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LUK results out...


Alekbaylee
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I really like the direction LUK is going. I have no idea what Berkadia or a few of the other assets are worth, but I am sure most are worth more than book, probably multiples on book. LUK is shaping up to be a great inflation edge and I feel a bit late to the party. From cruising through the Q it looks like they are shedding quite a few low quality assets and most are at least bringing back their book value.

It looks like they are simultaneously raising cash, high grading assets, and paying down debt. It should be interesting to see what they do going forward.  I plan to go back and read some of the older letters.

 

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I really like the direction LUK is going. I have no idea what Berkadia or a few of the other assets are worth, but I am sure most are worth more than book, probably multiples on book. LUK is shaping up to be a great inflation edge and I feel a bit late to the party. From cruising through the Q it looks like they are shedding quite a few low quality assets and most are at least bringing back their book value.

It looks like they are simultaneously raising cash, high grading assets, and paying down debt. It should be interesting to see what they do going forward.  I plan to go back and read some of the older letters.

 

 

It's only the beginning, even though it was as low as $12 during the crisis, at $27 it is still a good deal, if you use margin, given its S&P500 status and larger market-cap there are not many investments that look as appealing even at the current price. I'm seriously thinking of divesting my last batch of berkshire to buy more Lu©k

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Ant thoughts about the age of the management team? Otherwise, I agree with the previous comments.

Thanks,

 

Michael

 

If they were younger they wouldn't be as good, if they were older, they'd be dead :)

What's the sweet spot for age? Probably mid 40s to mid 60s. In this sense, LUK's management is slightly on the undesirable side, but about 10-15 years younger than Buffett. Still, no offence, but Mr. Cummings looked a bit portly last year, and we do know longevity is somewhat correlated with weight as well as genes. Steinberg looked in good shape.

 

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Are the leaps historically mispriced or do you think that LUK is so cheap that it should be up in 2 years.

 

Probably not mispriced. I just want some cheap non callable leverage. You can go deeper in the money and avoid giving up some premium but it will still cost you a dollar or 2 of premium. I will probably go deep in the money.

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