Jump to content

Loews Numbers Not Very Inspiring


Recommended Posts

http://finance.yahoo.com/news/Loews-Lags-Bottom-Line-zacks-3996506910.html?x=0&.v=1

 

With the S&P hovering in mid-air its not a fabulous market for value investors right now.

 

But at least there is this:

 

Share Repurchases

 

Loews spent $228 million in the quarter to buy back 5.5 million shares. Subsequent to the second quarter through July, the company bought back another 1.0 million shares for $41 million.

 

http://ycharts.com/companies/L/shares_outstanding#startDate=8/30/2001&endDate=3/31/2011&zoom=

 

;D

Link to comment
Share on other sites

According to the Q&A for the quarter's CC, Tisch doesn't see any compelling uses for the the growing cash position.  Most of the Q&A really covers that point.  They prefer full buyouts to being a minority shareholder, they don't see compelling opportunities, they're content to spend the money on buy-backs for now (given they view their own shares a attractively priced).  Watching paint dry is absolutely right. Seeing nothing smart to do, they'll do nothing.  It's perfectly rational, but not very exciting.

 

http://seekingalpha.com/article/283584-loews-ceo-discusses-q2-2011-results-earnings-call-transcript?part=qanda

 

 

 

Link to comment
Share on other sites

I think its a cop out. Its been that way for 3-4 years. How you get through the financial crisis having seen no opportunities.....

I mean what exactly are you looking for - LUK, BRK, and countless others found stuff to buy. Oil hit $35, nat gas at $5 and still nothing..................

 

I cant give them credit for doing nothing during the biggest downturn in the last 20 - 30 years.

 

Thanks for the transcript you can read them so much faster then listen. I do like the buybacks, they are getting a great discount to IV. I would prefer a few key minority positions though.

Link to comment
Share on other sites

May be a cop-out, as you say.  The last few years have certainly provided opportunities to put cash to work.  But J. Tisch comes right out and says they're not that interested in being a minority shareholder.  So, they're looking for buy-outs rather than just buying attractively priced equity securities.  Seems like they're most interested in using Holding Co cash to support purchases through the operating subs.

Link to comment
Share on other sites

I'm about to say something stupid, so I'd skip this post.

 

I don't really like James Tisch. To me, he comes off as a guy who won the sperm lottery (I'd so ovarian, but it wasn't his mom who made the company.) He is smart guy and seems honest, but I was scratching my head in 2009 when he didn't pull the trigger. I remember watching interviews of him (either on Bloomberg or Consuelo Mack) of him complaining about how the government is making things too foggy for him to make an investment. He was afraid to invest in uncertain times....well....there are not going to be that many great investments you will make if everyone is certain.

 

I also found him off putting when he would give these interviews saying he wasn't investing because he found the current government (the Obama administration) too fond of regulations and the regulatory environment made things too uncertain. To me, James Tisch politicized his investment decisions or had allowed his political fears/biases to infect his investment choices.

 

This all being said, I wouldn't mind owning Loews at current prices.

 

(James Tisch has been stewing in my brain for a while, I hope someone can tell me what a complete idiot I am)

Link to comment
Share on other sites

 

I don't really like James Tisch. To me, he comes off as a guy who won the sperm lottery (I'd so ovarian, but it wasn't his mom who made the company.)

 

LOL

 

I really agree. I am young, but I am guessing this aint his first rodeo. He always has a reason for not investing. The goal should be increasing intrinsic value not control. Buying any number of securities from 2008 till now would have done just that......

Link to comment
Share on other sites

I've never been a big fan of L either.

 

It's on my watchlist, but I kind of consider it to have a similar model to BRK, FFH, LUK, and MKL, and I'd probably buy any one of those before L, even if L tends to almost always be cheaper (at least compared to book value). I don't like the assets are much, and I don't like the management as much as the others, so it's an easy choice...

Link to comment
Share on other sites

I own L at very cheap prices. Bought at the right price I view it as a cash substitute because of its very strong balance sheet, ability to withstand macro headwinds, and the conservative hands at the helm. My read on Tisch is that he really does not have to do anything. His family has control, I am sure they get generous salaries and benefits and 401Ks. They get some dividend income, and they own shares which increase their ownership % as the outstanding shares are purchased and retired. What a gig!!!  I think his first preference is to sleep really well at nite.  He will do an investment when in his mind its very close to a sure thing. ZZZZZZZZZZZZZZZZZZ.  But it seems to work, the company has been around in one shape or form since the 60's I believe. 

Link to comment
Share on other sites

Perhaps this is a bit simplistic but I find the QonQ change in book value from $45.54 to $46.81, +2.8% or 11% annualized acceptable. Over the long term they seem to be able to compound book value at around 10%+.  Investing in Loewes seems to work out OK if you can pick them up in the range of 0.8-0.85x's book (37.5-39.5). At the current market price of 38.23 the are starting to look quite tempting

 

Cheers

 

Nwoodman

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...