Don’t you hate those ultra-slick CEOs? The hucksters out there who are constantly promoting their companies… even when they know their business is failing?
If you hate the hucksters, you will love Jim Tisch…
“We’re a failure at promoting [our] stock,” Loews Corp (L) CEO Jim Tisch told Bloomberg in an interview back in May.
I personally love that about Loews…[ad#Google Adsense 336×280-IA]It is partly why I have a “buy” recommendation on Loews in my True Wealth newsletter.
With a “buy” on Loews, naturally I was happy for our readers that the company hit a 52-week high on Friday.
But this week, Jim held a conference call for shareholders… And the stock is now down 5% as a result.
He could have tried to sugarcoat things in that call. But no…
He told investors he’s “very concerned” about the global economy. He said: “In the United States, we’ve got 1.5 percent economic growth, the euro zone is not growing, the emerging markets are not emerging as fast as they had been before.”
Those negative quotes made the headlines…
But Jim did report some good news, too. It was just brushed under the carpet by reporters. Here was the good news:
I find it actually quite extraordinary that we find ourselves with attractive investment opportunities at the subsidiary level in view of just how poorly I think the U.S. economy and the global economy is doing…
Whether it’s Diamond Offshore seizing an opportunity to upgrade its fleet, or Loews Hotels adding and upgrading assets in profitable Florida, California, and New York City markets, or CNA expanding its global footprint with its acquisition of Hardy, Loews’ subsidiaries have been making attractive, strategic acquisitions…
Jim’s goal is not to sell more widgets. His goal is to increase the per-share value of Loews over the long run.
One way he’s doing that is by buying back shares. This way, each remaining share owns a larger piece of the “pie.”
Since he took over as CEO in 1998, he’s reduced the number of shares outstanding by nearly one-third. That’s a huge share change. This latest quarter was no different… Jim reported he bought back about 1.3 million shares of Loews stock. Jim buys back stock when the stock is trading at a discount to its liquidation value – like it is now.
Jim explained to Bloomberg how he feels about Loews’ discount to liquidation value:
The angel [on my left shoulder] says, ‘Explain the Loews story to everyone; tell them about the discount. Then the devil [on my right shoulder] is whispering, ‘Don’t do anything. Just file the 10-Ks, and the stock will remain cheap for you to buy back.’
Jim is an investor for the long term. He is finding opportunities in the crisis… including in shares of his own stock.
And as I explained recently in DailyWealth, he’s quietly beaten the world’s greatest investor for 13 years. But you don’t hear much about him. He’s not a huckster, out there doing self-promotion. He’s simply doing the right things to increase the long-term value of his shares.
Right now, his stock is still cheap. So it’s a strong buy in my True Wealth newsletter.
Check out shares of Jim Tisch’s Loews Corp (L) today.