LUK in Barron's today:
| SATURDAY, NOVEMBER 17, 2012
Big Deal for a Baby Berkshire By ANDREW BARY | MORE ARTICLES BY AUTHOR
"Leucadia is paying less than book value for Jefferies. That may upset some Jefferies holders, but there's some consolation because Leucadia trades below its book value. With the addition of Jefferies, Leucadia's earnings power should rise, boosting book value. That could lead to an appreciable rise in Leucadia's depressed share price."
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Given I'm a fan of growth in book value, this aspect of the article appeals to me:
"Warren Buffett is a fan of the company, having partnered with Leucadia in forming Berkadia, a commercial-mortgage servicer and originator. Like Buffett, Steinberg and Cumming focus on growing book value, and they have a strong record. The stock has risen at a 19.8% annual rate from 1979 through 2011, versus a 10.9% rate for the S&P 500. The stock is down sharply, however, from its 2007 peak of $56, as the price/book multiple has collapsed."
"The Bottom Line: With the addition of Jefferies, Leucadia's earnings power should rise, boosting book value. That could lead to an appreciable rise in Leucadia's depressed share price."
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I hold a small LUK position. Intending to add more if I can catch the stock under $20/sh on no adverse news.
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