5-Star Stocks Poised to Pop: Leucadia

Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, diversified holding company Leucadia National (NYSE: LUK  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Leucadia's business and see what CAPS investors are saying about the stock right now.

Leucadia facts

Headquarters (Founded)

New York City (1854)

Market Cap

$5.4 billion


Multisector holdings

Trailing-12-Month Revenue

$1.34 billion


Chairman Ian Cumming

President/CEO Joseph Steinberg

Return on Equity (Average, Past 3 Years)



$359.3 million / $2 billion


American Capital Strategies (Nasdaq: ACAS  )

Ares Capital (Nasdaq: ARCC  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 98% of the 1,249 members who have rated Leucadia believe the stock will outperform the S&P 500 going forward. These bulls include All-Star nibs61, who is ranked in the top 10% of our community, and athenamike.

About a month ago, nibs61 tapped Leucadia as a particularly attractive "jockey bet": "This is a gamble on the talented management team they have in place. Their [debt] scares me a little but they have done everything right so far and still have not gone international which could really send this stock soaring if done right."

In fact, by buying up a motley mix of distressed and poorly managed assets, the investing pair of Ian Cumming and Joseph Steinberg have managed to grow Leucadia's book value at a compounded rate of 18.5% over the past 30 years. Of course, it's that kind of value-based, wealth-building performance that draws constant comparisons to an early Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  ) . While Leucadia's big public holdings AmeriCredit (NYSE: ACF  ) and Jefferies Group (NYSE: JEF  ) have turned around nicely since the credit crisis, our community believes the company's portfolio remains significantly undervalued.

With the stock severely lagging its public equity foes American Capital and Ares over the past year, CAPS members like athenamike think Leucadia is too attractive to pass up:

Leucadia is a holding company with several private businesses, like timber mills, wine and a casino, and several publicly traded businesses, like AmeriCredit, Jefferies Group and Fortescue. The dynamic investing duo of Steinberg and Cumming have successfully steered the company through many economic cycles with simply outstanding returns. The current price, around $20, does not give full credit to this investment's potential.

What do you think about Leucadia, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!  

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Berkshire and Leucadia are Motley Fool Stock Advisor picks. Berkshire is also a choice of Inside Value, and the Fool owns shares of it. 

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (1) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 04, 2010, at 6:04 PM, reddingrunner wrote:

    nice timing- this came out right about at LUK's low, at the moment it's up about 35% since Aug 25! (It's my second largest holding after Apple).

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