
Warren Buffett

Revised Berkshire Hathaway Stock Repurchase Program Makes Stock Buyback More Likely

(BRK.A), (BRK.B)

In a move that makes a Berkshire Hathaway stock buyback much more likely, the Board of Directors of Berkshire Hathaway has authorized an amendment to Berkshire’s share repurchase program.

The earlier share repurchase program provided that the price paid for repurchases would not exceed a 20% premium over the then-current book value of such shares.

Under the amendment adopted by the Board of Directors, share repurchases can be made at any time that both Warren Buffett, Berkshire’s Chairman and CEO, and Charlie Munger, a Berkshire Vice Chairman, believe that the repurchase price is below Berkshire’s intrinsic value, conservatively determined.

The current policy whereby share repurchases will not be made if they would reduce the value of Berkshire’s consolidated cash, cash equivalents and U.S. Treasury Bills holdings below $20 billion will continue. Berkshire will not initiate any share repurchases under the amended program until it publicly releases its second quarter earnings, currently scheduled after the close of the markets on Friday, August 3, 2018.

© 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
Warren Buffett

Buffett Converts Shares, Makes Multi-Billion Charitable Donations

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Warren Buffett is a generous guy. He’s made a massive fortune and now he’s giving much of it away. Buffett has converted 11,867 of his Class A shares into 17,800,500 Class B shares.

Of these Class B shares, 17,696,780 have been donated to five foundations: Bill & Melinda Gates Foundation, Susan Thompson Buffett Foundation, Sherwood Foundation, Howard G. Buffett Foundation and NoVo Foundation. These shares have a current value of $3.4 billion.

Buffett has never sold any shares of Berkshire. With the current gift, however, about 43% of his 2006 holdings have been given to the five foundations.

Their value at the time of the gifts, including the 2018 gift, totals about $31 billion.

Buffett is following his plan to have all of his Berkshire shares given to philanthropy through annual gifts that will be completed ten years after his estate is settled. In all cases, his A shares will first be converted into B shares immediately prior to the gift.

© 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
BNSF

Despite PTC Implementation, BNSF Files Extension

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BNSF Railway has announced that as of December 2017 it had fully installed and was operating under Positive Train Control (PTC) on all mandated subdivisions in advance of the December 31, 2018 deadline.

It has now announced that it nonetheless submitted a request to the Department of Transportation (DOT) for a two-year extension of the PTC deadline. The extension is required due to the Federal Railroad Administration’s (FRA) current interpretation of the law that full implementation status cannot be achieved until all non-BNSF trains and/or equipment operating on its PTC-equipped lines are also PTC-compliant.

“BNSF has succeeded in the adoption of this key safety technology. Even with this request for a deadline extension, BNSF’s PTC network is installed and we are currently running, and will continue to run, more than a thousand trains daily with PTC as we continue to refine the system and resolve technological challenges,” said Chris Matthews, BNSF assistant vice president, Network Control Systems.

As reported, BNSF completed the installation of all mandated PTC infrastructure at the end of 2017, including 88 required subdivisions covering more than 11,500 route miles on its network. However, to be considered fully implemented requires that all other railroads operating across any of BNSF’s PTC-equipped lines must be capable of operating with BNSF’s PTC system. This interoperability of PTC systems between Class I, commuter and short line rail carriers remains a challenge.

BNSF has successfully demonstrated interoperability with several railroads that operate on its network, including commuter railroads and Amtrak. However, not all railroads that operate on BNSF will have completed their PTC installation by the end of 2018.

© 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
Forest River

Forest River’s Booming Business Means 325 New Jobs in Elkhart, Indiana

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Forest River, Berkshire Hathaway’s RV manufacturer, is riding high these days. With business booming, it’s proposing spending roughly $6 million on real estate and create 325 new full-time jobs with annual salaries totaling approximately $16.9 million in Elkhart, Indiana.

The Elkhart County Council has approved a resolution for a 5-year tax phase-in agreement that would include Forest River’s guarantee of the 325 new full-time jobs.

Forest River has already begun construction on two buildings and is in the planning stage for two more.

Surprising analysts, millennials have embraced the RV lifestyle, which has helped spur robust annual growth averaging 15 percent the last few years.

Then again, perhaps it shouldn’t be such a surprise. With millennials touted as focused on experiences, the RV is the perfect vehicle to bring you to those experiences in comfort.

© 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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Lubrizol

Lubrizol Touts Breakthrough Material for Footwear Market

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The U.S. Department of the Interior reports that Americans throw away at least 300 million pairs of shoes each year. Unfortunately, the traditional rubber sole is not easily recyclable and need 30-40 years to breakdown in a landfill.

Berkshire Hathaway’s Lubrizol may have solved that problem with an innovative new material.

The company has debuted its new polymer-based material solutions for the footwear market, Estane TRX TPU and BounCell-X.

First displayed at Chinaplas 2018, the plastics and rubber trade fair in Shanghai,Estane TRX TPU is billed as an innovative rubber replacement for outdoor, athletic and work shoe outsoles. Outsoles made from Estane TRX TPU provide outstanding benefits for both consumers and footwear designers. Among its its features:

Automation
• Reduced labor costs via thermoplastic injection molding
• Automated production possibilities versus traditional rubber outsole molding

Sustainability
• Recycling* possibilities at outsole manufacturing and post with TPU (not available with thermoset rubbers)

Applications
• Exceptional slip resistance with wet ground conditions
• Excellent wear resistance against heat friction on the shoe outsole at room/high temperatures
• Transparent outsole allows color freedom for novel design
• Thinner TPU outsole improves flexible feeling and improves weight reduction

© 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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Berkadia

Berkadia Secures $47.675 Million in Acquisition Financing for 328-Unit Multifamily Community

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Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has arranged $47.675 million in acquisition financing for Veve at Castle Hill, a 328-unit multifamily community located in the Clermont submarket of Orlando.

Senior Managing Director Charles Foschini, Managing Director Christopher Apone and Senior Analyst Lourdes Carranza-Alvarez secured the loan on behalf of Advenir, a real estate investment and management firm based in Miami.

“The Orlando MSA has proven to be a well-established multifamily market for numerous reasons. With an economically diverse center for business, excellent location in central Florida and moderate cost of living, the area will continue to attract investment as strong market performance is expected despite rising interest rates,” said Foschini. “Orlando’s below state average unemployment rate and exponential growth trend create exceptional fundamentals for a flourishing multifamily market.”

Freddie Mac originated the 10.5-year loan with 10 years interest only. The LTV ratio was 70 percent.

Built in 2017, Veve at Castle Hill is located at 13600 Hartle Groves Place. One-, two-, and three-bedroom units feature faux wood plank flooring, raised panel interior doors with brushed nickel hardware, washer and dryer, chef-inspired kitchens, and high-end European-style vanity doors with brushed nickel hardware. Community amenities include a 4,200-square-foot swimming pool, sun deck with cabanas, fire pit, massage room, clubhouse and 24-hour fitness center.

Situated in the Clermont submarket of the Orlando MSA, Veve at Castle Hill is found near important transit routes and employment hubs. Florida’s Turnpike and West Colonial Drive are less than 10 minutes away, providing easy access to downtown Orlando and Orlando International Airport. Universal Orlando is less than 30 minutes away and Walt Disney World is under 40 minutes away from the community, offering close proximity to major economic drivers.

About Berkadia

Founded in 2009 as a 50/50 joint venture between Berkshire Hathaway and Leucadia National Corporation, Berkadia is a third-party commercial mortgage servicer, as well as an approved lender for Fannie Mae, Freddie Mac, and HUD/FHA.

The company is among the top Freddie Mac and Fannie Mae multifamily lenders.

Berkadia owes its origins to GMAC Commercial Mortgage Corporation, which was acquired in 2009 by Kohlberg Kravis Roberts & Co., Five Mile Capital Partners LLC, and Goldman Sachs Capital Partners. Christened Capmark Financial, the company had $10 billion of originations in 2008 and a servicing portfolio of more than $360 billion before running into bankruptcy in October 2009.

In a deal approved by the bankruptcy court, Capmark sold its mortgage loan and servicing to the newly formed Berkadia in a deal worth $515 million.

The deal brought Berkshire into the heart of the commercial loan serving business, and the company has one of the largest commercial real estate servicing portfolios.

© 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.