Berkshire News Briefs - 8/20/14

The biggest story of the week was Berkshire Hathaway's 2nd Quarter 13F filing, detailing the changes to the company's stock holdings for the period ending June 30. Here's a easy-to-read chart of the portfolio as it stands now.

This story has a run-down of all the changes in the largest holdings:

Tracking Warren Buffett's Berkshire Hathaway Portfolio - Q2 2014 Update (Seeking Alpha)

The only two entirely new positions this quarter were Now Inc. (DNOW), the National Oilwell Varco spin-off, and Charter Communications:

Warren Buffett buying into cable (RBR-TVBR)

Warren Buffet’s Berkshire Hathaway Inc. is again putting money on cable TV consolidation bets made by Liberty Media Corp. Chairman John Malone. The Oracle of Omaha’s investment company has taken a new, $366 million position in Charter Communications Inc., the Stamford, Connecticut-based cable TV company in which Malone’s Liberty Media is the largest shareholder.

A look at three portfolio moves in particular:

What’s Buffett Doing With His Money? (Wall St. Cheat Sheet)

First, Berkshire added about $340 million worth of IBM. This is not a huge transaction for Buffett, but he is adding this to an already substantial stake now valued at over $13 billion. [...] Second, Buffett has been buying Wal-Mart. While he only bought a small position in the second-quarter, I suspect that he has been buying more recently as the stock has been weak. [...] Finally, Buffett has been adding shares of Suncor — a Canadian oil company — while selling shares in ConocoPhillips and its recent spinoff Phillips 66. This is an interesting move and it probably reflects Suncor’s higher growth and the fact that Canada has a lower — 15 percent — corporate tax rate than we have in the U.S.

Berkshire Hathaway stock tops $200,000 (Yahoo/AP)

Berkshire Hathaway Class A stock, which first topped $1,000 in 1983, on Thursday surpassed $200,000. [...] The stock has had its ups and downs. The Class A shares first hit six figures in October 2006 and peaked at $151,650 in December 2007, when the Great Recession began. They fell as low as $70,050 in March 2009. On Thursday, they reached an all-time high of $202,454.99. Berkshire Hathaway has come a long way since Buffett's investment partnership started buying shares for $7 and $8 apiece in 1962. At that point, Berkshire was a New England textile company.

How Buffett Is Changing The Future Of Berkshire's Float - From Insurance To Uncle Sam (Seeking Alpha)

Insurance float is a concept that Warren Buffett has clearly explained as a source of enduring value for Berkshire Hathaway Inc. However, there are other sources of float that are becoming more important to Berkshire over time, but are not well understood by investors. Deferred tax liabilities (DTLs) are one area worthy of focus, and while I know that tax is boring, you will realize Buffett is truly a genius when it comes to float, so bear with me as I try my best to explain how it works, as it is complex. The first idea that might spring to mind for many people on deferred taxes is unrealised capital gains - to be clear, the focus of this article extends deeper than just this. Read on...

Berkshire Unit Said to Hires Two AIG Executives in Asia (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc. hired two Asia-based executives from American International Group Inc. as part of a push to expand its presence in the region, a person familiar with the matter said. Marc Breuil, AIG’s head of country operations in Hong Kong and Taiwan, and Marcus Portbury, the regional head of casualty insurance, are joining Omaha, Nebraska-based Berkshire’s specialty insurance business, said the person, who requested anonymity because there was no public announcement. Breuil will lead the company’s efforts across Asia and Portbury will be head of casualty in the region, according to the person.

Berkshire to pay U.S. civil fine for violating reporting rules (Yahoo / Reuters)

Warren Buffett's Berkshire Hathaway Inc has agreed to pay an $896,000 civil penalty to the U.S. government for having failed to timely report that it had boosted its voting stake in building products company USG Corp . [...] The government said Berkshire failed to made the necessary filing before swapping some USG convertible notes into common stock last Dec. 9. Berkshire made a corrective filing on Jan. 3, 2014, the complaint said.

Buffett Reveals Dow Chemical Position! (From 2009! It Was Old News!) (WSJ)

On a day when big hedge-fund managers were disclosing their latest positions, Warren Buffett’s Berkshire Hathaway Inc. alerted regulators Thursday to a big investment in Dow Chemical Co. It’s a position the company has held since 2009. The holding was hardly a secret: It was trumpeted by Dow at the time as one of the reasons it was able to complete a big acquisition, and Berkshire and Dow have discussed it in securities filings and public statements since. But Mr. Buffett’s firm, a sprawling conglomerate that famously employs just 25 people in its home office, admitted Thursday that a required “13G” form “was not timely filed” back when it should have been in 2009.

Vacant plant in Harrisburg has a new owner (KMTR 16)

The Monaco Coach plant has sat empty for months, but that will soon come to an end. According to Harrisburg [Oregon] City Administrator Brian Latta, RV maker Forest River Inc. has purchased the plant. Paul Eskritt with Forest River said the plant will start work in September with about 30 employees, most of whom they hope to hire locally. They plan to expand employment this winter with a second production line.

BNSF, CP improve rail service as harvest test nears (Journal of Commerce)

BNSF Railway and Canadian Pacific Railway say they are steadily reducing a backlog of grain shipments, but agricultural shippers warn the true test of whether they can handle the upcoming harvest will come quickly, in a week or two. Meanwhile, pressure from Washington, D.C., is mounting on the two railroads to make greater progress in reducing a backlog of shipments caused by the harsh 2013-2014 winter and a surge of freight. Following the U.S. Surface Transportation Board directing in late July that BNSF and CP post weekly updates on backlogged grain shipments, the U.S. regulatory agency said it will hold a public hearing on the issue in early September in Fargo, North Dakota.

Warren Buffett tips Heinz Australia into red (Australia Financial Review)

Warren Buffett, the second richest person in the United States, has inadvertently triggered a tumble into the red by the Australian operations of baked beans, baby food and soup maker Heinz. A heavy restructuring of the balance sheet at Heinz’s Australian operations and a recalibration of tax losses caused the Australian business known as Heinz Wattie’s to tumble to a loss of $12.3 million in its latest financial year.

Huge Geico Insurance Banner Falls on Fremont Home (NBC Bay Area)

One Bay Area couple can now say for certain their house is covered by insurance. A 4,000-square-foot Geico insurance banner being towed by a plane came loose and fell directly on their house Friday in Fremont.

Berkshire News Briefs - 2/28/14

Berkshire Seen Reporting Record Profit as U.S. Rebounds (Bloomberg) http://www.bloomberg.com/news/2014-02-27/berkshire-seen-repo...

If you're reading this after Saturday, note that this was a pre-earnings prediction...

Berkshire Hathaway Inc. will probably post record full-year profit showing how Chairman Warren Buffett’s five decades of acquisitions positioned his company to benefit from a rebounding U.S. economy. Net income was at least $18 billion in 2013, according to analysts at Nomura Holdings Inc. and Keefe Bruyette & Woods. That compares with $14.8 billion in 2012, the previous record. Omaha, Nebraska-based Berkshire said it will release its annual report March 1 at about 8 a.m. New York time.

Warren Buffett Just Bought Another Million Shares of This Company (Fool)

Twelve months ago, Berkshire held zero shares of Exxonmobil. Phillips 66 and ConocoPhillips -- at about $1.4 billion each -- were Berkshire's largest energy holdings. After last year's spending spree, ExxonMobil now stands as Berkshires sixth-largest stock position, in a statistical tie with long-held Procter and Gamble as 4% of Berkshire's stock portfolio. During the same period, Buffett largely sold out of ConocoPhillips, with Berkshire now holding 11 million shares versus more than 80 million held in 2008. Most of the remaining stake in Phillips 66 -- largely received when the company was spun out of ConocoPhillips in 2012 -- will also disappear from Berkshire's portfolio this year, when they're traded back to Phillips 66 in exchange for the company's flow enhancer business.

BNSF to move into tank car ownership with safer oil fleet (Reuters)

BNSF Railway Co plans to move into tank car ownership and buy its own fleet of up to 5,000 new crude oil tank cars with safety features that exceed the latest industry standards, the unit of investor Warren Buffett's Berkshire Hathaway Inc. said on Thursday. The unusual step by one of the largest U.S. railroads aims to reduce the risks of moving crude by rail after several recent accidents, including one involving a BNSF train in North Dakota in December.

Berkshire Investors Lacking Data Take Buffett on Faith (Bloomberg)

For years, chemical maker Lubrizol filed annual reports with securities regulators that ran 80 pages or more, detailing everything from its inventory to pension obligations. Today, investors would have to do math to figure out the company’s earnings in public filings. The difference is that Warren Buffett’s Berkshire Hathaway Inc. bought Lubrizol in 2011 for about $9 billion and now lumps together the results with those of several other manufacturing businesses. [...] The disclosure is “sufficient for his shareholder base at the moment,” said Jeff Matthews, a Berkshire investor and author of books about the company. “Once he’s gone, people are going to say, ‘What’s here? What do I really own?’”

Business Wire Halts Direct Feeds to High-Speed Traders (Bloomberg)

Business Wire, the distributor of press releases owned by Warren Buffett’s Berkshire Hathaway Inc., will stop letting high-speed trading firms purchase direct access to its service. After consulting with Buffett, a billionaire known for holding onto investments for decades, Business Wire decided to avoid the reputational hit from an association with high-frequency traders, who often enter and exit positions in less than a second.

Buffett Toy Bet Expands to Dentists With SmileMakers Deal (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc. agreed to buy SmileMakers from Staples Inc., adding a provider of toys to dentists, doctors and teachers. SmileMakers will be acquired by Omaha, Nebraska-based Berkshire’s Oriental Trading Co. unit, which sells party and craft supplies, the business said today in a statement. [...] Taylor said Spartanburg, South Carolina-based SmileMakers will offer products from Oriental Trading. The target firm is credited with creating the “treasure box” concept to reward children for enduring dental procedures, according to the statement, which didn’t disclose terms. Oriental Trading said the deal is expected to be completed by the middle of April.

Oriental Trading's offer for SmileMakers wins out in the end (Omaha World-Herald)

Same story, interesting take (as always) from the Omaha World-Herald...

When Staples Inc. put SmileMakers up for sale last October, Oriental Trading CEO Sam Taylor told The World-Herald, he put together a presentation, including a price range, for Oriental Trading Chairwoman Tracy Britt Cool to discuss with Buffett, CEO of Berkshire, Oriental Trading’s parent company. Buffett quickly OK’d a price toward the low end of the range, and Taylor made the offer, which has not been disclosed. The investment banker who was brokering the deal soon called to say that several private equity funds had bid significantly higher. Taylor’s group was out of the deal even before he got to meet SmileMakers’ managers. [...] But a few days after Thanksgiving, the banker called again. Seems some of the private equity investors had dropped out and the others had lowered their bids to Berkshire’s level or below. Was Oriental Trading still interested? “Absolutely,” Taylor told him, at the original Buffett-approved price.

Shaw departing area rug business (Home Accents Today)

Shaw Industries is exiting the area rug business, the company announced in early January. In conjunction with the announcement, the Dalton, Ga.-based company, which is wholly owned by Berkshire Hathaway Inc., revealed plans to convert its Ringgold, Ga., rug facility into a state-of-the-art luxury vinyl tile manufacturing facility. "The economics of the rug business today simply do not allow for future growth or encourage further investment," said Vance Bell, chairman and CEO in a statement. [...] Shaw plans to invest more than $100 million in its new luxury vinyl tile manufacturing facility and when complete, the investment is expected to generate 200 new jobs in the Ringgold area. This investment follows $250 million in other recent expansion announcements by Shaw in carpet tile, hardwood flooring, yarn extrusion, and distribution.

Heinz to close two plants (Just Food)

Heinz has announced plans to close two plants in Europe as the US food giant continues to restructure its business after last year's sale to 3G Capital and Berkshire Hathaway. The ketchup manufacturer has set out proposals to shut a factory in Turnhout in Belgium and a site in Seesen in Germany. [...] The company, which said the closures would lead to the loss of around 350 jobs, would "consolidate manufacturing and eliminate excess capacity".

Pampered Chef restructures, lays off workers (Daily Herald)

Addison [Illinois]-based The Pampered Chef, which sells kitchenware, said Monday it has laid off workers and restructured its office and distribution center. A spokeswoman at the company, owned by Warren Buffett’s Berkshire Hathaway Inc., did not provide layoff numbers or when the restructuring occurred. [...] It is one of the largest branded kitchenware companies and direct sellers of housewares nationwide, according to Omaha, Neb.-based Berkshire Hathaway, which acquired the company in 2002.

BofA Reaches Deal With Buffett on Preferred Stake (Bloomberg)

Bank of America Corp., the lender that turned to Warren Buffett in 2011 for a capital injection, reached a deal with the billionaire’s company to change terms so the investment is treated more favorably by regulators. The amendment would allow the bank to count preferred shares with a $2.9 billion carrying value as Tier 1 capital [...] The amendment would force Bank of America to wait at least five years from its approval to redeem the preferred stock. Under the 2011 deal, the bank was able to redeem the preferred stake at any time as long as it paid a 5 percent premium. Berkshire gets 6 percent annual interest on the securities. Under the revised deal, Buffett agreed to give up a dividend provision that gave him the right to recover missed payments.

RSA’s Hester Taps Buffett, Unveils Share Sale to Rebuild (Bloomberg)

After less than a month on the job, RSA Insurance Group Plc Chief Executive Officer Stephen Hester announced a stock sale and tapped Warren Buffett for reinsurance to help strengthen the insurer after its scandal in Ireland. [...] RSA also bought a 550 million-pound reinsurance policy from Buffett’s Berkshire Hathaway Inc. It’s now “very hard for them to downgrade us,” Hester said on a conference call today. [...] Buffett, 83, and his reinsurance chief Ajit Jain have assumed obligations from other insurers including CNA Financial Corp. and American International Group Inc. seeking to cut risk or narrow their focus. The contracts give Berkshire more funds to invest and make acquisitions.

Allstate Fights Back Against Geico With Esurance and Clever Marketing (The Street)

Allstate has seen customers come and go over the years to rivals like Geico, a unit of Berkshire Hathaway. Geico, known for its clever commercials, is now seeing competition for online customers from its competitor Allstate. [...] Geico has long been known for its catchphrase: "15 minutes could save you 15% or more on car insurance." This motto and an aggressive advertising campaign powered Geico to be one of the leaders in online care insurance. Berkshire Hathaway bought Geico in 1996 and has controlled it ever since. To compete in the same online market, Allstate decided to also go the acquisition route. In 2011, Allstate bought Esurance for $1 billion. The largest publicly traded U.S. home and auto insurer, Allstate is now using Esurance to take on Geico directly.

Berkshire Energy Briefs - 1/6/14

A short update on a few energy stories... much more coming tomorrow.

Train Carrying Oil in North Dakota Ablaze After Derailing (Bloomberg Businessweek)

Thousands of North Dakota residents were urged to flee possibly toxic fumes from a fire that engulfed BNSF Railway Co. railcars carrying crude oil after it collided with another train, causing a series of explosions. Two to three railcars were still burning and 1,500 residents living within a five-mile radius of Casselton, North Dakota, heeded warnings to evacuate [...] No injuries to the train crews were reported in the accident that occurred at 2:10 p.m. local time yesterday about 25 miles (40 kilometers) west of Fargo, Berkshire Hathaway Inc.’s BNSF said in a statement.

Berkshire acquiring Phillips 66 flow business (WSJ MarketWatch)

Berkshire Hathaway Inc. said late Monday it was acquiring the flow improver business of Phillips 66 in exchange for Phillips stock Berkshire already owns. Berkshire owns 27.2 million shares of Phillips, or 4.5% of outstanding shares [...] The unit, Phillips Specialty Products Inc., makes polymers designed to reduce drag and increase the flow potential in pipelines.

Buffett’s year-end bet: Pipelines (WSJ MarketWatch)

Oil production in North Dakota is a relatively new phenomenon made possible by fracking its vast oil-bearing shale formations. Because it’s new, there are few pipelines serving the region, which means about 90% of the state’s crude is being sent to refiners by rail. [...] Buffett’s BNSF doesn’t lose money hauling crude, but pipelines are a far more efficient and safer way to move crude to market. And every train wreck makes it a little easier to get the permits necessary to build the pipelines already proposed, especially to West Coast refineries that historically have had little access to crude from east of the Rockies.

Warren Buffett's $6 Billion Energy Bet (Fool)

Berkshire has more than $6 billion invested in National Oilwell Varco, ExxonMobil, Phillips 66, and ConocoPhillips. Grouped together, these holdings make up almost 8% of Berkshire's portfolio, and would be the fifth-largest single investment, trailing only the "big four" of Wells Fargo, Coca-Cola, IBM, and American Express. What can individual investors take away from this? Should you follow Buffett into oil and gas?

Berkshire News Briefs - 11/15/13

The big news of the week is the quarterly release of the 13F, showing the changes to Berkshire Hathaway's stock portfolio for the quarter that ended on September 30, so let's start with that.

Berkshire Hathaway Stock Holdings (Dataroma)

I always link to this site every quarter... it gives a great rundown of all the current holdings and highlights the changes.

Warren Buffett Makes Major Moves (Fool)

The latest SEC filing from Warren Buffett's Berkshire Hathaway listing the company's stock holdings at the end of the third quarter was released today, and the Oracle of Omaha has made some significant changes to his portfolio. [...]

1. Added a $3.5 billion position in ExxonMobil
2. Sold $500 million worth of ConocoPhillips
3. Unloaded 75% of the GlaxoSmithKline

Why Did Buffett Reduce ConocoPhillips Stake And Add Exxon Mobil? (Seeking Alpha)

Berkshire Hathaway's latest disclosure revealed the company sold 10.7 million shares of ConocoPhillips shares while buying 40 million shares of Exxon Mobil. At first blush, it is hard to understand Mr. Buffett's rationale. We'll look at several different reasons why Buffett may have made the move and try to figure out what he's thinking.

Berkshire Hathaway increases DaVita stake (NASDAQ)

This is notable because it happened just last week, after the reporting period for the 13F changes above.

Berkshire Hathaway, already a beneficial owner of shares of DaVita Healthcare Partners Inc., bought 3,700,294 shares of that company's common stock between Nov. 6 and Nov. 8. At prices ranging from $53.25 to $55.98 per share, Berkshire paid a total of $204,046,688 while increasing its stake in the company by 11.8%.

Berkshire Hathaway Specialty Insurance Adds Healthcare Risk Management (MarketWatch / BusinessWire)

Berkshire Hathaway Specialty Insurance today announced that it is expanding its healthcare professional liability capabilities to provide customers with highly customized risk management support. The company will now reimburse qualified healthcare professional liability insurance policyholders for the costs of pre-approved risk management services of their choice.

Warren Buffett’s 9/11 payday (NY Post)

Mayor Bloomberg has recruited fellow billionaire Warren Buffett to take over a taxpayer fund set up to pay claims stemming from the toxic Ground Zero cleanup, The Post has learned. A surprise plan under review would give $270 million in federal funds managed by the World Trade Center Captive Insurance Co. — a nonprofit entity controlled by Bloomberg appointees — to Buffett’s holding company, Berkshire Hathaway, which would convert the cash into a $600 million commercial-insurance policy. Buffett’s company would absorb the risk of new 9/11 litigation and health claims, though it’s unclear how much profit he stands to make on the deal. The city would receive no dividends, an official said.

Should You Buy Berkshire Hathaway Today? The Behavioral Finance View (Forbes)

Oceans of e-ink have been spilled analyzing the pros and cons of Berkshire Hathaway. Should you put a dime into this particular jukebox? I doubt whether anything new remains to be said on the fundamental or technical side. Instead, as a psychologist, I want to walk you through what Hegel, Husserl and Heidegger (or Moe, Larry and Curly) might call the phenomenolgy of buying Berkshire Hathaway.

Hunting for Warren Buffett's Next Elephant (Fool)

Warren Buffett is on the hunt again and this time he has even more cash to spend. Indeed, Berkshire Hathaway's cash pile has swelled to more than $40 billion and an elephant-sized acquisition had recently got away from him. While it's impossible to know what Buffett will acquire next for sure, we can compile a list of possible candidates based on previous acquisitions.

Prudential --> Berkshire Hathaway HomeServices

This week's "Former Prudential Office Joins Berkshire Hathaway HomeServices" stories came from Bucks County, PA, Philadelphia, PA, Lehigh Valley, PA, Boulder, CO, Seattle, WA, Des Moines, IA, Chicago, IL, Houston, TX, and all major cities in Ohio (Cleveland, Columbus, Dayton, and Cincinnati all had one Prudential mega-franchise).

And now, here it is, your moment of zen...

Glenn Close & Warren Buffett Sing 'The Glory Of Love' (YouTube)