Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A) has a totally market capitalization of $284 billion. It focuses on a long-term investing perspective, including publicly traded stocks. Berkshire Hathaway Inc. (NYSE:BRK.A)’s portfolio is diversified across a wide variety of sectors. Its top three holdings, as per its recent 13F filing with the SEC, were The Coca-Cola Company (NYSE:KO) , Wells Fargo & Co (NYSE:WFC), and International Business Machines Corp. (NYSE:IBM) .
In this article, I have analyzed these three companies on the basis of their expansion plans, as well as their performance in the long-term horizon.
Stevia, a new sweetener
In the first quarter of 2013, The Coca-Cola Company (NYSE:KO) observed slower growth in sales volume of carbonated drinks in Europe by 5%. Due to growing health concerns and obesity, customers prefer low-calorie drinks. In order to overcome this issue, the company has added stevia, a sugar-free sweetener, to soft drinks. Stevia is 25-30 times sweeter than table sugar and has zero calories. In 2012, the European Food Safety Authority declared stevia a safe sweetener.
Coca-Cola has come out with Sprite Zero, which has 30% less calories while the taste remains the same. At present the company is using stevia as a sweetener in 25 worldwide products. It is sure that stevia will gain its customers’ confidence and will bring a significant change in 2013 and 2014 financial results. Europe’s total sales are expected to grow from $1.17 billion to $1.22 billion by the first quarter of 2014.
The Coca-Cola Company (NYSE:KO) also announced that it will restart its bottling business in Myanmar after 60 years, on June 4, 2013. In 1962, investments made by U.S. companies were banned in Myanmar, when domestic penalties were imposed on them against a government council of military leaders. Coca-Cola is the first company to get an investment permit in Myanmar after the end of military rule in the country. The company has plans to invest $200 million for next five years. This investment will boost the total production, sales, and distribution. Coca-Cola announced that it has set a target to reach 100,000 retail stores in Myanmar within the next six months.
x86 server divestiture
IBM, on June 4, 2013, announced that it will acquire SoftLayer Technologies, a major cloud computing company of the U.S, for $2 billion. This will help IBM solidify its position in the cloud computing market. IBM has set a benchmark in the cloud computing business, which grew 70% year over year, and the company posted total revenue of $23.4 billion in the first quarter of 2013. With such pace, it is estimated that by 2015, its cloud computing business will reach up to $7 billion.