Leucadia Update

In September 2016, I thought Leucadia was worth somewhere between $27-$32. At the  time, it was trading around $19, having bounced off of of lows in the summer. The company was still under-earning, although some of the winds had started to shift.

Earlier last month, the company put out an investor presentation (link), and I came across this well-reasoned article in SeekingAlpha, which pegs the intrinsic value around $33.

I updated my SOTP analysis, and come up with a fair value near $32.

Screenshot from 2017-11-10 07-37-11

The discount to intrinsic value has narrowed considerably from 50% ($19 versus $30 in 09/2016) to about 20% ($26/$32). The intrinsic value itself has improved marginally, mostly on the backs of improvements at National Beef and Berkadia.

The dividend has also been increased by 60% from 25c/share to 40c/share. At current prices, this implies a yield of over 1.5%.

I continue to hold.

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