Cahaba Research
Value, growth at reasonable price, long-term horizon

Leucadia National: SOTP Points To 20-30% Upside

Summary: Leucadia National Corp. (NYSE:LUK) is a diversified holding company that has an excellent track record of creating value for shareholders over the last 30 years. Currently the Company is in a period of leadership transition and is under-followed by Wall Street analysts. Valuation has compressed significantly in recent years, which has arguably left Leucadia National undervalued by 20-30%.

Overview: From 1978 to 2012, partners Joseph Steinberg and Ian Cumming built Leucadia National from a near insolvent financial services company with a negative $0.04 book value per share to a $27.67 book value per share (BVPS) diversified holding company. The partners compounded returns to shareholders and Leucadia's BVPS by respectively, 19.3% and 18.2%, largely by investing in distressed...

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