Berkshire News Briefs - 8/6/14

The biggest news of the week was the quarterly earnings report, covered in my earlier post. So I'll skip over most of the earnings-related news here.

What Warren Buffett Will Do With $55 Billion in Cash (Fool)

Of course, a large chunk of the cash on hand at Berkshire Hathaway is likely earmarked for acquisitions, but the reinvestment efforts within Berkshire may end up being equally as important to the long-term success of the company. While it may grab less attention and be less fun than imagining Buffett's next huge buyout, reinvesting in a consistently profitable business appears to be exactly what is needed to sustain the company's impressive returns.

Why Buffett's Berkshire Hathaway Is Clearly a Buy (Barron's)

A flush Berkshire Hathaway is humming along as a patient Warren Buffett awaits an opportunity to deploy some of the company's huge cash hoard of $49 billion. Berkshire's class A shares are up 2.7% today, or just over $5,000, to $194,300, leaving them just shy of their record $194,670 set in May. [...] The shares, up 8% this year, still look appealing trading for about 1.35 times the company's June 30 book value of $142,483. [...] CEO Buffett's willingness to repurchase stock at 1.2 times book backed by Berkshire's cash-rich balance sheet may help keep a floor under the stock. That floor is now around $171,000 per class A share, but it typically rises every quarter as book grows.

Berkshire Hathaway Has Raised Its VeriSign Stake Yet Again (24/7 Wall St.)

VeriSign Inc. has had two key things going for it of late. Its directory listing dominance of the .com and other domain extensions has been a dominant part of its business. It has also been at the forefront of Internet security. Now a third issue has arisen — Warren Buffett and Berkshire Hathaway Inc. have increased their VeriSign stake yet again. An SEC filing from the weekend showed that Buffett, Berkshire Hathaway and its entities now control some 12,985,000 shares of common stock. This represents a 10.4% stake of the outstanding shares of VeriSign.

Brooks Sports Moves New Home Closer to Trails (New York Times)

In August, nearly 300 employees of the running shoe and apparel company Brooks Sports Inc. will head to work at the company’s new global headquarters, three miles north of downtown Seattle. Instead of nondescript buildings in an office park, they will cross the George Washington Memorial Bridge to encounter a sculpted troll underneath, a 16-foot statue of Vladimir Lenin, art walks and running trails. The neighborhood’s motto is De Libertas Quirkas, or freedom to be quirky. [...] “You can access some of the best running trails in the city from right here,” said Jim Weber, the chief executive of Brooks, pointing across the street to the Burke-Gilman Trail, a 27-mile thoroughfare for runners and cyclists. “The opportunity to be right here, so close to our customers, is amazing.”

Which utilities are doing the most in clean energy? (Portland Business Journal)

Berkshire Hathaway actually owns two of the top 6: NV Energy and PacifiCorp.

The top is utilities for renewable energy were NV Energy (21.08 percent), Xcel Energy (18.11 percent), PG&E (16.87 percent) Sempra Energy (16.86 percent), Edison International (16.67 percent) and PacifiCorp parent Berkshire Hathaway Energy (12.71 percent).

JM Re-Aligning Engineered Products Business to Drive Growth (MarketWatch / BusinessWire)

Johns Manville (JM) today announced they would merge their American, European and Asian activities for Engineered Products into one global business unit. JM’s Engineered Products business manufactures and markets premium-quality glass and polyester nonwoven products for the building and construction industry, filtration and battery separation media, reinforcement glass fibers for composites and specialty industrial glass products.

Study Accuses Moody's Of Ratings Bias Toward Corporate Owners (Forbes)

A new study concludes that Moody’s gave significantly higher ratings on bonds and derivatives issued by companies in the investment portfolios of its two largest shareholders, including Warren Buffett’s Berkshire Hathaway and took longer to downgrade them than its rival Standard & Poor’s.

Smarter Agent’s white-label real estate apps saw 4M+ downloads in 1 year (Technically Philly)

Smarter Agent, based in Collingswood, N.J., powers mobile apps for national real estate giants like Keller Williams, Sotheby’s and Berkshire Hathaway. The “white label” apps, which show homes for sale and rent and give you direct access to a realtor, have been downloaded more than four million times in the last year, said cofounder Brad Blumberg. [...] Its main competitors are online listings sites and mobile apps Zillow and Trulia, which recently became one company, when Zillow bought Trulia for $3.5 billion. Blumberg said that by covering 420 realtor markets around the country, Smarter Agent “exceeds the reach” of the newly merged company.

1 Thing Warren Buffett Wants You to Know About Berkshire Hathaway Inc. (Fool)

Buffett's second point was to highlight that Berkshire Hathaway also has a stable of noninsurance businesses, including Burlington Northern Santa Fe, Berkshire Hathaway Energy, Lubrizol, Marmon and many, many more. Even thought he mentioned the stocks first, those investment portfolio are clearly not his main focus [...] In fact, from 1990 to 2013, the per-share earnings from its noninsurance businesses have grown at an average annual rate of 21.5%, whereas its investments have grown at 13%. And as you can see, that staggering difference resulted in the earnings of the non-insurance businesses standing nearly 90 times higher today than in 1990, versus "just" a 16 times greater value in its investments.