A value investor goes about his craft quietly. No fancy PRs or public media appearances for him. A part of it is tactical, they are constantly on the lookout for underpriced acquisitions and it makes sense to make as little noise as they can in the process. Part of it is also the attitude common to all value investors. Slow and steady, boring businesses and long holding periods are common and patience is the key and this is somehow not compatible with flash and CNBC talking head image (although Buffett has been making more TV appearances lately, and I am willing to chalk it up to his age and fame). Such is the case for the company I wish to highlight today: Leucadia National. In fact, the company’s website is as bland as they come, and good luck finding any photos of Cummings or Steinberg, the two principals of the company, on the internet. And despite sporting a multi-billion dollar market capitalization, there are precisely 0 wall street analysts covering it.

Leucadia National (LUK)

For a greater part of the last decade, an investment made in Leucadia National stock (LUK) in 1990, would have returned better for the shareholders than a comparable investment made in Berkshire Hathaway stock (BRKA) at the same time. The stock has returned over 20% compounded growth since 1979. As such, it feels strange calling Leucadia National as the Next Warren Buffett stock since it already has a terrific history. Like Buffett, Leucadia believes in taking a meaningful stake in the companies they buy. Unlike Buffett, the company has never shied away from investing in new businesses because it falls outside of their circle of competence. They have one of the best due diligence groups in the industry and they excel at finding creative ways of getting a deal done. They are also quite adapt at making lemonade out of a lemon, at times exiting investments at a profit when it appeared unlikely that this is possible (e.g. Wiltel). But best of all, they take a very long term view and are willing to sit on their investments even if the markets around them are falling apart.

Leucadia’s current holdings are quite diverse and include stakes in auto loans, investment banking, mining (copper, iron), wineries, real estate, etc. The theme common to all these holdings is the bargain price they were acquired at. Leucadia does take an active role in managing the companies it acquires which also makes them different from Buffett. In the last one year Leucadia National has been busy acquiring stakes in Americredit and Jeffries even as the financials were melting down.

Leucadia stock is down almost 75% in the last one year and currently trades close to book value, which has also been revised down as the financials and commodities have taken a hit. This level of valuation has been historically a great time to buy Leucadia and as such I have been diligently adding to my positions right now.

Disclosure: Author owns stock in Leucadia National