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Author: robinstarveling Two stars, 250 posts CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 109  
Subject: subs n' stubs Date: 10/21/2012 12:19 PM
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90% of CNA = 7B
50% of DO = 4.9B
66% of BWP = 3.9B

dividing by 400m shares = $39.50/share

Plus about $9/share in cash and investments, plus $3.50/share for HighMount, plus the hotels, plus the Boardwalk general partnership.


Current share price: $42.51.
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Author: chasb Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 72 of 109
Subject: Re: subs n' stubs Date: 10/21/2012 6:54 PM
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Care to explain CNA, DO, & BWP? Thanks.

Charlie Brown

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Author: rationalwalk Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73 of 109
Subject: Re: subs n' stubs Date: 10/22/2012 8:46 AM
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The stub isn't as cheap as it was earlier this year but it is still cheap. Loews is one of those values hiding in plain sight.

The writedowns at HighMount due to low natural gas prices may be part of the reason Loews shares aren't higher ... and those writedowns will never reverse even if natural gas heads higher in the years to come.

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Author: robinstarveling Two stars, 250 posts CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 74 of 109
Subject: Re: subs n' stubs Date: 10/22/2012 9:03 AM
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Care to explain CNA, DO, & BWP?

These are the publicly traded majority-owned subsidiaries of Loews (the "subs" of my post's title): a mediocre insurer, a fairly well-run offshore driller, and a solid midstream MLP involved mostly in natural gas.

http://investor.cna.com/phoenix.zhtml?c=104503&p=irol-ir...

http://www.diamondoffshore.com/investors/investors_overview....

http://ir.bwpmlp.com/phoenix.zhtml?c=193443&p=irol-irhom...

It's conveniently straightforward to add up the market price of Loews' share of these companies. At the moment, that comes to a little under $40/share (depending whether any share repurchases have been done this quarter--they tend keep such things pretty close to the vest). However, Loews also owns a few hotels and an onshore E&P outfit, and there's some change under the couch cushions as well, so liquidation value is a good bit north of the market price.

The conglomerate discount is particularly marked in the case of Loews despite a multi-decade history of market-beating returns (delivered largely through reducing the share count). Adding up the prices of the subs is a useful quick-and-dirty check on how big that discount is.

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Author: chasb Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75 of 109
Subject: Re: subs n' stubs Date: 10/22/2012 9:13 AM
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Thanks for the comprehensive explanation.

Charlie Brown (Loews bond holder)

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Author: robinstarveling Two stars, 250 posts CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 76 of 109
Subject: Re: subs n' stubs Date: 10/22/2012 9:30 AM
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19 Bcf in 1H at $2.34/Mcf before the hedge.

Spot prices around $3.50 this week.
http://www.eia.gov/naturalgas/weekly/

Those are some cheap BTUs. If I were a fertilizer producer or a cement maker, I'd be trying to lock in those prices for as long as possible.

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