NYSE:LUK
$22.01
(2/9 2:00PM)
+1.3%
| Open | $22.22 |
Mkt Cap | $5.3 Billion |
| High | $22.4 |
52Wk High | $26.47 |
| Low | $21.72 |
52Wk Low | $10.26 |
| Volume | 586,959 |
Avg Vol 10D | 916,100 |
Ockham's Rating/Recommendation Summary
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LUK Revenue
As a value investing shop, we are interested in seeing how LUK's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 10.67x and the low end of the range at 5.31x.
With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for LUK of 5.88x is well below its normal historic Price to Sales levels. At a price of $21.95, LUK is 27% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.
LUK Cash Earnings
LUK is not forecasted to produce positive Cash Earnings this year, based on recent performance. This is not a positive situation, as we would always prefer that a company is producing cash every year. However, it is important to recognize that not all companies or types of companies have the goal of producing positive Cash Earnings either early in their business cycle or following significant turnaround changes. When looking at LUK, we hesitate to be overly negative on the company, but it is of concern that the company is not profitable at this time.
Let's face it, companies cannot remain unprofitable for very long before a change has to be made. This could mean further restructuring or corporate event such as selling assets or spinning off divisions, at any rate a company with negative cash flows is not one that often makes a great investment unless you can acquire it at an extremely depressed price.
LUK Dividends
A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don't require dividend payments for company's whose management has elected to forgo them entirely.
Leucadia National Corporation (LUK) Discussed on Fox Business's Fox Business
Leucadia National Corporation is in the news. Find out how this impacts LUK trading on Ockham Research.
New positions in the first quarter of the year, were american companies, warehousing. >> what is interesting. >> brian: start with LEUCADIA. That's the most interesting. You're basically investing with >> exactly, LEUCADIA is a company of brilliant investors. LEUCADIA is not an expensive last time it was chief 1999, a decade ago and 2009, the option to buy LEUCADIA, the big attraction of LEUCADIA is not the sort of complexity with investments, they make investments which are incredibly cheap, when they can establish a
“… tors. LEUCADIA is not an expensive last time it was chief 1999, a decade ago and 2009, the option to buy LEUCADIA, the big attraction of LEUCADIA is not the sort of complexity with investments, they make investments which are incredibly cheap, when they can establish a …”