Berkshire News Briefs - 1/22/16

Buffett's Mobile-Home Unit Should Be Probed, Lawmakers Say (Bloomberg)

U.S. lawmakers called for federal investigations into Clayton Homes, the mobile-home business at Warren Buffett’s Berkshire Hathaway Inc., after the Seattle Times and BuzzFeed News wrote that the company targeted minority borrowers and charged them higher interest rates on average than whites. [...]

Berkshire Hathaway's Clayton Homes Problem (Fool)

Clayton has always been an interesting case in the manufactured homes business because it has managed to survive and thrive while competitors have gone into bankruptcy. The three largest manufactured housing companies at the turn of the 21st century all went bankrupt in the decade that followed. [...]

Clayton Homes isn't exactly a needle-moving company for the Omaha-based conglomerate. Last year, Clayton generated $558 million in pre-tax profits, a mere fraction of Berkshire's pre-tax earnings of $28.1 billion for the full year. Clayton is a headline risk, and not much more.

Buffett's Berkshire Hathaway boosts stake in Phillips 66 (Houston Business Journal)

Warren Buffett’s Nebraska-based Berkshire Hathaway Inc. has upped its stake in Houston-based Phillips 66, even as oil prices keep hitting new lows.

The Associated Press reports that Berkshire recently bought an additional 759,295 shares of Phillips 66. That brings Berkshire’s stake to 62.3 million shares, or about 12 percent of the oil refiner's stock, according to the AP. [...]

Berkshire Hathaway: 3 Key Factors for 2016 (Fool)

Berkshire is large and diversified, but three components of the business really move the needle. The performance of its insurance units, the BNSF railroad, and the stock portfolio and put options overshadows virtually everything else.

With that in mind, here are a few particular issues underlying the three major drivers of Berkshire's bottom line. [...]

SolarCity cuts 550 jobs in Nevada after Buffett win (Salt Lake Tribune)

SolarCity Corp. plans to eliminate more than 550 jobs in Nevada, most of its employees in the state, after regulators approved new utility fees on solar rooftops. [...]

NV Energy, a unit of Warren Buffett's Berkshire Hathaway Inc. that owns Nevada's two biggest utilities, had sought the changes to recoup money that it says solar customers aren't paying for grid operations. The company's monthly fee for solar customers has jumped 40 percent to $17.90.

Green light for Walnut Ridge (reNews)

Illinois county officials have approved Berkshire Hathaway’s 215MW Walnut Ridge wind farm, overruling the local zoning board of appeals that had rejected the proposal. The Bureau County Board this week voted to grant conditional use permits for 118 turbines. Nine applications were denied because they were too close to two landing strips.

Walnut Ridge is owned by BHE Renewables, a wholly owned subsidiary of Iowa-based Berkshire Hathaway Energy. The project includes two substations. BHE plans to start construction this year and achieve commercial operation in 2017. [...]

5 Mind-Blowing Numbers From Warren Buffett’s Stock Portfolio (Fool)

$128 billion: This is the current market value of Berkshire Hathaway's holdings, assuming it didn't buy or sell a share of stock during the fourth quarter of 2015.

If Berkshire's stock portfolio were a stand-alone company, it would have the 37th largest market capitalization, sitting behind computer giant IBM and just before pharmaceutical company Allergan. [...]

Securities Trader to Forfeit More Than $11 Million for Role in Hacking Scheme (WSJ)

Following up on an older story from last summer...

A securities trader agreed to give up more than $11 million for his role in an international hacking scheme that authorities say netted the group millions of dollars by trading on confidential financial information. [...]

Hackers, the authorities said, targeted Marketwired LP, UBM PLC’s PR Newswire and Berkshire Hathaway Inc.’s Business Wire.

NetJets Announces Brand Partnership with Tennis Star & Olympian Maria Sharapova (BusinessWire)

NetJets® Inc., a Berkshire Hathaway company and the worldwide leader in private aviation, announced its newest brand partnership with tennis great Maria Sharapova. NetJets is the official private aviation partner for Ms. Sharapova.

In her role as a brand ambassador, Ms. Sharapova will work with NetJets’ marketing, with a particular focus on social media. She will also provide exclusive experiences for NetJets owners throughout the partnership. [...]

Berkshire News Briefs - 1/6/16

Report Finds Warren Buffett’s Modular Housing Company Ripped Off Minorities (Time)

Recently, the Seattle Times published a special report in conjunction with BuzzFeed News on the business practices of Clayton Homes, a massive modular housing company owned by Warren Buffett’s Berkshire Hathaway, the holding company that serves as a massive investment vehicle. The report does not paint a rosy picture of Clayton, which is the country’s largest homebuilder. [...]

The report found that Vanderbilt Mortgage, the lending arm of Clayton, lends with extremely high interest rates for minorities as opposed to their white counterparts. [...]

Berkshire Hathaway's Clayton Homes defends its loan practices involving minorities (Omaha World-Herald)

In response, Clayton said in a press release that the story’s allegations about loan rates are based on “raw data” that ignore factors including credit score, down payment, loan size, collateral and type of land.

Clayton said Vanderbilt’s average rate was the same for white and nonwhite borrowers with credit scores less than 600 who borrowed less than $50,000 to place a mobile home placed on private land. For borrowers with credit scores greater than 720, the average rate for nonwhite borrowers was 0.07 percentage points less than for white borrowers, Clayton said. [...]

Berkshire Hathaway Buys Newspaper in Fredericksburg, Virginia (Bloomberg)

Berkshire Hathaway Inc. purchased a Virginia newspaper and printing facility as the company run by billionaire Warren Buffett adds to its roster of publications.

The purchase includes The Free Lance-Star and Print Innovators, both located in Fredericksburg, Berkshire’s BH Media Group said Thursday in an e-mailed statement. Terms of the deal with Sandton Capital Partners, which acquired the assets in bankruptcy in June 2014, weren’t disclosed.

The Free Lance-Star has a daily circulation of 31,700, according to the statement. Print Innovators prints the newspaper and other publications in the region.

Berkshire Hathaway Fails Warren Buffett's Test -- Again (Fool)

Berkshire's underperformance this year is inopportune, as the Financial Times noted yesterday:

"The underperformance comes in Mr Buffett's Golden Anniversary year at the helm, when he told investors for the first time that they should judge his record based on Berkshire's share price, rather than just the book value of the company, which had been his preferred yardstick for decades."

BNSF Railway furloughs workers in Minnesota and North Dakota (Minneapolis/St. Paul Business Journal)

BNSF Railway Co. recently laid off railyard employees in Minnesota and North Dakota due to lower-than-expected demand for freight shipping, the Grand Forks Herald reported.

The job cuts — reportedly around 100 — were at the rail company's North Dakota rail yards in Grand Forks, Mandan and Minot, as well as the Minnesota yard in Dilworth.

EU clears Berkshire's acquisition of Precision Castparts (Reuters)

The European Commission said on Wednesday it had approved Berkshire Hathaway's planned $32.3 billion acquisition of Precision Castparts Corp, a maker of aerospace and other parts.

The Commission said in a statement it had concluded that the proposed acquisition would not raise competition concerns given the absence of horizontal overlaps and the limited vertical relationships between the activities of the two companies.

MidAmerican Energy adds 'green' trucks (Eastern Iowa Gazette)

The Des Moines-based utility’s new Green Fleet service trucks are equipped with a conventional engine and a large battery pack that operates the boom and other vehicle features. The dual system eliminates the need to have the engine idling at the job site, thereby saving fuel, reducing engine emissions and the need for engine maintenance, and minimizing job site noise. [...]

“By eliminating those four hours of idling every day, we will save four to eight gallons of gas per vehicle per day, which will add up to a significant reduction in emissions and significant fuel cost savings over the course of the year.”

How Venmo Plans to Make Money (Fortune)

MasterCard doesn’t offer a consumer P2P payment service, but it is selling the technology to businesses. It’s charging customers like Berkshire Hathaway and FreeShipping.com an undisclosed fee to add peer-to-peer payments to their own businesses. Berkshire Hathaway Travel Protection’s Dean Sivley says those fees cost the company less money than printing out and mailing checks or wiring money. The insurer developed a mobile app based on MasterCard’s tech to enable its policyholders to submit a claim and receive a decision and payment in minutes.

The Dairy Queen® System’s Epic Resolution (Business Wire)

The start of the New Year often comes with grand resolutions. But this year, Dairy Queen® restaurants [...] are kicking off the New Year with an epic resolution: beginning January 1, 2016, participating DQ® and DQ Grill & Chill® restaurants across the country vow to serve all Blizzard® Treats upside down or the next one is free. [...]