Corporate Asset Management At Berkshire Hathaway

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Legendary investor Warren Buffett has held stock in The Coca-Cola Company (KO) for decades. His position through Berkshire Hathaway (BRK.A) (BRK.B) amounted to 400 million shares at last count and made up over 15% of Berkshire’s portfolio. Buffett’s investment serves other KO investors well because it adds an element of stability to the stock price, and Buffett has no plans to sell his shares in KO in the works. Other prominent investors with positions in KO at last measure included Yacktman Asset Management with 39 million shares and Eagle Capital with 22.3 million shares. We like Yacktman’s and Eagle’s positions because like Buffett at Berkshire, these funds are value-driven and not entirely motivated by short-term profits, taking a…show more content…
While organic revenue from company-owned operations grew by 4% during 2015’s second quarter, net revenue declined as a result of the complicated issues that come with Coco-Cola’s reliance on independent distributors, wholesalers, retailers and bottling partners. Fairly decentralized relationships and investments in business partners located across the world have impacted KO’s balance sheet. The fourth quarter of 2014 carried a $32 million loss because owners of a majority interest in one of the company’s bottling partners from Brazil decided to exercise their option to acquire a 10% interest in the Brazilian entity’s outstanding shares. This loss was exacerbated by the fact that the exercise price was lower than the company’s carrying value. Furthermore, during the first half of 2015, KO recorded a $19 million loss from a failing investment in a South African bottling partner. Still, these losses were not that material to KO as its revenue and profits are measured in the billions. Profits hurt by the strong dollar In its 2015 second quarter, Coca-Cola improved overall profitability, but profitability and growth from its non-U.S. operations have been unfavorably impacted by volatile exchange rate fluctuations. Foreign currency exchange rate fluctuations caused an 11-point headwind in the company’s
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