Joe Steinberg, together with his partner, Chairman and CEO Ian Cumming has run the company for more than 30 years. The return on equity over the years has averaged more than 20% a year. The partners are devoted to distressed investing. They buy distressed companies at deep discount, then they either fix the problem and sell or hold until they sell at better prices. Most recently, Leucadia partnered with Warren Buffett’s Berkshire Hathaway Inc. created a partnership to acquire real estate-related assets owned by Capmark Financial Group, according to Bloomberg news.
Joe Steinberg and Ian Cumming each about 10% of the company, at around 23 million shares. Interestingly, they seem to be pretty good at timing the buying and selling their own stocks. In May of 2007, Mr. Cumming bought 100,000 shares of LUK at $34.56 a share. He sold 650,000 shares on June 4, 2008 for $48.95 a share. Five months after the sale, the share price dropped to below $18. Another five months later, in March of this year, the share price dropped to around $10. On the same day Mr. Cumming sold his shares, Mr. Steinberg sold 400,000 shares. Now Mr. Steinberg is selling again, about 3.5% of his total shares at $25 a share.
Leucadia is very popular among value Gurus. In the second quarter, Third Avenue Management owns 3,621,198 shares as of 06/30/2009, an increase of 25.47% from the previous quarter. This position accounts for 1.75% of its $4.36 billion portfolio. Tom Gayner owns 323,400 shares as of 06/30/2009, an increase of 16.25% from the previous quarter. This position accounts for 0.62% of the $1.11 billion portfolio of Markel Gayner Asset Management Corp. It is also owned by Mohnish Pabrai, Tweedy Browne, Ruane & Cunniff & Goldfarb, Fairfax Financial Holdings, and Bruce Berkowitz etc.
Bruce Berkowitz has spoken highly about Ian Cumming and Joe Steinberg. "Relatively unknown, Ian Cumming and Joe Steinberg have compounded Leucadia’s book value per share at over 20% per annum since they took control of the company in 1978." He wrote in 2002. That is why he invests in Leucadia. He even borrows ideas from Leucadia. The most recent he borrowed is AmeriCredit (ACF), which Leucadia is the largest shareholder of the company, owning 30% of total shares.
Leucadia is also popular among our users. There were extensive discussions about the stock. Now the president of the company is selling large chunk of shares. Will you?