Sum of Parts

In a world with perfect market efficiency, if a company owns only publicly listed stock, the value of the firm should approximate the value of the stock it owns. But this does not hold in the real world. Many closed end funds are now trading below their NAV for the past 6 months, and some companies which holds publicly traded stocks are also trading at such level.

One such example is LOEWS, a holding company that has built up bookvalue and shareholder value for over half a decade. The Tisch family is said to be one of the smartest value orientated business manager/owner, and also has donated generously to the different causes. Btw, the Tisch gallery at The Mets is splendid.

The value of Lows is the sum of their majority holding in 3 public company, holdings in 5 unquoted companies, and corporate cash & investment less corporate debt. Without attempting to value the unquoted companies, the value of firm is 12.3 Bn and the market cap is 10.4 bn.

This works out to a price to value of about 0.85.

On a per share basis, the value per share is 28.3 and the share price is 24.03.

And this is not counting the values of HighMount, with proven resources of natural gas, and other investment in Boardwalk, and CNA. Furhtermore, it could be argued that the public company that Loews holds is undervalued. CNA for instance is trading at Price to Book of about 0.6.

Warning: I'm NOT recommending this stock. Just that simple +-x/ shows that it is likely that the stock is undervalued.