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The "New" Buffett Is Buying Mueller Industries

September 14, 2011 | About:
matsandalex

matsandalex

9 followers
Many people view Ian Cumming of Leucadia National (LUK) as a modern day version of Warren Buffett.

In recent days, Cumming and his holding company have been loading up on shares of Mueller Industries (MLI).

Mueller manufactures copper, brass, plastic and aluminum products. It operates in two segments, Plumbing & Refrigeration, and Original Equipment Manufacturers (OEM).

Last week, Leucadia and Mueller entered into a standstill pact. Leucadia, which had a 20.5% stake in Mueller as of August 10, has agreed to own not more than 27.5% of the company's stock. Essentially, the pact prevents Leucadia from a hostile takeover of Mueller.

As of the end of the first quarter of 2011, Mr. Cumming initiated a position in MLI. He bought 1.7 million shares at an estimated average purchase price of $33.33 per share. Cumming was accumulating shares on almost a daily basis in August 2011.

In many ways, Mueller might be a bet on the U.S. housing market. Mueller is a cyclical company that rises and falls with the fortunes of the home building industry. Perhaps Leucadia feels that a housing recovery is just around the corner.

Rating: 3.5/5 (6 votes)

Comments

tonyg34
Tonyg34 - 2 years ago
did JEF decide to stop issuing shares? or has Cummings re-learned something about diversification. Either way the guy wins the contrarian award; a boutique wall st. broker-dealer and a housing play. And he sold large positions in metals and mining companies to get there.
mo77
Mo77 - 2 years ago
Ian Cumming is 70 years old along with his partner Joseph S. Steinberg (67 years old) having been allocating capital for over 30 years. I would hardly qualify him or Steinberg as a modern-day Buffett, they are closer to being contemporaries.
jdleon
Jdleon - 2 years ago
if you look at the housing boom 2003 to 2006. MLI did well, but not extremely well. House builders are better bet if Ian wants to long U.S. housing market.

to me, i dont see mli anymore attractive than other big cap that are under book value: c, bac, gs, jef, jpm

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