Warren Buffett makes Sees Candies

Investing guru Warren Buffett may have invested in Apple and Coca-Cola, but his “dream business” is See’s Candies, a California seller of boxed chocolates he bought in 1972.
The so-called Sage of Omaha has praised See’s outsized financial returns, modest capital needs, economic moat, quality personnel, and the chocolates themselves.
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Warren Buffett has invested in Apple, Coca-Cola, Amazon, Bank of America, and other household names. Yet See’s Candies, a California seller of boxed chocolates, is the investment guru’s “dream business.”

Buffett has frequently applauded See’s since buying it in 1972. He and his investment partner Charlie Munger have “earned exceptional returns and had a good time,” he wrote in his 1991 letter to shareholders. “We would love to increase our economic interest in See’s, but we haven’t found a way to add to a 100% holding,” he wrote in his 1994 letter.

The so-called Sage of Omaha’s has praised See’s outsized financial returns, modest capital needs, economic moat, quality personnel, and the chocolates themselves. We look at each aspect of the company below.

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A return of 8000%

Probably the biggest reason for Buffett’s love affair with See’s Candies is the enormous return he’s made on his investment: north of 8000% since 1972, or more than 160% a year.

“We put $25 million into it and it’s given us over $2 billion of pretax income, well over $2 billion,” Buffett said at this year’s annual shareholder meeting, according to the San Francisco Business Times.

See’s has grown from earning $30 million in annual revenue and less than $5 million in pre-tax income when Buffett bought it, to more than $380 million in sales and $80 million in profits, according to …read more

Source:: Business Insider

      

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