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May, 2000


(written 5/20/00)

Loew's Corp. (LTR) (recent price $54) would appear to meet the value asset criteria suggested by the classic pioneer of bargain stocks, Benjamin Graham, Warren Buffett's mentor. In a "Forbes" issue, 5/1/00, p. 174, it is noted that LTR's stock price has almost been cut in half in the last couple years, due to poor perceptions of some of its subsidiaries' prospects, as this conglomerate has oil-drilling and tobacco company businesses among its holdings, both somewhat out-of-favor lately. According to the "Forbes" analysis, based on the value of its individual companies, plus cash worth $10/share, the LTR mega-business is really worth about $100/share, before any new growth anticipated over the next few years. Only about $25 of that is due to the value of 100% LTR-owned Lorillard Tobacco. Lorillard is not seen as vulnerable to litigation the way some of the larger tobacco companies are. LTR sees its price as undervalued also and so is buying back its own shares, likely to boost per share profits for the publicly held balance.

This enterprise is a holding company run by one of the super-investors featured in John Train's The Money Masters. Train described him as a pragmatist, seeking good value wherever he can find it.

"Value Line," in its 5/19/00 issue, projects a 3-5 year price appreciation potential for Loews Corp. of 105-215%, from the $54 share price. It has a higher dividend (1.9%) than the Standard and Poors 500. Its price-to-earnings ratio (8.8) is only about 1/3 the lofty P/E of that popular index.

Overall, we can give LTR an enthusiastic endorsement.

Recommended Value Asset Site

"Forbes," in its 5/22/00 "Best of the Web" issue, suggests this site: as a source of excellent information on low price-to-value stocks. The site includes "incisive reports, as good as anything from Wall Street," by the site's creator, Dr. Micheal Burry, a neurology resident with an invesments hobby. "Forbes" likes best about its "list of essential finance texts, including thumbnail reviews and links."


Larry is not a professional. Don't take him seriously!

Actually, the investment article provided here is for general information only and should not be considered as professional advice, a solicitation to buy or sell any security, or the Word of God. Investors are encouraged to do their own research while considering their personal goals and circumstances, or consult their own professional financial advisors, before making investment decisions. Neither Larry nor LARVALBUG will be liable for any losses sustained by any visitor to this site.

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