Leucadia National Corp (LUK, Financial), a New York-based investment company, is often called a “baby Berkshire Hathaway” (BRK.A, Financial)(BRK.B, Financial) for the extensive variety of its holdings for others – mining and drilling, telecommunications, healthcare, manufacturing, real estate and banking and lending, among others.
That was primarily former CEO Ian Cumming’s doing. Initially, his approach was to invest in dozens of companies, most of which could be characterized as struggling, then built them up and sold them. In 2009 and 2010, Leucadia enjoyed returns in excess of 59%.
That is sure to make the clients happy, but Leucadia may have neglected its own portfolio. In the fourth quarter of 2014, for example, it traded in two companies (the only ones in its portfolio), HRG Group Inc (HRG, Financial), a New York-based holding company, and INTL FCStone Inc (INTL, Financial), a New York-based financial services company. Leucadia added to its stake in HRG and reduced its stake in INTL.
In the first quarter of 2015, Leucadia divested itself of INTL, selling its remaining shares – nearly 500,000 – for an average price of $24.31 per share in its only transaction of the quarter. The sale had a -1.5% impact on Leucadia's portfolio.
INTL has a market cap of $697.1 million and an enterprise value of $464.4 million. It has a P/E of 27.3 and a Price/Book of 1.9.
In April, INTL recorded new 52-week highs four times. This month, the U.S. Commodity Futures Trading Commission (CFTC) announced that INTL had been ordered to pay $140,000 because its policies for supervising transfers of positions between customer accounts from 2009 to about midway through 2013 were judged to be inadequate.
The CFTC reported that INTL cooperated with investigators and revised its policies on its own.
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