Buffett Did Not Get This Energy Deal Wrong

Warren Buffett lost on the Energy Future Holdings deal, but when it comes to NV Energy, its pure gold!

Mar 5, 2014 at 3:17PM
Warren Wikipedia

Source: Wikipedia.

In Warren Buffett's recent letter to Berkshire Hathaway shareholders, the investing legend quipped about his firm's purchase of Energy Future Holding, saying it was a mistake he made without the approval of his partner, Charlie Munger. This small blunder has been the focus of news outlets everywhere since the letter was published, but not too many are looking at the gem of a deal Berkshire acquired in NV Energy. 

This regulated utility not only supplies 88% of Nevada with electricity, it also delivers a reasonable return after covering interest expenses. The real sweetener of this deal is NV Energy's intention to join the Cal-ISO, supplying California with much needed renewable energy. Knowing that the state is eying a renewable portfolio standard for publicly traded utilities of 33% by 2020, NV Energy and Berkshire shareholders are looking at a hefty premiums for the energy it will sell in the energy hungry Californian market. 

Can America take on OPEC? 
Imagine a company that rents a very specific and valuable piece of machinery for $41,000 per hour. (That's almost as much as the average American makes in a year!) And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click here to uncover the name of this industry-leading stock, and join Buffett in his quest for a veritable landslide of profits!

This segment is from Tuesday's edition of "Digging for Value," in which sector analysts Joel South and Taylor Muckerman discuss energy and materials news with host Alison Southwick. The twice-weekly show can be viewed on Tuesdays and Thursdays. It can also be found on Twitter, along with our extended coverage of the energy and materials sectors @TMFEnergy.

Joel South owns shares of SunPower. Taylor Muckerman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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