Book Review - Distant Force: A Memoir Of The Teledyne Corporation And The Man Who Created It

Jan. 10, 2014 4:39 PM ETZBH, DHR2 Comments
Xinyun Hang profile picture
Xinyun Hang

I first read about Distant Force, the biography of Teledyne and its founder Henry Singleton, in an article by Geoff Gannon titled "What Would Value Investing 101 Look Like?" Teledyne Corporation was a conglomerate founded in 1960 as an electronics company by Singleton and George Kozmetsky. The company would eventually diversify into such areas as aeronautics, steel, and insurance before breaking itself up into such successor companies as Allegheny Technologies (ATI), insurance company Kemper (KMPR), and of course, Teledyne Technologies (TDY) through a series of spinoffs in the 1990s and early 2000s. During that time, the company's stock gave investors 17.9% annual returns for 25 years, causing Warren Buffett to describe Singleton as having "the best operating and capital deployment record in American business." The reasons for that record are in this book.

That said, Distant Force isn't one of those investing books that neatly gives each concept its own chapter before wrapping up with a nice summary at the end. The author began his career as a metallurgist, and the book focuses heavily on technology rather than finance.

Thus, it is necessary to read between descriptions of rocket nozzles and rolled steel, of managers and mechanics, to understand the basis of Teledyne's extraordinary performance. Once you do so, though, you discover that there were five key factors to this performance-stock buybacks, careful acquisitions, dividends targeted to reward the long-term shareholder, the contrarian ownership of publicly traded securities, and a focus on niche businesses. Studying these factors will help an investor find companies that can deliver returns like Teledyne's.

Stock Buybacks

As head of Teledyne Corporation, Henry Singleton is probably best known for his share buybacks. Between 1972 and 1984, the company bought back over 90% of its shares, or well over 60 million shares. In the same time period, the company's net income per share increased

This article was written by

Xinyun Hang profile picture
My name is Xinyun Hang, though I go by Charles Hang. I'm a value investor who focuses on companies with high free cash flow yields, especially those that are trading at a low EV/FCF (enterprise value to free cash flow) ratio. I live in St. Louis, Missouri, where I am employed as a data quality engineer and study engineering as a graduate student.

Disclosure: I am/we are long BRK.B. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The Amazon links in this article are associated with my Amazon Affiliates account. If you purchase items through those links, I will receive a small commission, but there will be no additional charge to you.

Recommended For You

Comments (2)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.