OK, so this is starting to sound like a broken record — but I bought another cash-rich, insurance-based conglomerate that has a history of making good investment decisions. I picked up shares late this afternoon of Loews Corp. at a hair over $40. Loews runs its own Loews hotel chain, owns most of CNA Insurance, controls Diamond Offshore and Boardwalk Pipeline partners, and fairly recently bought/created a small natural gas exploration and production company (Highmount). They have a big pile of cash available ($4 billion net cash from a $14 billion market cap), and I expect them to continue to prosper if they can improve the performance at their insurance company, and I think they’re rock-bottom cheap right now even if CNA doesn’t soon become much stronger.
I’ve liked Loews for a long time, but wasn’t willing to own them while they also owned a major cigarette company — that changed when they spun off Lorillard. Downside risks include a bad hotel market, falling oil and gas prices for their E&P and drilling divisions (if they do indeed fall again after today’s spike), and execution at CNA, which is on the cheap side for insurance companies, in part, for good reasons having to do with past corporate performance. I’ll try to write more about this one soon.