For his Performance with Protection portfolio, Covestor model manager Leif Eriksen takes a top-down fundamental approach that favors large- and mid-cap companies. His goal is to outperform the market over the long run while protecting capital.
Eriksen recently purchased Loews Corporation (NYSE: L) for the portfolio. Loews is a holding company with subsidiaries operating in a diverse set of industries including property and casualty insurance, offshore oil and gas, natural gas transmission, and hotels.
We asked Eriksen to share his thoughts on the purchase. His response:
Buying Loews Corporation (L) is like buying a closed-end mutual fund in disguise. Loews is often referred to as a mini-Berkshire (NYSE: BRK.A) (NYSE: BRK.B) with a mix of businesses including insurance, oil & gas, and hotels. Yet, by most valuation measures including price/earnings, price/sales, and price/book it lags Berkshire. And it’s price/book is less than 1 (as of 5/4/11).
I recently doubled up my position in L because most of its businesses will benefit from the strengthening global economy. It also fits my requirement of being a well – and conservatively – run business. The Tisch family are known as wise allocators of capital. For all of these reasons, L is the ideal investment for my Performance with Protection model.
Sources:
Price multiple data from Yahoo Finance https://finance.yahoo.com/quote/L/key-statistics?ltr=1)
