I guess my beef with Loews is that yes, it is an asset play, but
it is so well-known. I love asset plays, but this one everyone
knows that it trades at a big discount and that it has all these
assets. Barron's publicizes it. Forbes publicizes it. And everyone
just says, yeah, it's way undervalued. And no one buys.
I called Loews to get some answers when I was trying to figure
out the asset side of the equation a few months ago. Most people
at Loews don't even know what they're sitting on, other than that
it's a lot and its undervalued. And no one buys.
So there's no catalyst. And I figure it's because, well, how are these returns going to trickle down to shareholders. If Tisch isn't going to liquidate, spin off or sell its assets, then the bet is he'll die and someone else will in a reasonable time. If not, well, the present value to me of all those assets might be very small.
If management recognizes that the company is being perpetually undervalued by the stock market, then it has a fiduciary responsibility IMO to start liquidating. If the world thinks Lorillard is such a liability, well then sell it for $6 billion and show the world it's not.
I figure at $120 I'd be buying a conservative dollar for a dollar. If it hits $55-60, I'll buy in again, get my dollar for 50 cents and wait.
Mike |
