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Minority Stock Positions Stock Portfolio

BYD Sells 5 EV Buses to Las Cruces RoadRUNNER Transit

(BRK.A), (BRK.B)

Berkshire Hathaway-backed BYD has announced that the City of Las Cruces, New Mexico City Council approved the purchase of five K8M 35-foot battery-electric buses for its RoadRUNNER Transit fleet.

Under a five-year contract to be awarded to BYD, the city will buy five K8Ms and has an option to purchase seven additional buses. The five buses, which will be made in the United States, are expected to arrive in New Mexico’s second largest city in fall 2022 and could be in service before Christmas next year. They will replace older carbon-fuel buses.

“As part of its sustainability initiatives, the Las Cruces City Council is committed to making the city a model of sustainable practices which includes converting City fleet vehicles to electric vehicles,” said Mike Bartholomew, the city’s Transit Administrator. “We are very excited about the opportunity to start the process of moving to a fully electric fleet in the city’s RoadRUNNER Transit service.”

The American-made K8M, a state-of-the-art transit bus, can seat up to 33 passengers. Highly reliable and safe, the K8M battery electric bus comes equipped with up to 435kWh LFP battery and can be fully charged within 3 hours.

The K8M set a high scoring record in the Federal Transit Administration Model Bus Testing Program in Altoona, Pa., earning high marks in structural durability, reliability, maintainability, and safety.

“BYD buses, known around the country for their style, safety and innovation, are a perfect fit for Las Cruces,” said Patrick Duan, BYD North America Senior Vice President. “We see a great and expanding market for our brand in New Mexico and know that residents and riders will appreciate this clean, quiet and efficient addition to the city’s fleet.”

The Las Cruces announcement comes on the heels of New Mexico officials picking BYD to participate in a statewide purchase agreement that gives transit agencies throughout the Land of Enchantment and the United States the ability to buy American-made BYD coaches and buses.

The vehicles, which comply with strict Buy America standards, are manufactured in ISO 9001-certified American factory, guaranteeing quality, safety, and efficiency in every aspect of design, production, and customer care.

Buses included in the agreement are the 30-foot K7M, the 35-foot K8M, the 40-foot K9M, and the 60-foot K11M. Motor coaches included in the agreement are the 23-foot C6M, 40-foot C9M, and 45-foot C10M.

About BYD

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares for $232 million. It’s an investment that has paid off handsomely. Berkshire’s original investment of $232 million had grown in value to $5.897 billion as of December 31, 2020.

© 2021 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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Lessons From Warren Buffett

Lessons From Warren Buffett: Warren Buffett Disagrees With Beta as a Measurement of Risk

Beta, the measurement of a stock’s volatility, is not a measurement of riskiness, according to Warren Buffett. Although many investors are taught that high beta stocks have more potential for gain but also a higher risk of loss due to their volatility, Buffett disagrees.

“It became very fashionable in the academic world, and then that spilled over into the financial markets, to define risk in terms of volatility, of which beta became a measure, but that is no measure of risk to us,” Warren Buffett said at the 1994 Berkshire Hathaway Annual Meeting. “Interesting thing is that using conventional measures of risk, something whose return varies from year to year between plus-20 percent and plus-80 percent is riskier, as defined, than something whose return is 5 percent a year every year. We just think the financial world has gone haywire in terms of measures of risk.”

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.

Categories
Acquisitions Kraft Heinz

Kraft Heinz Completes Purchase of Assan Foods, Expanding Presence in Key Growth Markets

(BRK.A), (BRK.B)

The Kraft Heinz Company has announced it has completed the purchase of Assan Foods from privately held Turkish conglomerate Kibar Holding. The proposed deal was first announced on June 11, 2021.

Assan Foods, headquartered in Istanbul, is a rapidly growing sauces-focused business with local manufacturing facilities in Balikesir and Izmir, Turkey. Assan Foods has been a certified Kraft Heinz production partner since 2019 and offers Kraft Heinz the opportunity to further build its retail and foodservice businesses across Europe, the Middle East, and Africa.

“Assan Foods makes high-quality sauces and tomato products that we believe fit perfectly into our International Zone’s growth strategy focused on Taste Elevation, and expands our presence in a part of the world that holds tremendous long-term opportunity for our company and our brands,” said Rafa Oliveira, International Zone President at Kraft Heinz. “We’re excited to officially welcome Assan Foods employees to the Kraft Heinz table.”

Assan Foods was established in Balikesir in 1998 as a Kibar Holding investment in the food sector and evolved into one of the top producers in the region. Assan Foods manufactures and sells a wide range of products, including tomato paste, ketchup, mayonnaise, and pasta and meat sauces that appeal to a variety of international cuisines. Its products are sold under brands such as Colorado, Kingtom, and Oba, as well as private label.

© 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.

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Forest River

Forest River to Triple Its Canadian Sales of Electric Buses

(BRK.A), (BRK.B)

Berkshire Hathaway’s Forest River is experiencing strong demand in Canada for its new ZEV shuttle buses thanks to its recent strategic partnership with Lightning eMotors.

The company is projecting that it will triple its sales in the Canadian market.

Forest River is already selling 10,000 units per year in the Class 4 to 6 shuttle-bus space under its Starcraft, Glaval, and Champion brands. The co-produced Forest River/Lightning eMotors ZEV bus partnership aims to build up to 7,500 zero-emission shuttle buses over the next 4.5 years.

Lightning eMotors is manufacturing the zero-emission-vehicle (“ZEV”) powertrain systems at their 231,000 square foot facility in Loveland, Colorado and shipping the powertrains to Forest River’s factory in Goshen, Indiana, for final assembly of the Class 4 and 5 all-electric passenger buses. Forest River is dedicating 100,000 square feet to install Lightning eMotors’ powertrains.

The vehicles that Forest River and Lightning eMotors will co-produce are Class 4 and 5 shuttle buses with gross vehicle weight ratings ranging from 14,500 to 19,500 pounds. The buses will feature battery configurations from 80kWh to more than 160kWh using industry-leading battery thermal management systems. These vehicles support ranges on a single charge between 80 and 160 miles and can recharge over a lunch break using Lightning eMotors’ DC fast charge infrastructure with integrated vehicle-to-grid (V2G) capabilities.

Available configurations will have between 12 and 33 passenger seats with ADA options available, and bus lengths of 20 to 34 feet. Other features include a modern digital-dash display, hill-hold functionality for safety, advanced telematics, analytics, and a mobile app for drivers and fleet managers.

Forest River’s 100-plus bus dealership locations throughout the U.S. and Canada will have the opportunity to sell and service these vehicles.

All vehicles will be compliant with the Federal Transit Administration’s “Buy America” and the Federal Aviation Administration’s “Buy American” guidelines. Under the guidelines, the federal share of eligible capital costs is 80 percent of the net capital project cost.

© 2021 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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Lessons From Warren Buffett

Lessons From Warren Buffett: Here Are Buffett’s Criteria for Buying a Stock

What are Warren Buffett’s criteria for buying a stock? They are very straightforward. They are all about understanding a company, projecting its future earnings, and evaluating the quality of a company’s management. As Buffett notes, “It is simple, but not easy.”

“The criteria for selecting a stock is really the criteria for looking at a business. We are looking for a business we can understand,” Warren Buffett said at the 1998 Berkshire Hathaway Annual Meeting. “That means they sell a product that we think we understand, and we understand the nature of the competition, what could go wrong with it over time. And then when we find that business we try to figure out whether the economics of it means the earning power over the next five, or ten, or fifteen years is likely to be good and getting better or poor and getting worse. But we try to evaluate that future stream. And then we try to decide whether we’re getting in with some people that we feel comfortable being in with. And then we try to decide what’s an appropriate price for what we’ve seen up to that point.”

Buffett’s full explanation of his criteria for buying a stock

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.

Categories
Acquisitions Pilot Flying J

Berkshire’s Pilot Corporation Acquisition Will Not Include Its Convenience Stores

(BRK.A), (BRK.B)

Berkshire Hathaway’s acquisition of the majority ownership of the Pilot Corporation, which is scheduled to be completed by 2024, will not include 40 of Pilot’s convenience stores. The stores have been sold to Casey’s General Stores, Inc. for $220 million in an all-cash transaction.

Pilot’s convenience stores are owned and operated independently from its travel center and energy businesses and were not included in the Berkshire Hathaway transaction.

In 2017, Berkshire took a 38.6% stake in Pilot, the largest operator of truck stops and rest stops in North America. The company has 750 locations under the Pilot and Flying J brands.

Berkshire is purchasing its equity position from the Haslam family, and Jimmy Haslam, the son of the company’s founder Jim Haslam, will remain in charge when the acquisition is completed. Pilot is currently ranked No. 10 on Forbes’ list of America’s Largest Private Companies.

The 40 Pilot stores will extend Casey’s presence in Tennessee and Kentucky with well-established locations primarily in the attractive Knoxville, Tennessee, market.

© 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.

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Minority Stock Positions Stock Portfolio

BYD and Vitol Sign $250 Million Joint Venture

(BRK.A), (BRK.B)

Vitol, a Bogotá, Colombia-based oil trader, and Berkshire Hathaway-backed BYD have formed a partnership to provide fleet mobility as a service in select markets worldwide. Together they will offer municipal, corporate and others a comprehensive solution including electric vehicles, charging infrastructure and depot design.

The partners have committed an initial $250 million to the initiative, targeted at organizations, private and public, looking to decarbonize their fleets through electrification. The organizations will benefit from access to capital and the partners’ expertise in installing and managing the required infrastructure, as well as the efficient management of power requirements.

Vitol is already in the process of deploying over 300 electric buses in Bogotá and is seeking additional opportunities in South America and further afield.

Andrew de Pass, Head of Renewables, Vitol Inc said: “We are excited by the potential and intend to grow our fleet tenfold in the coming years. Fleet owners are looking to minimize emissions and our proposition enables them to do so with minimal capital outlay and outsourced operational risk.”

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares for $232 million. It’s an investment that has paid off handsomely. Berkshire’s original investment of $232 million had grown in value to $5.897 billion as of December 31, 2020.

© 2021 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.

Categories
Lessons From Warren Buffett Value Investing Warren Buffett

Lessons From Warren Buffett: No Distinction Between Growth and Value

Should you be investing in growth stocks or value stocks is a common question. And TV pundits spend a lot of time discussing which category is outperforming the other. However, Warren Buffett dismisses such talk, as he doesn’t believe those categories are separable from each other.

“Well, the question about growth and value…they are not two distinct categories of business,” Warren Buffett said at the 2000 Berkshire Hathaway Annual Meeting. “If you knew what it was going to be able to disgorge in cash between now and Judgment Day, you could come to a precise figure as to what it is worth today. Now, elements of that can be the ability to use additional capital at good rates, and most growth companies that are characterized as growth companies have that as a characteristic. But there is no distinction in our minds between growth and value. Every business we look at as being a value proposition. The potential for growth and the likelihood of good economics being attached to that growth are part of the equation in evaluation. But they’re all value decisions. A company that pays no dividends growing a hundred percent a year, you know, is losing money. Now, that’s a value decision. You have to decide how much value you’re going to get.”

Buffett’s full explanation on growth and 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.

Categories
Acquisitions Kraft Heinz

Kraft Heinz Acquires Brazilian Condiments & Sauces Manufacturer

(BRK.A), (BRK.B)

The Kraft Heinz Company has entered into an agreement to acquire Companhia Hemmer Indústria e Comércio, a Brazilian company focused on condiments and sauces.

The acquisition of Hemmer – a 106-year-old company headquartered in Blumenau, Santa Catarina – is designed to expand consumers’ taste options in Brazil, while supporting Kraft Heinz’s strategy of growing its International Taste Elevation product platform and its presence in emerging markets.

“This acquisition offers us a valuable opportunity to accelerate our international growth strategy centered around Taste Elevation — our portfolio of high-quality products that enhance the taste of food,” said Rafael Oliveira, International Zone President at Kraft Heinz. “Hemmer is a legendary company in Brazil, growing net sales significantly, and will bring a delicious and diverse portfolio of products to Kraft Heinz.”

The combination aims to accelerate the growth of both companies, expanding Kraft Heinz’s presence in Brazil and leveraging its already successful expansion in condiments and sauces. Hemmer will benefit from Kraft Heinz’s distribution network and go-to-market model, including the growing foodservice channel in Brazil.

“In the last few years, Hemmer has been further strengthening itself as a food company synonymous with flavor, quality, and portfolio variety. We are extremely honored by this potential acquisition and the entire expansion potential this negotiation offers by continuing our family history in the region,” said Christian Luef, Hemmer CEO.

The completion of this transaction is subject to regulatory approvals by CADE (Brazil’s Administrative Council for Economic Defense).

The acquisition continues to expand Kraft Heinz’s focus on the international market. In June 2021, Kraft Heinz acquired Assan Foods, a rapidly growing sauces-focused business, from Turkish conglomerate Kibar Holding.

© 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.

Categories
Minority Stock Positions Stock Portfolio

Berkshire Hathaway-Backed BYD’s New E-Platform 3.0 Enables Ranges Exceeding 620 miles

(BRK.A), (BRK.B)

Berkshire Hathaway-backed BYD has officially launched the e-platform 3.0 for pure electric vehicles. With outstanding advantages in intelligence, efficiency, safety, and aesthetics, the e-platform 3.0 aims to promote new energy vehicle’s (NEVs’) performance in safety and low-temperature driving range as well as improving intelligent driving experiences.

The e-platform 3.0 will help BYD develop more efficient and safer new intelligent electric vehicles (EVs). The new-generation BYD e-platform covers vehicles of varying sizes and will be open to the industry to facilitate the development of intelligent EVs worldwide.

Built upon the e-platform 3.0, the unveiled Ocean-X concept is a mid-size sporty sedan with high performance. The Ocean-X brings brand new experiences in performance and intelligent driving thanks to the fully integrated blade batteries in the car body, an 8-in-1 electric powertrain, and an all-wheel-drive architecture.

Equipped with ultra-safe blade batteries integrated into the car body, the e-platform 3.0 builds up a special pure electric vehicle frame structure to increase the rigidity of the vehicle.

The new platform enables ranges exceeding 1,000 km (620 miles) through the world’s first 8-in-1 electric powertrain. In addition, the world’s first fast charging technology enables a range up to 150 km (93 miles) after a 5-minute charging. The original designed direct cooling and heating system for batteries increases the thermal efficiency by up to 20% while reducing energy loss. Additionally, the heat pump system which can work at temperatures from -30℃ to 60℃, has increased the range by up to 20% in winter, since the system leverages the residual heat from surroundings, the powertrain, passenger compartment and even the batteries. Finally, the brand-new electric AWD system features 0-100 km/h (62 mph) acceleration improved to 2.9 seconds, resulting in energy consumption compared to that of 2WD vehicles, while letting users enjoy the high performance of AWD EVs.

The e-platform 3.0 deeply integrated the drive, braking, and steering system. The industry’s first drive train domain controller has been developed through the full utilization of the electric motors’ fast response and has been applied on the model EA1. BYD’s smart cockpit domain controller and smart body domain controller are already in mass production. As for software, BYD has independently developed the BYD OS which decouples hardware and software, offering an elite collaboration system for high levels of intelligent driving.

On the side of aesthetics, the vehicle features shorter overhangs and a longer wheelbase, significantly expanding the passenger space; a lower body and a longer wheelbase liberate the vehicle’s aerodynamic design, decreasing the drag coefficient to 0.21Cd.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares for $232 million. It’s an investment that has paid off handsomely. Berkshire’s original investment of $232 million had grown in value to $5.897 billion as of December 31, 2020.

© 2021 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.