U.S. PPI July reading inches up, Coca-Cola (KO) to take large stake in Monster (MNST) and Berkshire Hathaway invests in Charter (CHTR)

Bourbon & Bayonets / Friday, August 15th, 2014

Markets were heading slightly higher on Friday after U.S. producer prices were up mildly in July. The Labor Department said that the drop in energy and goods offset rising food prices. The PPI reading came in 0.1% higher last month after a 0.4% rise in June. The gain was on par with analyst’s expectations. In the past 12-months, there has been a rise of 1.7% in producer prices.

Shares of Monster Beverage Corporation (MNST) were skyrocketing after Coca-Cola (KO) announced that they would be paying $2.2 billion for a large stake in the company. The cash payment will give Cola a 16.7% stake in the Monster. Coke will then be able to have two members on Monsters board of directors. The deal will help Monster because it will help them gain a presence where they have none in markets like China and Russia and making a bigger presence in areas like Brazil. Rodney Sacks, chief executive officer at Monster, said, “We believe it’s a win-win strategy.”

Shares of Charter Communications, Inc. (CHTR) were on the rise after news was released that Berkshire Hathaway Inc. invested a large stake in the cable provider. Berkshire Hathaway Inc. is lead by billionaire investor Warren Buffett. A regulatory filing with the Securities and Exchange Commission revealed that Berkshire Hathaway now owns a $366 million stake, roughly 2.3 million shares, in the company. The filing does not reveal if it was Buffett himself or one of his portfolio managers that made the investment.

Shares of Ford Motor Co. (F) were trading relatively flat after the company reported that they would be recalling 83,250 vehicles due to a faulty part. The company said that due to a incorrect installation of a clip in the axle of the cars, when the vehicles are parked they could lose power and roll away. Cars affected in the recall are the Ford Edge made between 2012 and 2014 and the Lincoln MKX with the same year, the 2013 and 2014 Ford Flex and Lincoln MKT, and the Ford Taurus and Lincoln MKS made in 2013 and 2014. Ford said that there have been no reported injuries related to the recall.

That’s all for today,

Warren Gates, Normandy Research

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