The Tisch family are value investors. That’s all they know.
Since the beginning of 1966 through the end of 2016, Loews Corporation (L) stock has delivered a compound annual return of 17%.
However, the past decade has been a tough one, lowering the return considerably from what it might have been had L stock not gone sideways.
Why Loews?
It owns 53% of Diamond Offshore Drilling Inc. (DO), a firm whose stock price and business have been severely hampered by a move by the big energy companies from offshore drilling to shale, a problem that might not go away for some time.
And that’s what makes Loews so attractive.
“Annual oil demand is expected to continue to grow at slightly more than 1 million barrels per day over the next decade and a half,” Diamond Offshore’s 2016 annual report stated. “Stacked against conservative estimates of production decline, the industry will likely need to find and develop approximately 40 million barrels per day of new production. Onshore, including unconventional shale, cannot fill this gap alone.”
There will come a day when offshore oil production moves from bust to boom, and when that happens shareholders of Loews will benefit in a big way.
You could buy Diamond Offshore stock directly, but I believe owning Loews is a more prudent way to bide your time.
With a bunch of new initiatives under way, including the delivery of food and alcohol, it’s got a shot at getting off the restaurant trash heap, but it’s not going to be easy.
SEE ALSO FROM INVESTORPLACE: 10 Dividend Stocks That Will Pay Your Monthly Bills
Source: Kiplinger
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