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 - 8/12/14

3 Berkshire companies among national group's 'hot 100' retailers (Omaha World-Herald)

Yet three Berkshire Hathaway Inc. companies made the list of “hot 100” U.S. retailers, measured by increases in sales from 2012 to 2013, according to the National Retail Federation. And they didn’t add any stores or acquire competitors. The three:

• Helzberg’s Diamond Shops of North Kansas City, Missouri, No. 20 with a 15.7 percent increase in sales to $766 million at its 234 stores.
• Jordan’s Furniture, a five-store group from Taunton, Massachusetts, No. 24 with a 15.4 percent increase to $499 million.
• Nebraska Furniture Mart of Omaha, also with a 15.4 percent sales increase to $1.039 billion at its three stores.

Good 2Q for BNSF (Railway Age)

BNSF Railway, wholly owned by Omaha-based Berkshire Hathaway, Inc., has reported second-quarter net income of $916 million, up 4% from $884 million in the comparable quarter of 2013. [...] The Class I railroad noted coal volume rose 6% during the second quarter, while consumer product volume advanced 4% "primarily due to higher international intermodal traffic."

Buffett’s BNSF Losing Freight to Rival as Service Slows (Bloomberg)

BNSF Railway Co., the only U.S. railroad ordered by the regulator to provide weekly service updates, is losing market share to Union Pacific Corp., its main competitor, as train speeds slow and on-time deliveries drop. The shift in market share had shown up in carload statistics, Union Pacific Chief Executive Officer Jack Koraleski said today. During the second quarter, the Union Pacific’s loads rose 8.2 percent while those of BNSF, owned by Warren Buffett’s Berkshire Hathaway Inc., gained 4.9 percent. [...] Railroad service operations across the U.S. have suffered after harsh winter weather earlier this year coupled with a surge in cargo to create a freight knot that’s still being untangled. BNSF, based in Fort Worth, Texas, was affected most among U.S. rails because its network bore the brunt of a bumper grain crop and the exponential growth of crude oil from the Bakken oil fields in North Dakota.

Related:
Cold Train cites BNSF congestion, suspends service (Railway Age)
Big harvest adds to railroad woes (Farm & Ranch Guide)

Lubrizol Corp. buys medical extruder Vesta Inc. (Plastics News)

Lubrizol Corp. has ventured into the medical device market by acquiring Vesta Inc., a maker of catheters and tubing based on silicone and thermoplastics. [...] The 42-year-old firm has a long history of medical design engineering experience with clinical device applications in cardiology, urology, wound care and bariatrics, officials said. Vesta was acquired by RoundTable in 2007 and grew by acquiring thermoplastic medical tubing maker ExtruMed LLC in 2009 and silicone products maker SiMatrix in 2011. It has about 450 employees.

Buffett Stocks: Investing Essentials (Fool)

Generally speaking, there are about 50 companies held in the Berkshire Hathaway portfolio ranging from one position worth less than half a million at the time of writing, to the Wells Fargo holding which is worth a staggering $25.4 billion. Buffett has what he affectionately calls his "Big Four" -- which as you would suspect include Wells Fargo, American Express, Coca-Cola, and recently purchased IBM. At last count, they had a value of nearly $70 billion, which represented roughly 60% of the portfolio. And in total, the 15 biggest positions represented nearly 90% of what Berkshire Hathaway held. All of this is to say, the stocks Buffett really clings to are relatively small in number.

Warren Buffett's Secret Key to Building an Money-Making Empire (Fool)

At Berkshire it's not as simple as, "Well, who should become the chief executive?" You've got to think about that role, the role of the investment officer, the role of the Chairman of the Board of Directors, the role of the controlling shareholder; so it's a much more complicated question. It's not just a personality. It's institution and culture. [...] I did a shareholder survey -- that The Motley Fool helped me do, actually -- and elicited suggestions from shareholders about who they would like to see in an executive role with Berkshire after Warren, and I got a dozen names that were identified scores of times. That's testimony to the deep bench, so that's relatively easy. There's at least a dozen people who could step in and become Chief Executive Officer.