A Mini-Berkshire at a Bargain Price

Over the course of three decades, Leucadia National developed a cult following on Wall Street and was often likened to a mini Berkshire Hathaway, thanks to the success of its founding duo, Joseph Steinberg and Ian Cumming, in making investments, minimizing taxes, and building a small-scale conglomerate.
Leucadia (ticker: LUK), however, has fallen from favor since early 2013, following its $4.8 billion purchase of Jefferies, the investment bank, and a leadership transition that put Jefferies CEO Richard Handler in charge of both companies. Leucadia shares, at around $24, are little changed since the Jefferies deal closed in March 2013. The stock has been one of the worst performers among the 85 financial companies in the Standard & Poor’s 500 index in the past year, with a decline of 18%.
CEO Richard Handler: “Our goal is to deploy capital methodically and build book value per share over time.” Photo: Bloomberg News
Leucadia’s business and financial outlook is better than its stock-market showing suggests, and its shares now look undervalued. “We think the pieces of the company are worth in excess of $30 a share,” says Keith Trauner, co-portfolio manager of the GoodHaven mutual fund, a Leucadia shareholder. “Leucadia offers a reasonable margin of safety and it has a very good management team that understands value and risk.”
The shares trade below book value of $28 and at a modest premium to tangible book of $20. Leucadia and Jefferies had been close before the merger, and the deal helped both by giving Jefferies access to a larger capital base and solving the management-succession issue. Cumming, 73, the former CEO, retired in 2013, and Steinberg, 70, moved from president to chairman. Leucadia isn’t easy to analyze because it has multiple businesses and assets besides its most valuable operation, Jefferies. A 79% stake in a big meatpacker, National Beef, purchased in 2011 for $868 million, is valuable, but the company is operating close to break-even this year because of difficult conditions in the cattle industry. One of the best units is Berkadia, a 50/50 joint venture with Berkshire (BRK.A) that originates commercial mortgages. Like Berkshire, Leucadia has long been valued on growth in book value. So why is the stock languishing? Low returns outside Jefferies. Leucadia earned just 59 cents a share from operations in the first nine months of this year. Investors also may be taking a wait-and-see approach to Handler and his No. 2, Brian Friedman, Leucadia’s president. It doesn’t help that the company has virtually no analyst coverage. That reflects Leucadia’s complexity and minimal communication with investors in the past.

Handler, 53, has sought to raise Leucadia’s profile and tell its story. “Our goal is to deploy capital methodically and build book value per share over time,” he told Barron’s at Jefferies Manhattan headquarters. “We have permanent capital and can take stakes or controlling positions in assets that we can influence or control, and build value over time.”
A former junk-bond trader at Drexel Burnham, Handler joined Jefferies in 1990 and became CEO in 2001. Under his leadership, the firm has grown to become the largest non-bank investment banking and trading firm—all the giants are now banks. During the past 13 years, annual net income is up to $366 million from $55 million. Jefferies has a reputation as a scrappy upstart, like the old Bear Stearns. One of its longtime clients is investor Carl Icahn.
Long known for junk-bond trading, Jefferies has built its investment bank in the wake of the financial crisis. That strategy is paying off with investment banking now accounting for almost half of revenues. The firm ranked 10th industrywide in banking revenues in the past year. Jeffrey Bronchick of Cove Street Capital is a fan of both Handler and Friedman. “They built something from nothing at Jefferies and they want to be successful at Leucadia and make a lot of money for shareholders,” Bronchick says. Cove Street holds the shares.
JEFFERIES’ GROWTH IS CRITICAL to Leucadia’s outlook. Jefferies tangible book value is $3.6 billion, and the firm could be worth over $5 billion. Its return on tangible equity is a respectable 10%—comparable to Morgan Stanley and below Goldman Sachs.
Since becoming Leucadia CEO, Handler has sold some businesses and made over $1 billion of investments, including the well-timed purchase of a 20% stake in Harbinger Group (HRG), an investment company, now worth over $500 million. Leucadia is seeding asset management companies and investing in the energy sector. More deals are likely since Leucadia has a strong balance sheet with $1.7 billion in cash and $1 billion of debt. Bulls argue that it will take some time for the new investments to pan out.
Handler is known for being informal—and direct and sometimes impulsive. A drug and *** scandal broke recently when the wife of Sage Kelly, Jefferies’ top health-care investment banker, accused him during divorce proceedings of rampant drug use, and alleged that other members of Kelly’s team at Jefferies had used illegal drugs. Kelly denied the allegations and is now on leave from the firm. Handler and Friedman immediately volunteered to take drug tests, and the bankers accused in the suit did the same. All of the tests came back negative.

The Bottom Line
Since the Jefferies merger in 2013, Leucadia’s shares have gone nowhere. They could reach $30 from a recent $23.80.
The Kelly divorce case publicity probably hasn’t helped Jefferies’ investment banking business, yet it doesn’t appear to be having a material negative impact, and the stock actually has risen.
Leucadia looks like an undervalued play on Jefferies growth and Handler’s investment ability—both of which look like good bets.
Ciao Leite ma sei un'azionista? ...Non sembra male :)
no, mai stato azionista di una holding
Ho adocchiato un'azione tedesca che fa più o meno lo stesso lavoro di Leucadia, AURELIUS AG.
E' più piccola, capitalizza circa 1 miliardo di euro, ed è quotata da meno di dieci anni, durante i quali è stata un deciso overperformer dello MDAX, che a sua volta è un overperformer del DAX (è un 14-bagger dai minimi del 2009), ed è tuttora in una fase di buona crescita del fatturato. Nel suo portafoglio attuale ci sono due società note anche ai consumatori italiani: Scholl, che produce calzature "salutari", acquisita da Reckitt Benckiser, e Blaupunkt, che ha di recente concluso un contratto di fornitura di autoradio con Volkswagen, oltre a molte altre società. Finora non ho molto approfondito ma a lume di naso mi sembra interessante.
Jefferies Bumps Up Against Big Rivals as It Looks to Expand - WSJ

Benjamin Lorello, Jefferies LLC’s investment-banking chief, spent years cultivating his relationship with executives at Sirona Dental Systems Inc., helping the small-but-promising health-care company raise money and providing advice on acquisitions. But when Sirona sought an investment bank to lead a $235 million secondary stock offering in 2011, it chose Barclays PLC, because it made “an aggressive offer” to back the entire deal, said Jeffrey Slovin, Sirona’s chief executive. Sirona also selected Barclays to lead a bigger secondary offering of $542 million later that year.
As Jefferies evolves from its roots as a trading firm to a midtier investment bank, it is knocking up against far larger financial firms vying for business, often from companies Jefferies helped to expand. Jefferies has often worked with smaller firms on transactions that bigger rivals may not pursue. As these customers get larger, the competition intensifies as they are courted by bigger financial firms.
In 2014, Jefferies has been a lead underwriter on 25 U.S.-listed initial public offerings of health-care-related companies, topping all other investment banks, according to data provider Dealogic. But Jefferies ranks just eighth in net revenue generated by U.S. health-care banking overall—which includes stock and bond offerings, loans and merger advice—generating $196 million in revenue, trailing No. 1 J.P. Morgan Chase & Co.’s $639 million. “Investment banking has always been highly competitive,” Jefferies Chief Executive Richard Handler said in an interview at his office, just off the trading floor.
The firm isn’t attached to a bank holding company and therefore has more flexibility in how it structures deals and compensates employees. This entrepreneurial structure was part of the allure when Mr. Lorello moved to Jefferies in 2009 with more than 30 health-care bankers, according to people familiar with the firm. Jefferies is a unit of Leucadia National Corp. and has net revenue topping $3 billion.
“Our competitive advantage has never been stronger in the 25 years I have been at Jefferies,” Mr. Handler said.
Mr. Handler is particularly protective now. In an October memo to clients, he said rivals fanned rumors after Jefferies’s health-care chief, Sage Kelly, took a voluntary leave in October. In a custody dispute, Mr. Kelly’s wife accused the banker, along with some colleagues and clients, of drug use and claimed she was involved in a ***ual tryst with a Jefferies client. The firms denied the allegations, and Mr. Kelly’s wife has issued an apology. Mr. Kelly, 42 years old, remains on leave. Mr. Kelly declined to comment. Mr. Lorello, 61, who is running the health-care group in Mr. Kelly’s absence, couldn’t be reached for comment.
Mr. Handler said the health-care business hasn’t slowed. In the month since the episode erupted, the firm has been hired to work on 28 new health-care deals, he said.
Jefferies has about 90 people now focusing strictly on health care, spotting promising startups and pushing hard to win work from bigger companies. The group has accounted for nearly 22% of the firm’s U.S. investment-banking net revenue this year, according to Dealogic. Clients said Mr. Handler, 53, often is directly involved in deals.
“I don’t know the head of Deutsche Bank, but I know the chief executive of Jefferies,” said Tilman Fertitta, chief executive of Landry’s Inc., a $3 billion restaurant group that has worked closely with Mr. Lorello and other top executives.
During a financial crunch in February 2007, Landry’s had to refinance bonds. “The whole senior management team got involved and got it done,” Mr. Fertitta said. “I’ll never forget that.”
The involvement of top Jefferies executives helped the firm win business to manage Ardea Biosciences Inc.’s follow-on offerings of stock in 2010, 2011 and 2012. But when Ardea was acquired by AstraZeneca PLC in a roughly $1.3 billion deal in 2012, Ardea worked with Bank of America Merrill Lynch as financial adviser.
A Jefferies spokesman said a pre-existing merger-and-acquisition engagement with Bank of America Merrill Lynch led its bigger rival to win the Ardea deal. Jefferies, however, has continued to push hard and won subsequent work with Ardea executives when they formed a new company.
Among larger clients, Jefferies advised Valeant Pharmaceuticals International Inc. on its roughly $3.2 billion merger with Biovail Corp. announced in 2010. It has also advised Pfizer Inc. The firm has worked on 18 health-care deals bigger than $1 billion this year.
But sometimes it takes smaller roles with smaller fees. For representing Chiesi Farmaceutici SpA in its complete acquisition of Cornerstone Therapeutics Inc. announced in 2013, it received $800,000 in fees, compared with $2.9 million paid to Lazard Ltd. for representing Cornerstone. Jefferies said its fees were lower because it didn’t have to do as much work on the Chiesi side, partly because Chiesi already owned part of Cornerstone.
Meanwhile, bigger banks are courting Jefferies’s clients as those companies expand.
“We have never worked with another bank,” said Chris Tanner, chief financial officer of Cosmo Technologies Ltd., which was advised recently by Jefferies on a potential $2.7 billion deal with Salix Pharmaceuticals Ltd. (The deal was canceled.)
“We get calls from other banks all the time now,” he said.


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c'è da dire che negli ultimi 19 anni LUK ha compoundato il book value al 9,4%, Berkshire al 13,97% e la più piccola Markel al 16,8%


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sul CIO di Markel:
Like Buffett, Another Folksy Investor Turns Patience Into Profit - MoneyBeat - WSJ

Earlier this month, a crowd filled an auditorium to attend a corporate annual meeting at which a folksy investor spoke about his company and the secrets of success. But they weren’t in Omaha to hear Warren Buffett talking about Berkshire Hathaway; this crowd came to the Altria Theater in Richmond, Va., for the annual meeting of Markel Corp.
One of the speakers, Thomas Gayner, co-president and chief investment officer of the financial-holding company, has an outstanding record as a portfolio manager. He works only for Markel and doesn’t take outside clients, but every investor can learn from him.
Over the past 15 years, Mr. Gayner’s stocks have returned an average of 11.3% annually, while the S&P 500 index of big U.S. stocks has returned 4.2%, counting dividends. Last year, when winning portfolio managers were scarcer than vegetarians at a pig roast, Mr. Gayner outperformed the S&P 500 by 4.9 percentage points. His portfolio fell 34% in the market rout of 2008, but that was better than the S&P 500’s 37% loss.
You never would know any of this from listening to Mr. Gayner. After a good year, most portfolio managers beat their chests even harder than they beat the market; Mr. Gayner’s 2014 report merely said, “our overall equity portfolio earned 18.6%,” without even mentioning that the S&P 500 was up 13.7%. Several of Mr. Gayner’s peers describe him as a good investor who has become great by knowing he is just good. He is no Warren Buffett, and he is keenly aware of his limitations. “I tell investors, ’You’re smarter than I am, but I’m managing your money,’” Mr. Gayner says. “‘If you see me doing something I shouldn’t be, tell me.’” But he also makes the most of his strengths.
Markel’s costs are so low that he can manage its $4.5 billion stock portfolio for less than 0.01% in annual expenses, about one-70th the cost of the average U.S. stock mutual fund.
Mr. Gayner, 53 years old, worked as an accountant, a stockbroker and an equity analyst before joining Markel in 1990. He looks for profitable businesses with low debt, good management, plenty of opportunities to reinvest future profits and reasonably cheap stock.
He says, “I think as hard as I can about what I would do if this was my own money and even if it was all the money I ever will have.” Adds Mr. Gayner: “Sometimes that means hanging on even longer than you might otherwise.”
According to Mr. Gayner, Markel’s insurance operations are so consistently profitable that cash has flowed into his portfolio every single month since he joined the company in 1990. Unlike most mutual-fund or hedge-fund managers, he has been able to add to his favorite holdings whenever he wishes; any individual investor who is a net saver, Mr. Gayner says, shares the same advantage.
Markel doesn’t hold “analyst days” or provide “guidance” on future earnings. So the company attracts investors who tend to hold the stock for years at a time, which, in turn, frees Mr. Gayner from the pressure to beat the market over the short run or to shadow the S&P 500. So he can bet big. His 10 largest stockholdings total 45% of the portfolio; at the average U.S. stock fund, according to Morningstar, the 10 biggest positions account for just under 30%.
He lets his winners run. At Markel’s full 35% tax rate, “if I sell, I have to invest the proceeds, and I’m reinvesting 65-cent dollars,” Mr. Gayner points out. “That makes the hurdle for switching a lot higher.” He has owned Berkshire Hathaway, now approximately 11% of Markel’s stock portfolio, for a quarter-century and CarMax (9% of the portfolio), Brookfield Asset Management (4%), Walt Disney Co. (4%) and Marriott International (3%) for at least 15 years apiece.
“If you stumble on something that really compounds in value for decades, it can make all the difference,” he says. “The things you were right about become more and more important as time goes by, while the things you were wrong about become less and less important.”
The economist Paul Samuelson once said that there is “only one place to make money in the mutual-fund business—as there is only one place for a temperate man in a saloon—behind the bar and not in front of it…so I invested in a [fund] management company.” Mr. Gayner also likes to invest in such companies. He owns, among others, BlackRock, Federated Investors, Oaktree Capital Group and T. Rowe Price Group.
Many of Mr. Gayner’s roughly 90 other positions are tiny, including Rush Enterprises, an operator of truck dealerships, in which Markel holds less than a $300,000 position. “I think about something more if I own a little of it than if I own none of it,” he says. “I’m scattering seeds, seeing which become seedlings.” Instead of trying to mimic the inimitable brilliance of Mr. Buffett, maybe more investors should emulate the common sense and patience of Mr. Gayner.
A 21,40$ siamo ad un P/BV di 0,75. Guardando il grafico storico questo è un minimo assoluto.
Occasione d'acquisto o seri problemi della società? :mmmm:
Forse meglio aprire questo thread in un'altra sezione del forum?? :confused:
Jefferies Burned By Bad Energy Trades - WSJ

The investment-bank unit of Leucadia National Corp. reported it has had losses of $90 million across more than 25 “distressed” energy-trading positions over the nine months ended Aug. 31. The turmoil in the oil and gas business helped push the New York firm’s results lower, Jefferies reported Thursday. In response, the company led by Chairman and Chief Executive Richard Handler said it had slashed its distressed-energy trading exposures by 50% during the quarter that ended Aug. 31. Such moves may make it tougher for heavily indebted energy companies laboring to survive during a roughly 50% decline in oil prices since the peak last year. Thursday, oil-futures prices fell 25 cents to $46.90 a barrel on the New York Mercantile Exchange.

For Jefferies, the results raised some concerns about a tough stretch for the firm’s strategy of staying focused on sometimes-risky trading and investment-banking businesses. The bank posted negative fixed-income trading revenue of $18.2 million, compared with year-earlier revenue of $195.3 million. Equities-trading revenue rose 18% to $203.1 million. Despite “solid results” in some business lines such as equities trading and advising companies on deals, “our overall results are disappointing,” said Mr. Handler and Brian Friedman , chairman of Jefferies’s executive committee, in a statement. “It’s been a tough haul,” said Byron Snider, president and chief investment officer of West Oak Capital LLC, which owns more than 1,163,000 Leucadia shares and manages about $281 million in assets. “I would have thought this would be a great time for Jefferies” with merger activity surging, he said. But Jefferies’s energy business held it back as the oil-price fall led energy companies to slow their capital-markets activity, an area where Jefferies has a relatively large presence. After earning about $180 million in investment-banking fees from energy companies in 2014, Jefferies is on a pace to gather only about one-third of that this year, according to data provider Dealogic. Those figures often don’t capture private financing or restructuring work banks do, which has become a more prevalent part of Jefferies’s investment-banking business, a person familiar with the matter said. “We continue to be committed to our energy clients,” Jefferies said in a statement.

The rough-and-tumble business of commodities trading has hit Jefferies in other ways. Its Bache financial-derivatives and commodities unit lost $77 million during the nine months ended Aug. 31, after losing about $100 million in the fiscal year that ended last November. In April, Jefferies agreed to sell pieces of the business to Société Générale SA. “We are pleased finally to be able to move on,” from the Bache business, Messrs. Handler and Friedman said in their note. They added that there was “no meaningful risk” related to Bache on the company’s books at the end of the quarter. The company’s $430 million acquisition of Bache in 2011 was “a foray into the commodities area at the wrong time,” Mr. Snider noted. Excluding items associated with the Bache exit, Jefferies’s earnings declined 48% to $46.8 million for the quarter through Aug. 31, and revenue fell 27% to $583.2 million.

Jefferies officials noted that trading conditions during the quarter went from bad to worse when concerns about a possible Greek exit from the eurozone yielded to fears that China’s economic problems would trigger a global slump. The result: further “deterioration” of trading volumes and declines in global asset prices. While Jefferies sold to conglomerate Leucadia in 2013 to give it deeper pockets and a more diversified parent company, Mr. Handler has kept the unit scrappy and focused on trading and deals. The firm continues to be regulated as a brokerage firm, which allows it to take risks without the Federal Reserve and other banking regulators raising questions about systemic risk, as is more common now at large banks. Executives at some of these other large Wall Street banks forecast this week that their third-quarter markets revenue would also be under pressure. Bank of America Corp. Chief Executive Brian Moynihan said at an investor conference on Thursday that trading revenue could fall 5% to 6% from the third quarter of 2014, a similar drop to the one that Citigroup Inc. predicted Wednesday.
Other big lenders also have exposure to the energy business through loans. At Jefferies, the firm’s “active role on the distressed debt trading space likely further exacerbated the impact” from broader market volatility, noted analysts at Fitch Ratings, Inc. Thursday. After recent cuts, Jefferies’s exposure to distressed energy stood at about $70 million, but the Fitch analysts said “there remains the possibility for additional losses emanating from the remaining positions.”
La trimestrale di Leucadia è stata piuttosto negativa.
Male soprattutto i risultati FXCM e HRG.
Il management ha comunicato che la crescita del gruppo di lungo periodo non è stata intaccata e che si aspettano significativi miglioramenti nel 2016.
Cosa ne pensate di questa trimestrale?
La trimestrale di Leucadia è stata piuttosto negativa.
Male soprattutto i risultati FXCM e HRG.
Il management ha comunicato che la crescita del gruppo di lungo periodo non è stata intaccata e che si aspettano significativi miglioramenti nel 2016.
Cosa ne pensate di questa trimestrale?


ehh....secondo me il mercato non è tanto d'accordo con loro...:rolleyes:

cosa ne pensi te?

ehh....secondo me il mercato non è tanto d'accordo con loro...:rolleyes:

cosa ne pensi te?

Io non dò molta fiducia al management perchè i numeri di questa trimestrale sono davvero disastrosi e mi aspettavo un commento più analitico.
Il terzo trimestre è stato negativo su tanti fronti, su tutti FXCM e HRG. Mi aspetta vo un pò di chiarezza in più.
Detto questo, credo anche che l'attuale prezzo del titolo sconti questa situazione negativa, forse anche troppo. Sto cercando di capire dove poter entrare per mediare il mio PMC.