Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Valhi Seems Like A Tough Way To Seek Value

Holding companies and conglomerates can offer investors an opportunity to take advantage of management expertise and invest in industries/markets that are otherwise difficult for retail investors to access. Companies like PICO Holdings (NASDAQ:PICO), Cosan (NYSE:CZZ), Brookfield Asset Management (NYSE:BAM), Macquarie Infrastructure (NYSE:MIC), and Sprott (SCP.TO) all offer that to some extent, while better-known names like Berkshire Hathaway (NYSE:BRK.A) and Icahn Enterprises (NYSE:IEP) could likewise be considered variations along that theme.

The problem, though, is that these companies can have complicated internal structures, extensive intersegment financial relationships, and only limited voting power for shareholders. Often that leads to companies that are difficult to value and relatively illiquid.

In the...

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