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Leucadia National Corporation Message Board

Jaxxxx56 15 posts  |  Last Activity: Aug 25, 2014 3:47 PM Member since: Feb 25, 2000
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  • Reply to

    Past, Present and Future

    by dbraem09 Aug 12, 2014 9:24 AM
    jaxxxx56 jaxxxx56 Aug 25, 2014 3:47 PM Flag

    Should buyout CNA and DO

  • I am a long term holder of LUK and have been an aggressive buyer of shares and puts under $25.

    While LUK is difficult to value - it is becoming increasingly clear that LUK is undervalued. Reasons below:

    If you want to like LUK you have to like Jefferies. Jefferies has a lot of runway and it continues to take share from traditional i-banks while paying higher compensation - I expect this to slowly become more in line with the industry which will result in increased profitibility. The banking business appears to be strong in a world wash with liquidity, strong equity markets, and low interest rates. Jefferies is a stable cash flow generator and Handler has run this company very well - the best times remain ahead as all the effort during the crisis will pay off.

    The rest of the investments are what they are: I hope Nat'l Beef is at a low in the cycle and will improve from here, the kadias (Ber and Gar) appear to be very profitable and growing, etc. The equity investments in KCG and Harbinger seem fine. Linkem - who knows but could be a nice payoff.

    What the market appears to missing is the energy assets and while it is early - LCCE will come to fruition. We need $600M in equity which I beleive can be funded in house if needed - I am sure LUK will search for a partner here and while I am not sure of the return expectations - the makret is giving LUK no credit at all for this. Same with Oregon LNG - which is much harder to forecast.

    I really like Handler and his general disposition - low profile, but confident and aggressive. Assuming the market/world doesn't fall apart - I think long term there is a ton of value here with very limited downside.

  • Reply to

    OK so Now what BOA/Merill

    by jdangelmajer Jul 25, 2014 7:16 AM
    jaxxxx56 jaxxxx56 Jul 25, 2014 10:21 AM Flag

    The Indo outcome while not perfect is a good answer. Royalties up some and 7.5% export tax until smelter 1/3 complete. I beleive this shows good faith from FCX and will help extend the contract longer which will be nice. One more thing is that FCX will divest 20% of its stake to Indo investors. Add in that Rio Tinto will have 40% of production after 2021 and FCX is increasingly less reliable on Grassburg.

  • Reply to

    California Oil Assets are for Sell

    by jaxxxx56 Jul 23, 2014 10:50 AM
    jaxxxx56 jaxxxx56 Jul 23, 2014 12:12 PM Flag

    you know its interesting this target of $12B in debt by FYE 2016....the company has $20B now. FCX's current debt level really doesn't bother me too much barring a financial crisis situation they will have no problem servicing and extending when needed. I'm sure Wall Street will start to focus more on the $12B target as we get closer, but if the stock is getting penalized for its debt level - that is misguided. The company has plenty of levers to pull in order to make this happen if it desires: 1) reduce the $6B+ per year cap ex; 2) sell a portion of Grasberg stake to Ino govt; 3) Sell California producing assets; 4) Sell non-core copper assets. It would not take that much to get there - the heartburn is selling these great assets or foregoing cap ex which will generate future growth.

    The other think that continues to interest me is this idea of a huge year in 2016 when cap ex levels are lower and all this mine/O&G production is ramped up. This is awesome and should allow serious dividends for stockholders BUT lets all hope Copper, Oil, & Gold prices are cooperating at that time!

  • Reply to

    California Oil Assets are for Sell

    by jaxxxx56 Jul 23, 2014 10:50 AM
    jaxxxx56 jaxxxx56 Jul 23, 2014 10:51 AM Flag

    It is becoming more clear that FCX bought Plains at a great value - some of that is partially discounted by the ridiculous price paid for MMR...of course TBD on MMR asset long term value but so far nada. Overall all O&G acquisition has proved to be a very smart move for FCX.

  • pretty clear this is on the table. Whether MLP or direct sell and then paydown debt and bolster GOM assets on O&G side.

  • Reply to

    Buda

    by pr_simpson Jul 23, 2014 8:37 AM
    jaxxxx56 jaxxxx56 Jul 23, 2014 10:40 AM Flag

    saw this - are we doing any drilling in this area. if i recall CHK still has some interests if we drill there...cannot recall?
    also when is earnings?
    thanks

  • Reply to

    Salt and Pepper are missing

    by cold.morning Jul 12, 2014 2:38 PM
    jaxxxx56 jaxxxx56 Jul 18, 2014 11:23 AM Flag

    Thanks for the good info mastermind and besterman. Who is JEF's comp higher - do they need to pay more than the traditional big buldge firms to attract talent? If so i expect this will decline over time assuming JEF continues to build market share and its reputation.

    While I am growing more cautious on the overall market - I am getting more and more bullish on LUK. The other investment banks posted strong earnings as did JEF and I think this will continue. I like the mix of assets LUK has and believe its best days are ahead. JEF helps stabilize earnings and provides deal flow. I think market struggles to understand LUK which is understandable, but this can change if earnings momentum and cash flow gets going.

  • Reply to

    Salt and Pepper are missing

    by cold.morning Jul 12, 2014 2:38 PM
    jaxxxx56 jaxxxx56 Jul 14, 2014 10:58 AM Flag

    A couple of things...1) while National Beef has not been a good investment thus far - it is very early in the game and this could reserve and generate strong cash flow. 2) Handler is transforming LUK to focus more on operations - generating consistent cash flow (primarily through JEF) vs the previous LUK which was very book value oriented. I think this makes LUK less risky and more sustainable, but it will take time to prove out that model.

    I really think at these levels LUK is a bargin, but it will take time to get everything up and running. I understand low dividend makes it hard to wait but if you have a decent long term perspective you should do well here - very underappreciated.

  • Reply to

    It's not like these guys got dumb in a hurry

    by renmanaz Jul 10, 2014 11:31 AM
    jaxxxx56 jaxxxx56 Jul 10, 2014 12:29 PM Flag

    dickey - thats a good observation. I think Handler is more conservative and his number 1 concern is the ongoing operations of Jefferies and does not want to put that at risk with big bets. While I am totally fine with this strategy in the long term - it be a while for the market to give credit because these smaller projects have very little visibility and each one on its own is too small to move the needle.

    LUK seems to be a good value to me and I continue to nibble when shares dip below 25.

  • jaxxxx56 jaxxxx56 Jul 1, 2014 2:22 PM Flag

    It really is hard to understand. For an example to see what L should have done wtih regards to hotels - see what LHO did over the past 5 years. Thats how you buy real estate.

    I think the right play for L is to buyout DO at depressed prices...its a low point in the cycle and long term it is the cash cow you speak of - it also is a business that does take capital and L has plenty.

  • Reply to

    Lack of insider support at Diamond Offshore

    by insiderreporter Jun 18, 2014 3:13 PM
    jaxxxx56 jaxxxx56 Jun 19, 2014 11:11 AM Flag

    Mr Tisch is removing a possible conflict of interest as L will either buy DO outright or substanically increase its stake. He doesn't want to be seen as lining his own pockets. Get ready for this...L has lots of cash and has trouble putting it to useful work. They are also shopping Highmount which will bring in additional cash as well. I would not be suprised at all to see L make a play for all of DO at these levels.

  • Reply to

    Joint Venture with Golden Queen

    by dickeypiper1 Jun 9, 2014 3:56 PM
    jaxxxx56 jaxxxx56 Jun 11, 2014 4:17 PM Flag

    Yes the returns are not astronomical for sure, but then again given the project status and timing neither are the risks. Here was my logic:

    1. I'm in for the same price as LUK even at current mkt cap of $160MM - that gives me a lot of comfort. LUK paid $100MM for 34% -GQM is $160MM for 50%.

    2. The market cap is $160MM - and I think we are looking at $25MM in net income for 15 years which is a 6x p/e. I would say mining p/e (especially for US assets) are about 12x - thats a double. This could be proved up in less than 2 years - I'll take a double in 2 years.

    3. I am assuming that the projections (production and life of mine) are conservative and additional reserves will be found once production starts. We shall see.

    4.No credit being given to aggregate by product - don't know if thats feasible but if so its just gravy. Definitly easy access to economical transportation to strong end user market.

    5. Just me personally, but I beleive Gold price has room to run going forward - we shall see.

    Would like your feedback if you have time.

  • Reply to

    Joint Venture with Golden Queen

    by dickeypiper1 Jun 9, 2014 3:56 PM
    jaxxxx56 jaxxxx56 Jun 10, 2014 12:18 PM Flag

    yes - 15 year project and i think we are 18 months from production. i took a swing at some shares at $1.58 - its a small cap with very little activity (even now) but it is still pretty near its historicaly lows. I have seen LUK be very successful in these early minimg projects with Fortesque and Inment. The price of gold is a little hard to predict, but its worth a shot. I think Joe Orlando who recently retired was the mining guru at LUK and i assume this was on the radar prior to his departure.

  • Reply to

    Joint Venture with Golden Queen

    by dickeypiper1 Jun 9, 2014 3:56 PM
    jaxxxx56 jaxxxx56 Jun 9, 2014 4:58 PM Flag

    Looks like Golden Queen is publicly traded in Toronto under GQM. I have often invested into LUK's publicly traded investments such as Knight Capital and Inmet mining. Very interested in this as the market cap is very low and production should be realized within just over a year. Would be interested if anyone else has a take on a side investment into GQM.

LUK
24.93+0.18(+0.73%)Aug 29 4:03 PMEDT

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