Leucadia National (LUK, Financial) just bought about 5 million more shares of Jefferies Group (JEF, Financial), bringing the total position to about 54.5 million shares for Leucadia’s equity portfolio. The average cost per share is about $24.25. Leucadia now owns more than 30% of Jefferies’ total shares outstanding. Leucadia National is run by two excellent investors, Chairman Ian Cumming and President Joe Steinberg. Both of them own Jefferies’ shares in their personal portfolios, too. Ian Cumming owns more than 14.6 million shares, and Joe Steinberg owns 14,485 shares. The two great investors have grown Leucadia’s book value by more than 25% a year for more than three decades. Their secret to success is “never overpay.” This is what they wrote in their shareholder letter:
We tend to be buyers of assets and companies that are troubled or out of favor and as a result are selling substantially below the values, which we believe, are there. From time to time, we sell parts of these operations when prices available in the market reach what we believe to be advantageous levels. While we are not perfect in executing this strategy, we are proud of our long-term track record. We are not income statement driven and do not run your company with an undue emphasis on either quarterly or annual earnings. We believe we are conservative in our accounting practices and policies and that our balance sheet is conservatively stated.
Jefferies Group Inc. has a market cap of $4.39 billion; its shares were traded at around $24.72 with a P/E ratio of 16 and P/S ratio of 1.6. The dividend yield of Jefferies Group Inc. stocks is 1.2%.
Ian Cumming and his partner Joe Steinberg have been very confident on Jefferies. This is what they wrote in 2009 about the company, when the financial crisis was at its peak:
In 2000, Leucadia and Jefferies entered into a joint venture to trade high yield debt. We invested $100 million and received for the next seven years an average return of 20% per annum. In 2007, Leucadia and Jefferies formed Jefferies High Yield Trading, LLC (JHYT) a registered broker-dealer that engages in the secondary sales and trading of high yield and special situation securities. Each company has invested $350 million and has no current plans to invest more. In the midst of the financial meltdown JHYT survived pretty well by avoiding dangerous and highly leveraged situations and by remaining very liquid. Our return for 2008 was minus 20%. We hope for better results in 2009.
We have known Jefferies for a very long time and are particularly fond of and hold in high regard its long time Chief Executive Officer, Richard B. Handler. We believe that over the long haul Jefferies will survive and grow to enrich their shareholders!
Apparently Ian Cumming and Joe Steinberg think that Jeffries shares are worth much more. They are buying more of the shares to Leucadia’s equity portfolio. They also own large positions in their personal portfolios. Currently Leucadia is on a 40% profit with its position on Jefferies.
We tend to be buyers of assets and companies that are troubled or out of favor and as a result are selling substantially below the values, which we believe, are there. From time to time, we sell parts of these operations when prices available in the market reach what we believe to be advantageous levels. While we are not perfect in executing this strategy, we are proud of our long-term track record. We are not income statement driven and do not run your company with an undue emphasis on either quarterly or annual earnings. We believe we are conservative in our accounting practices and policies and that our balance sheet is conservatively stated.
Jefferies Group Inc. has a market cap of $4.39 billion; its shares were traded at around $24.72 with a P/E ratio of 16 and P/S ratio of 1.6. The dividend yield of Jefferies Group Inc. stocks is 1.2%.
Ian Cumming and his partner Joe Steinberg have been very confident on Jefferies. This is what they wrote in 2009 about the company, when the financial crisis was at its peak:
In 2000, Leucadia and Jefferies entered into a joint venture to trade high yield debt. We invested $100 million and received for the next seven years an average return of 20% per annum. In 2007, Leucadia and Jefferies formed Jefferies High Yield Trading, LLC (JHYT) a registered broker-dealer that engages in the secondary sales and trading of high yield and special situation securities. Each company has invested $350 million and has no current plans to invest more. In the midst of the financial meltdown JHYT survived pretty well by avoiding dangerous and highly leveraged situations and by remaining very liquid. Our return for 2008 was minus 20%. We hope for better results in 2009.
We have known Jefferies for a very long time and are particularly fond of and hold in high regard its long time Chief Executive Officer, Richard B. Handler. We believe that over the long haul Jefferies will survive and grow to enrich their shareholders!
Apparently Ian Cumming and Joe Steinberg think that Jeffries shares are worth much more. They are buying more of the shares to Leucadia’s equity portfolio. They also own large positions in their personal portfolios. Currently Leucadia is on a 40% profit with its position on Jefferies.
