L - Loews

[merkhet]

LOL at this jim tisch rant about his stock price!

 

the DO writedown has come through so, it's now about 0.6x

 

Maybe he could take out minority shareholders at a very slight premium to this price. Too soon?

 

I love that he briefly talks about the Boardwalk assets. "Uh, so the Boardwalk assets are worth a lot... but we are also getting sued on that takeunder, so if there are any lawyers on this call, Boardwalk isn't worth very much..." #threadthatneedle

[Spekulatius]

So they complain about the share price, have ~$3.5B in cash and spend $0.035B to buy back 1M shares in Loews stock. Thank you Mr. Tisch, that’s all we need to know.

[bizaro86]

So basically he knows the stock is too cheap because the market doesnt trust him to do a good job on capital allocation. And his plan to solve that problem is a long whine instead of changing the capital allocation?

[thepupil]

I’ve always wondered why no one has been willing to go after L as an activist. There aren’t supervoting shares and the family’s stake isn’t so huge to block. The proxy firms would take issue with underperformance, pay, and governance (director tenure etc). I’ve hypothesized that the tisch’s have generally been good to the value community in investing in funds and are part of NYC society so no one wants to ruffle their feathers, but still surprised there’s not one upstart out there who’d want to accumulate 5% and pick a fight.

[CorpRaider]

So basically he knows the stock is too cheap because the market doesnt trust him to do a good job on capital allocation. And his plan to solve that problem is a long whine instead of changing the capital allocation?

 

Same stuff for like 7 years.

[abitofvalue]

for all the complaining about it being cheap.. management is voting with their wallets by selling shares.  maybe market views it like insiders?

 

https://www.nasdaq.com/market-activity/stocks/l/insider-activity

[CorpRaider]

Martin Fanklin cited them as the example of what a failed Berkshire after Buffett and Munger leave the scene might look like when he was on the Ritholtz podcast. 

[gfp]

I don't follow this company closely - but I don't think that is management selling shares.  I think that is directors selling newly granted stock they received for free as BOD compensation.

 

for all the complaining about it being cheap.. management is voting with their wallets by selling shares.  maybe market views it like insiders?

 

https://www.nasdaq.com/market-activity/stocks/l/insider-activity

[thepupil]

Well there are extremes of valuation where I’ll own anything.

 

On 3/31/2009, L was at 0.5x P/B

 

Today it hit 0.43x (but we know big writedowns are coming so it’s not quite that cheap)

 

Loews Corp is an A rated credit which just raised 10-year money at 3.2% a few days ago.CNA’s bonds do not indicate financial distress; BWP’s do trade ~600 over, but there isn’t any indication at this time of huge coming impairment at L.

 

I think it’s worth at least paying attention when profitable insurers* are trading at 0.4x book and have a large portion of the parentCo balance sheet in cash and liquid investments and are able to borrow money on good terms. Particularly in the context of a company that has spent the entirety of its 5 decade history buying back shares.

 

I was not picking stocks in 2009. In some ways today is scarier, maybe. In other ways it isn’t. It’s not 100% clear that this is much worse as 08/09 (or better), so I’m not saying it’s a slam dunk and don’t own the stock, but surely there is some price at which it is worth considering (unless one thinks CNA goes BK, which could happen, given the uncertainty in insurance right now)

 

*to be clear L is not just an insurer, it is also a midstream energy company, hotelier, and packaging company, how glamorous!

 

didn't buy, but since this post, L +66% on the re-rate from "oh my god the ship's going down / 40% of book" to "just the same old crappy Loews" (70% of book).

 

I think not buying was the right decision given the facts at the time and available valuations in higher quality better managed businesses, but just pointing out for posterity that it was an okay idea (if we use the barometer of short term performance, which is imperfect).

 

CNA performed well and Loews has repurchased 24 million shares since December 2019 (8% of then fully diluted shares outstanding).

 

maybe next time when the market pukes Loews to 40% of book, I'll buy some lol.

 

Loews      +66%

 

SPY          +37%

Berkshire  +38%

Google      +55%

Amazon    +40%

Markel      +40%