LUK overvalued?

[shalab]

Looks like LUK is overvalued when compared to BRK, FFH and WSC.

[scorpioncapital]

Interesting conclusion. I've come to the opposite one, what metrics are you using and how can an insurance company be compared to a non-insurance company?

[philassor]

If you look at the financial figures posted yesterday evening, it appears that LUK is operating on rocket fuel: as I mentioned somewhere else, its  book value increased by 58% ytd. This  fast growing company historically traded at  a bv of 1.8 and is today at less than 1.3. Considering the demonstrated skills of the jockeys and in spite of last year's dismal results, I would think the stock is undervalued. Of course I do own some and I do have a bias.

[scorpioncapital]

"On the other hand, LUK has high exposure to real estate and medical stuff"

 

LUK's investment in Sangart and Real Estate is less than $500 million. Of that, Sangart has been written off to zero so the total stated invested is probably closer to $400 million. $400 million in relation to equity of $4.2 billion is just shy of 10%, which I would consider minor exposure, not high at all.

[benhacker]

Got to agree with Scorpion here.  LUK seems pretty reasonably priced to cheap here.  I think the big risk (and why I haven't invested) is just how long with C&S be with the ship.  Even compounding 15-18% starts to make me wonder if they have to do a wind down at the end of the road in 8-10 years.  However, just as with BRK, I think the acknowledgment that these guys are freakin' smart, and fair, which means they will probably come up with a good solution.

 

I somewhat regret not buying this under $12, but the other stuff I was buying at that time did well so I don't cry too much.  That said, I'd be pretty interested in the $16-18 range again I think.

 

They don't come much better than these guys.

 

Ben