LUK

Investment Analysis Clubs Saul’s Investing Discussions
1

So I have been slowly generating a 1YPEG score for my all positions. I have 100 to go through so the process is taking a while. Before you gasp in disbelief yes I did say 100. Most of my scoring so far has been around 1.x with the occasional 2.x or 3.x. I’m not overly worried.

Whenever I encounter a 1YPEG score less than 1 I made a deal with myself to quit for the night and call victory - to pick up the task again tomorrow.

LUK is one of those low scoring 1YPEGs. Now, there has been plenty of research around LUK around the Fooldom so I’ll leave it as an exercise to further review/study if the stock makes sense to you. Without further ado:


Leucadia National Corp - LUK

Revenues

2013	2297	2675	2532	2920
2014	2942	2852	3003	2688
2015	3184

Earnings

2013	1.10	.14	.01	.05
2014	.25	.17	.14	-.01
2015	1.00

3/2014	.45
3/2015	1.30

YoY EPS growth = 188.89%

PE = 24.57 / 1.30 = 18.9

1YPEG = 18.9 / 188.89 = .10

Leucadia has seemed to have had a rough go over the past few years. The last time EPS was above 1.00 was in 1Q2013. I’ve read via a few articles on the Fool that they seem to be turning the corner. If that is the case I think we may have a strong candidate here - a slower performer on its way to recovery.

Comments, thoughts discussion would be most welcome.

Cheers!
–Kevin
–Kevin

9 Likes
2

kudos for going throuh this arduous task…
LUK and entire energy industry is interesting… although some of the recent values have disappered.

3

Hey Kevin,

I feel that with companies like LUK, the “mini-Berkshires” if you will, that earnings will always be lumpy. There is no denying that they hit a home run with the FXCM investment which I believe (correct me if I’m wrong) is why the huge jump in earnings occurred last quarter. I’m just not sure if that is sustainable going forward.

There are some very smart people on the Stock Advisor boards that love this company, like gameguru and TMFBuck. But that love stems from a trust in its management. This is one of those companies that you either trust management to keep making great investment choices like FXCM in the future or you don’t. To me that’s what it boils down to.

For more info I would highly recommend the last annual meeting notes on the Stock Advisor board by TMFBuck and gameguru if you have a subscription. They are well-versed on the company and are really keen on LUK’s future.

  • Matt
4

Matt, thank you for the comments and pointers.

I do have a small position in the company. It may or may not go the way of the pruning. For now I’m fine to keep it to see how they do.

Best,
–Kevin