Leucadia National (Trades, Portfolio) is an American holding company that is engaged in mining and drilling services, telecommunications, healthcare services, manufacturing, banking and lending, real estate, and winery businesses. The company is sometimes called a "baby Berkshire Hathaway" (BRK.A, BRK.B) for the wide range of its holdings.
The current chairman is Joseph Steinberg and chief executive officer is Richard Handler
At the end of Q1 2015 Leucadia sold out INTL FCStone Inc(INTL).
INTL FCStone is a financial services group specialized in commodity trading which provides a comprehensive range of customized financial services and tools to help its clients to protect their margins and manage volatility. It also provides foreign exchange and treasury services, securities execution, trading services.
Its vision is that every company — regardless of size, industry and how long it's been in business — deserves access to the best advice and the best products.
The company has a profitability & growth rated 3/10. Return on equity (ROE) is 9.07% and return on assets (ROA) is 0.94%. Growth rates over the last three years are negative: revenue had a negative growth rate of 24.20% and EPS had a negative growth rate of 20%. In the last quarter net income was up 73% compared to the same quarter of the last year, and diluted EPS for the quarter was up 72% over a year ago.
Over the last year the price rose by 89% (81% year-to-date) and is now trading with a P/E(ttm) of 22.50 and a forward P/E of 14.53. The price is near its 52 weeks high (-2.32%) and is +120% from its 52 weeks low.
After Leucadia National (Trades, Portfolio) sold out its shares of INTL, the price rose by 34%.
The company core business is divided in five main segments :
The largest segment of the company, Commercial Hedging, had a very strong quarter with revenues up 50% and segment earnings up 106% versus a year ago. The most notable change was an $18.9 million or 110% increase in the Securities segment operating revenues. Within this segment, equity market-making revenues increased $6.9 million versus the prior year as transactional volumes increased 53%. Segment income increased to $24.9 million in the first quarter compared to $12.1 million in the prior year.
Even so last quarter was all about the previous segment; this quarter is mostly about the Securities business’ segment which provide value-added solutions that facilitate cross border trading in the equity markets. The Securities segment was up 221% over a year ago because the equity market-making business nearly doubled its revenues.
Another segment is Physical Commodities which provides competitive and efficient clearing and execution of exchange traded futures business, continued to improve nicely with the reworking of the precious metals groups. As a result of a 48% increase in foreign exchange volumes, operating revenues increased 41% to $5.2 million and the segment income increased to $3.6 million.
Global Payments, which provides global payment solutions to banks and commercial businesses, continued its strong volume. It recorded the second-largest increase in this quarter as transactional volumes increased 101% compared to the prior year.
Clearing and Executions Services, which provides competitive and efficient clearing and execution of exchange traded futures Commission and clearing fee revenues, increased to $24.8 million. As a result of the increase in operating revenues, segment income increased to $3.6 million in the first quarter compared to $1.3 million in the prior year.
With an increase in market volatility driving both an increase in customer volumes and spreads they continue to see an improving trend line in their results which should be enhanced with the addition of the GX Clarke business in the second quarter.
The company will continue to adopt a cautious approach and will only proceed with acquisitions that fit in with their client-first culture, their client relationships and/or capabilities that they don't have and are priced appropriately.
