Jan. 19, 2014, 2:48 AM
- Portfolios managed by Berkshire Hathaway (BRK.A) investment managers Todd Combs and Ted Weschler did better last year than Warren Buffett's and the S&P 500, the WSJ reports.
- That's the second consecutive year that both men, who were hired as part of Berkshire's succession plan, have beaten Buffett and the index.
- Combs and Weschler have begun 2014 with over $7B each to manage, up from $3B at the start of 2012.
- However, in 2013, Berkshire Hathaway fell short, for the first time, of Buffett's target of increasing the company's net worth more quickly than gains on the S&P over five years. Still, Berkshire's stock price jumped 30% in 2013.
Jan. 2, 2014, 12:25 PM
- Sell-siders scratched their heads when in May 2012 Berkshire Hathaway (BRK.A, BRK.B) agreed to buy 63 newspapers for $142M from Media General (MEG -1.3%), and provide $445M in loans to the company. Was The Oracle's love of newspapers interfering with his business judgement?
- It turns out Berkshire received 4.65M "penny warrants" as part of the deal which it exercised in September 2012 - the stock's about a 5-bagger since, and Berkshire's 17% stake is worth $105M. Buffett could sell today and recover most of the $142M paid for the newspapers while still owning them.
Jan. 2, 2014, 8:34 AM
Jan. 2, 2014, 8:24 AM
- Following a 2013 in which the number of natural and man-made disasters fell by half, reinsurers could be hit with up to a 25% decline in premium revenue this year, according to broker Willis Re.
- Combining with the lack of catastrophes is a market in oversupply as pension funds and hedge funds (like GLRE and TPRE) rush into the business - a $50B increase in industry capital, says Willis CEO John Cavanagh.
- U.S. property casualty reinsurance faces the biggest hit - 10-25% - while European premiums could fall 10-15%.
- Hannover Re (HVRRY) last week said it expected premiums to fall this year, fueling concern about a price war with competitors like Swiss Re (SSREY) and Berkshire Hathaway (BRK.A, BRK.B).
- Among U.S. reinsurers: ACE, XL, PRE, RE, RNR.
Dec. 31, 2013, 2:24 PM
- The town of Casselton, N.D., narrowly escaped tragedy yesterday when a train carrying crude oil derailed and exploded, and its mayor says shipping oil by pipeline would be a safer option.
- Residents said explosions continued for hours after the derailment, and BNSF Railway (BRK.A, BRK.B) said ~20 cars caught fire after its oil train left the tracks; the cars are being allowed to burn out.
- The incident could draw more regulatory scrutiny to rail shipments of crude, but analysts say the soaring use of trains to move oil is a long-term trend that isn't likely to change soon.
- "Rail will be the long-term transportation solution out of the Bakken to the U.S. east and west coasts due to the lack of pipeline infrastructure to those refining centers," Tudor Pickering says.
Dec. 31, 2013, 12:33 PM
- For Berkshire Hathaway (BRK.A, BRK.B), the purchase of Phillips 66's (PSX +2.9%) specialty products unit has a lot to do with the tax treatment; the financial terms of the deal look like the cash-rich spinoffs used by Liberty Media when it acquired interests in businesses such as the Atlanta Braves and DirecTV.
- The cash-rich split is a way for a holder of appreciated stock - PSX has gained 45% YTD - to dispose of it in a very tax efficient way, tax expert Robert Willens says, calling the acquisition a "great transaction" for Berkshire.
- But Barron's Ben Levisohn wonders what the purchase might say about PSX: BRK chose to pay with ~19M PSX shares it already owns and not with cash - is it a sign Warren Buffett thinks PSX has run too far?
Dec. 30, 2013, 6:09 PM
- A Burlington Northern (BRK.A, BRK.B) train carrying crude oil derailed this afternoon just west of Casselton, N.D. near the city's ethanol plant; no injuries are reported but few details have been provided so far.
- Crews at the scene say as many as a dozen railcars that were carrying ethanol or oil had left the tracks, with some bursting into flames.
- BNSF hauls ~750K bbl/day of oil from places like the Bakken in North Dakota and the Permian Basin in west Texas to refineries, and executive chairman Matthew Rose says the railroad should hit 1M bbl/day by year-end 2014.
Dec. 30, 2013, 5:28 PM
- Berkshire Hathaway (BRK.A, BRK.B) agrees to acquire the flow improver business of Phillips 66 (PSX) in exchange for PSX stock Berkshire already owns; the specific number of shares will be determined by the share price at deal closing, expected sometime during H1 2014.
- The unit, Phillips Specialty Products, makes polymers designed to reduce drag and increase the flow potential in pipelines; Warren Buffett calls it "a high-quality business with consistently strong financial performance," and he plans to install Lubrizol CEO James Hambrick to oversee strategic direction.
- Berkshire owns a 27.2M-share stake in PSX, or 4.5% of outstanding shares; Reuters reports Berkshire will use ~19M shares, or ~$1.4B.
Dec. 16, 2013, 9:09 AM
- Siemens (SI) +2.9% premarket after agreeing to sell 448 wind turbines and provide service for several years to MidAmerican Energy, Berkshire Hathaway's (BRK.A, BRK.B) power business, in SI’s biggest-ever order for land-based wind equipment.
- Wind turbines typically cost ~$1M for each MW of capacity, making the deal worth more than $1B, the head of Siemens Energy’s wind power division says, without providing an exact price.
- MidAmerican will equip five wind power projects in Iowa with the wind turbines and provide energy for nearly 320K homes.
Dec. 11, 2013, 4:08 PM
Dec. 11, 2013, 12:20 PM
- "If Carl Icahn is selling, do you want to be buying," asks Andrew Bary in Barron's. "Probably not." Icahn Enterprises (IEP -13.6%) extends yesterday's big post-secondary offering decline as Bary reminds the stock trades at a hefty premium to NAV of about $75 per unit.
- While it might be worth some premium to invest alongside Carl Icahn, says Bary, 80% is probably far too much (it's less since the article was published!).
- By contrast, you can invest with the Tisch family in Loews (L -1.3%) at a discount to NAV, and Berkshire Hathaway (BRK.A, BRK.B) trades at just 1.3x book.
- "Icahn can do the math and he seems to think the company's units are at least fully priced given the equity offering, which will add to his war chest as he pursues his distinctive brand of activist investing."
Dec. 3, 2013, 12:59 PM
- "It should be obvious to everybody by now that such stock market largesse is made in Washington ... The specific address is the Eccles Building," writes John Gilbert, CIO of General Re (a BRK.A, BRK.B unit), reflecting on Twitter's (TWTR) $25B market cap (on its first day of trade). "Correctly accounted, the company makes not a dime. But who cares when circumspection is the investment equivalent of tuberculosis."
- He notes Twitter came public during the same week Cisco tumbled on disappointing results. It was 2000, Gilbert reminds, when Cisco was valued at about $500B, or 200x the company's then-earnings. "Cisco and brethren were going to change the world. Sort of like Twitter today," he says, pointing to Cisco's "Rocky-Mountains-meet-the-Great-Plains" stock chart.
- "Following such a crowd is an excellent hedge against ever being financially independent. Gravity wins in time."
Nov. 14, 2013, 4:50 PM
- Berkshire Hathaway (BRK.A, BRK.B) takes a new 40.1M-share position in Exxon Mobil (XOM), apparently enough to make Warren Buffett's conglomerate the 6th-biggest holder of XOM shares. (13F)
- Berkshire also added to existing stakes in Bank of New York (BK), DaVita Health Care Partners (DVA), Suncor Energy (SU), U.S. Bancorp (USB) and VeriSign (VRSN); stakes were lowered in ConocoPhillips (COP), DirecTV (DTV), GlaxoSmithKline (GSK) and Sanofi (SNY).
- XOM +0.7% AH.
Nov. 1, 2013, 5:11 PM
Oct. 29, 2013, 3:09 PM
- Houston's Prudential Anderson Properties - with 17 offices in Houston, Austin, and Lubbock - plants its flag under Berkshire Hathaway's (BRK.A, BRK.B) HomeServices umbrella.
- Making a big bet on the U.S. housing market, HomeServices has been an aggressive buyer of Prudential (and other) realtor franchises over the past year.
- Press release.
Oct. 24, 2013, 10:37 AM
- Berkshire Hathaway's (BRK.A, BRK.B) HomeServices unit lands its first Midwestern affiliate with the addition of Prudential KC Realty.
- Renamed Berkshire Hathaway HomeServices Kansas City Realty, the team comprises more than 60 agents.
- Buffett is a well-known housing bull and HomeServices has been particularly aggressive of late in acquiring realtor franchises.
- Press release.
Berkshire Hathaway Inc is a conglomerate holding company owning subsidiaries engaged in a number of business activities, including property and casualty insurance and reinsurance, utilities and energy, finance, manufacturing, service and retailing.
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