L - Loews

[nwoodman]

Reasonably large acquisition

http://ir.bwpmlp.com/phoenix.zhtml?c=193443&p=irol-newsArticle&ID=1617709&highlight=


"HOUSTON, Oct 17, 2011 (BUSINESS WIRE) -- Boardwalk Pipeline Partners, LP (NYSE:BWP) announced today that it has formed a joint venture with an affiliate of its general partner, which has entered into a definitive agreement to acquire Petal Gas Storage, L.L.C. and Hattiesburg Gas Storage Company and related entities from Enterprise Products Partners L.P. for $550 million in cash (subject to customary adjustments)."

"Boardwalk expects that the joint venture will fund this acquisition with proceeds from a $200 million 5-year bank loan and equity contributions from Boardwalk and an affiliate of its general partner, Boardwalk Pipelines Holding Corp. (BPHC), a wholly-owned subsidiary of Loews Corporation (NYSE: L). BPHC will own 80% and contribute $280 million of the joint venture's equity and Boardwalk will own 20% and contribute $70 million. The acquisition is expected to close in the fourth quarter of 2011 subject to customary closing conditions, including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act."

[nwoodman]

Q3 Results not awe inspiring but at least headed in the right direction

+2% increase in book value for the quarter to $47.75
-1.8% decrease in shares outstanding to 397.4m

CNA -  seems to be on the improve NWP +8% (hope its rational pricing)
DO - good utilisation rates
BWP - acquisition and new projects

http://ir.loews.com/phoenix.zhtml?c=102789&p=irol-newsArticle&ID=1623517&highlight= 

[nwoodman]

Hope this doesn't come across as a spruik (3 posts in a row and all), however I really  enjoyed this graph. As a holder of Berkshire, I would love to see a similar graph of buybacks one day and no doubt we will


http://ycharts.com/companies/L/price_to_book_value#zoom=10&comp=shares_outstanding

[biaggio]

interesting comments from Tisch on earnings call today,

http://seekingalpha.com/article/344321-loews-ceo-discusses-q4-2011-results-earnings-call-transcript?part=qanda

1. CNA reporting improvement in pricing for P&C insurance

2. On Natural gas : "with gas trading at $3.5 or $4, the industry was going to operate at minus $25 billion cash flow. I mean, they were going to have to raise $25 billion outside sources. And now spot gas prices at $2.50 and hedges running off for E&P companies, I think there -- in some boardrooms, there's concern that's moving to fear that's going to move to panic.And I think that the decline in rigs is just one symptom of that. Now we'll have to see how this all plays out over the next 6 months to a year, but it looks like we are going to end the heating season with record amounts of natural gas that's going to put some pressure on natural gas prices"

[misterstockwell]

Does anyone have historical numbers of Loews price vs. the value of the publicly traded holdings? Today, CNA+DO+BWP = 35.55/L share. I wonder where the ratio extremes lie? Anyone?

[zarley]

I haven't done that analysis, but looking at historical P/B ratios I see a normal range from 0.6x to ~1.5x.  There was an extreme low around 0.4x in 2009 after an extreme high in 2008 around 1.7x.

Current P/B is around 0.8x.

Given that BV per share has grown in the high single digits, if that continues and P/B moves back up to 1.0x in three years, you would see mid-low teens growth from $38 to ~$60.  Overshooting 1.0x on P/B back to some historical normal high, would obviously be a nice cherry on top.


CNA's underwriting has improved in recent years, but investment income is hampered by the low rate environment.  Plus, the natgas exposure is a real wildcard.  It's so low right now, and much lower than when L bought a lot of their assets there.  Does it stay below $3-4 or does it move back up to high single digits?  Can we dare to dream of double digit natgas prices?

It's a full position for me (~12%), but maddening to watch.  The non-answers about Q4 stock buybacks on the conference call was curious.  It may mean that they have something in the works for their excess capital, or it may just be a sit and wait approach from management.

[Liberty]

A little while ago someone (sorry, can't remember who) posted this spreadsheet:

https://docs.google.com/spreadsheet/ccc?key=0ApYtMgkh8FHjdHNvVHZJUk51QjNzZ3doSkxjaTlweHc#gid=1

[misterstockwell]

Thanks Liberty--that helps

I went back four quarters and it seems that the public traded stubs trade at 87-90% of the price of L. It's 92% now. Those are only 4 data points though. I can use that spreadsheet daily now to see how it compares.

[bttmline]

Yeah that is my spreadsheet. I just updated after last qtr update and should be realitively accurate. Valuation of private subs is obviously subjective. Ill add a calculation as a percentage of public sub to market cap.
Also, the idr from boardwalk to the GP (ie Loews) should start to become meaningful and I just haven't looked for the number in a while. It was asked on the conf call , but not sure it was answered.

[dcollon]

bttmline,

Thanks for sharing the spreadsheet.