Valens Equity Weekly Insights - 2022 12 06
Loews Corporation (L) has three business lines that are positioned to benefit from high energy prices, high interest rates, and the pandemic recovery. Uniform Accounting highlights that the market is not pricing in these tailwinds for the business highlightingan opportunity for equity upside as they prove to be sustainable.
Loews currently operates in the insurance, natural gas pipeline, and hotel industries. All three of these businesses were sleepy during and even before COVID, but with major international energy disruptions, higher interest rates, and a massive travel recovery, all three are better positioned than they've been in years. Even still, the market is not pricing in a major inflection for the business, pointing to equity upside.
Loews' management is aligned to grow earnings over time, which should drive long-term
performance improvements.
Management confidence in the Q3 earnings call about Loews Hotels' recovery and about
its capital allocation decisions suggest the business is well-positioned.
Citi (C) is being removed from the Conviction Long List. It hasn't been able to improve its
technology infrastructure, and its ROE still lags behind its peers. We are closing down 32%.
L
Loews is a holding company and has five reportable segments comprised of four individual operating subsidiaries: CNA Financial Corporation, which provides commercial property and casualty coverages; Diamond Offshore Drilling, Inc., which provides contract drilling services to the energy industry; Boardwalk Pipeline Partners, LP, which is engaged in the business of natural gas and natural gas liquids and hydrocarbons transportation and storage; Loews Hotels Holding Corporation, which operates a chain of hotels; and the Corporate segment, which includes the operations of Altium Packaging LLC, which is a packaging solutions provider and manufacturer in North America.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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