Leucadia (LUK) is a conglomerate company based in NYC and Utah. The company invests in many different businesses, including wineries, casinos, real estate, medical companies, etc.
Per the 10Q for the period ending 3/31/2009, the company reported total equity of $2.6B. The point of this article is to show how this equity may skyrocket.
Included in Leucadia's many investments is the following:
- Approximately 48.5M shares in Jefferies Group, an investment bank
- Approximately 33M shares in Americredit, an auto loan finance company
- Approximately 278M shares Fortescue, a iron ore company
The Jefferies position had a FMV of $670M at 3/31 - today the position is worth approximately $1B. That is a $330M increase.
The Americredit position had a FMV of $193M at 3/31 - today the position is worth approximately $454M. That is an increase of over $250M.
The Fortescue position had a FMV of $490M at 3/31 - today the position is worth over $800M - $900M. That is an increase of over $300M.
For a company with total equity of $2.6B at 3/31, you will note that the three investments outlined will increase book value by over $800M. Of course, these valuations are always subject to change.
Perhaps these increases in values are already baked into the stock. However, based on the above, I believe you will see a positive quarterly report for Leucadia.
Disclosure: I own no shares of LUK, but I have sold puts on LUK at different prices.
