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Leucadia National Corporation Message Board

mastermind_not 27 posts  |  Last Activity: Feb 9, 2016 4:48 PM Member since: Apr 23, 2010
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  • mastermind_not mastermind_not Feb 9, 2016 4:48 PM Flag

    FLY can't be sold without a buy-out and termination of the BBAM management contract. It's conceivable, but I don't see it happening because BBAM is fat and happy with its FLY arrangement. Why let someone else buy your cash cow without a huge premium?

  • Reply to

    FLY vs comps

    by mastermind_not Jan 27, 2016 3:16 PM
    mastermind_not mastermind_not Feb 9, 2016 4:46 PM Flag

    Revisiting this old thread. Man, I looked up and AER has been absolutely *hammered* the last couple months. It used to be the largest position in my portfolio. Then it tanked 50%. Ouch!

    FLY hasn't run up; but it hasn't fallen hard like its industry peers. It has just bumped along (and keeps bumping along).

  • mastermind_not mastermind_not Feb 9, 2016 12:32 PM Flag

    No doubt. Horrific timing. We'll learn more about those investments with the 2015 financials. I'm hoping that they hedged the production in some way to limit the downsize risk. But we'll see...

  • Reply to

    FLY vs comps

    by mastermind_not Jan 27, 2016 3:16 PM
    mastermind_not mastermind_not Jan 28, 2016 1:53 PM Flag

    main, I was saying that FLY may have outperformed AL (Air Leasing) over the past three years from a total return perspective. (Not AYR, AL ... I don't think that AL pays dividends, but I'm not sure.)

  • Reply to

    Fly is a Buy!

    by zjdc Jan 22, 2016 2:51 PM
    mastermind_not mastermind_not Jan 27, 2016 3:25 PM Flag

    Yes, mainman, ha. I've been complained about outsourced management for a long time.

    The point is that FLY has always suffered from a bigger market discount (discount to book) than its peers. Sure, BBAM has made some good decisions along the way, thus driving good but lumpy shareholder returns in some periods. But the market has never been persuaded that the outsourced management model is good for shareholders. Otherwise, FLY's competitors would not trade at such a premium to FLY (whether measured by BV, P/E, etc.).

    All that said, I just posted relative performance numbers, and FLY has performed "better" in the last 12 months because the others had farther to fall. All the aircraft lessors are getting punished along with the banks and other financials generally. So 2016 should be interesting.

  • mastermind_not by mastermind_not Jan 27, 2016 3:16 PM Flag

    Interesting. I'm doing some graphing on Morningstar's website.

    Last 1 month ... FLY down 13%, AYR down 19.5%, AL down 26%, AER down 30%

    Last 3 months ... FLY down 12.6%, AYR down 22.6%, AER down 23.7%, AL down 23.8%

    Last 12 months ... FLY down 14.9%, AYR down 12.7%, AER down 22%, AL down 25%

    However, over last two and three years, FLY has underperformed:

    Last 3 years ... FLY down 9.1%, AL up 10.3%, AYR up 41%, AER up 117%

    Of course, including dividends for a "total return" perspective, FLY was likely in positive territory and might have outperformed AL; I don't have time to do the math.

  • Reply to

    Fly is a Buy!

    by zjdc Jan 22, 2016 2:51 PM
    mastermind_not mastermind_not Jan 25, 2016 2:10 PM Flag

    Amen to that. Unfortunately, management owns a big chunk of the company and has an outsize influence on the Board of Directors. So the former seems unlikely, and the latter seems even more unlikely. But one can hope...

  • mastermind_not by mastermind_not Jan 20, 2016 3:14 PM Flag

    Interesting day. Despite the market bloodbath, LUK is up on 3x normal volume. I don't have time to check other financials, but GS is down a percent or two (after earnings).

  • Reply to

    Tender Awful

    by mastermind_not Jan 19, 2016 4:47 PM
    mastermind_not mastermind_not Jan 20, 2016 2:49 PM Flag

    Hopefully the timing is better on the $25m stock repurchase. And hopefully they bump up the repurchase amount and buy more at these levels...

  • mastermind_not by mastermind_not Jan 19, 2016 4:47 PM Flag

    Nice use of capital. Buy at $13.95 in a tender awful. Stock now down in the low $11s.

    Obviously, the market overall has sold off; and financials have been hard hit, including the other aircraft lessors. But the outsourced management team has consistently failed to add value through its "financial engineering" solutions. How about: internalize the management team so they become fully aligned with FLY shareholders? And end the conflict of interest with BBAM seeking to maximize BBAM origination fees (transaction fees)? How does the FLY board of directors justify this prolonged underperformance and capital allocation weakness?

  • Reply to

    LUK's Golden Queen Mine

    by nol_deal Jan 5, 2016 9:18 AM
    mastermind_not mastermind_not Jan 15, 2016 1:50 PM Flag

    I haven't had time to focus on Golden Queen itself -- the OTC listed company. Do those shares have potential significant upside? My understanding is that LUK is providing some kind of priority financing, so the publicly floated shares are probably way subordinated in the cap structure. Economically, probably a cheap option and fairly levered to the price of gold.

    Anybody looked at this?

  • Reply to

    Memory Lane

    by tthemainman38 Jan 8, 2016 11:58 AM
    mastermind_not mastermind_not Jan 11, 2016 12:40 PM Flag

    I still think it's revisionist history. Go read the old transcripts. Barrington used to complain about the huge discount to book value; but they refused to repurchase shares in the $11/12/13 range because it would diminish the float too much.

    Sure, BBAM was opportunistic during the worst of the financial crisis. But the outsourced management model is the problem here, not Onex per se. Look at the competitors; do any of them have an outsourced management team?

  • Reply to

    new letter from handler out today

    by besterman2006 Jan 8, 2016 2:19 PM
    mastermind_not mastermind_not Jan 8, 2016 3:31 PM Flag

    Thanks for the head's up. As usual, pretty fluffy, but interesting historical framework/lens to keep current market events in context. I wouldn't say "brain dead" by any means.

  • Reply to

    below $16...

    by robpeters1994 Jan 8, 2016 3:16 PM
    mastermind_not mastermind_not Jan 8, 2016 3:18 PM Flag

    Amen to that. The market obviously does not believe in Team Handler's capital allocation skills. They need to focus on improving the JEF business and using excess cash to repurchase shares.

  • Reply to

    Look at a 5 year chart and see....

    by hoopsyah Jan 8, 2016 12:44 PM
    mastermind_not mastermind_not Jan 8, 2016 3:16 PM Flag

    That's painful, but does it account for "total return" including dividends?

  • Reply to

    Memory Lane

    by tthemainman38 Jan 8, 2016 11:58 AM
    mastermind_not mastermind_not Jan 8, 2016 3:15 PM Flag

    The management structure has not changed over the years. BBAM has always been the "outsourced" management team; and the individual players at BBAM have not changed (Zissis, Barrington, etc.).

    Remember that the outsourced CEO, Barrington, argued that he could not repurchase shares in the $11/12/13 range because it would diminish the public float too much. So I think you guys are engaged in some revisionist history. Sure, BBAM pulled the trigger on some no-brainer moves during the financial crisis. But they haven't been great since before Onex came on the scene.

    Ultimately, the market doesn't like the outsourced management model. It will take a shake up of the Board of Directors to change that model. For now, BBAM and Onex (as a passive investor in BBAM) are incentivized to generate transactions and transaction fees over creation of FLY shareholder value.

  • mastermind_not mastermind_not Dec 26, 2015 8:11 PM Flag

    Yes, in at least a couple instances, FLY announced that it was terminating the dividend (and effectively accelerating return of capital to shareholders through the tender and market stock repurchases).

  • - Energy Transfer Equity, Energy Transfer Partners and BG Group say they have received approval from the FERC to site, construct and operate a planned natural gas liquefaction and export facility in Lake Charles, La.

    - The Lake Charles LNG project would be one of the largest LNG export initiatives in the U.S.; if built to full capacity, it would be capable of exporting as much as 2B cf/day of natural gas per day, or ~15M tons/year of liquefied natural gas.

    - Energy Transfer will provide pipeline services to the plant, while partner BG will build the facility and handle the gas it liquefies.

    - The companies expect to make a final investment decision in 2016, but a final go-ahead is far from certain given the glut of LNG export capacity due to come online and low prices eating into margins the projects were expected to capture.

  • Reply to

    one more day to make your decision

    by vanmusicblues Dec 14, 2015 11:54 PM
    mastermind_not mastermind_not Dec 15, 2015 2:31 PM Flag

    Hopefully $14.25 ... I bought some trading shares last week and tendered at the max tender price...

  • Reply to

    more write downs coming?

    by dickeypiper1 Dec 7, 2015 3:52 PM
    mastermind_not mastermind_not Dec 9, 2015 1:20 PM Flag

    dickey,

    Big picture: (1) I believe that LUK has been currently expensing its pursuit costs for Oregon LNG, but agree that yes, seems like abandonment will be inevitable given the energy markets; (2) not sure about the hedge funds, but in October (investor call) they were doing okay; (3) JEF has always been levered to energy, but I believe Handler mentioned that the worst days have already run through the P&L (but you never know until you see the numbers).

LUK
14.39-0.53(-3.55%)11:36 AMEST