Intrinsic value of Leucadia National - LUK

Previous Close

$25.79

  Intrinsic Value

$13.74

stock screener

  Rating & Target

sell

-47%

  Value-price divergence*

-118%

Previous close

$25.79

 
Intrinsic value

$13.74

 
Up/down potential

-47%

 
Rating

sell

 
Value-price divergence*

-118%

Our model is not good at valuating stocks of financial companies, such as LUK.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of LUK stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 9.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -7.31
  4.30
  4.37
  4.43
  4.49
  4.54
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.89
  4.91
  4.91
  4.92
  4.93
  4.94
  4.94
  4.95
  4.95
  4.96
  4.96
  4.97
Revenue, $m
  10,033
  10,464
  10,922
  11,406
  11,918
  12,459
  13,031
  13,634
  14,270
  14,940
  15,647
  16,391
  17,174
  17,999
  18,867
  19,780
  20,741
  21,751
  22,813
  23,930
  25,103
  26,337
  27,634
  28,997
  30,428
  31,933
  33,513
  35,174
  36,918
  38,751
  40,676
Variable operating expenses, $m
 
  10,143
  10,579
  11,040
  11,528
  12,044
  12,588
  13,163
  13,769
  14,408
  15,081
  15,619
  16,365
  17,151
  17,978
  18,848
  19,764
  20,726
  21,738
  22,802
  23,921
  25,097
  26,332
  27,631
  28,995
  30,429
  31,935
  33,517
  35,179
  36,925
  38,760
Fixed operating expenses, $m
 
  35
  36
  37
  38
  38
  39
  40
  41
  42
  44
  45
  46
  47
  48
  49
  50
  52
  53
  54
  56
  57
  59
  60
  61
  63
  65
  66
  68
  70
  71
Total operating expenses, $m
  9,762
  10,178
  10,615
  11,077
  11,566
  12,082
  12,627
  13,203
  13,810
  14,450
  15,125
  15,664
  16,411
  17,198
  18,026
  18,897
  19,814
  20,778
  21,791
  22,856
  23,977
  25,154
  26,391
  27,691
  29,056
  30,492
  32,000
  33,583
  35,247
  36,995
  38,831
Operating income, $m
  271
  286
  307
  329
  352
  377
  403
  430
  459
  490
  522
  727
  763
  801
  841
  882
  926
  973
  1,022
  1,073
  1,127
  1,183
  1,243
  1,306
  1,372
  1,441
  1,514
  1,591
  1,671
  1,756
  1,845
EBITDA, $m
  438
  581
  607
  635
  664
  695
  728
  762
  799
  837
  878
  920
  965
  1,013
  1,063
  1,115
  1,170
  1,229
  1,290
  1,354
  1,422
  1,493
  1,568
  1,647
  1,730
  1,817
  1,908
  2,004
  2,105
  2,211
  2,323
Interest expense (income), $m
  957
  853
  677
  740
  807
  877
  952
  1,031
  1,114
  1,201
  1,294
  1,391
  1,494
  1,601
  1,715
  1,835
  1,961
  2,093
  2,232
  2,378
  2,532
  2,694
  2,864
  3,043
  3,230
  3,428
  3,635
  3,853
  4,082
  4,322
  4,574
Earnings before tax, $m
  316
  -566
  -370
  -411
  -454
  -500
  -549
  -600
  -655
  -712
  -772
  -664
  -730
  -801
  -874
  -952
  -1,034
  -1,120
  -1,211
  -1,306
  -1,406
  -1,511
  -1,621
  -1,737
  -1,859
  -1,987
  -2,121
  -2,262
  -2,410
  -2,566
  -2,730
Tax expense, $m
  122
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  130
  -566
  -370
  -411
  -454
  -500
  -549
  -600
  -655
  -712
  -772
  -664
  -730
  -801
  -874
  -952
  -1,034
  -1,120
  -1,211
  -1,306
  -1,406
  -1,511
  -1,621
  -1,737
  -1,859
  -1,987
  -2,121
  -2,262
  -2,410
  -2,566
  -2,730

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  12,408
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  45,071
  34,086
  35,576
  37,153
  38,821
  40,583
  42,445
  44,409
  46,481
  48,665
  50,966
  53,390
  55,942
  58,629
  61,456
  64,430
  67,559
  70,849
  74,309
  77,947
  81,770
  85,789
  90,013
  94,452
  99,115
  104,016
  109,164
  114,573
  120,255
  126,224
  132,494
Adjusted assets (=assets-cash), $m
  32,663
  34,086
  35,576
  37,153
  38,821
  40,583
  42,445
  44,409
  46,481
  48,665
  50,966
  53,390
  55,942
  58,629
  61,456
  64,430
  67,559
  70,849
  74,309
  77,947
  81,770
  85,789
  90,013
  94,452
  99,115
  104,016
  109,164
  114,573
  120,255
  126,224
  132,494
Revenue / Adjusted assets
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
  0.307
Average production assets, $m
  2,078
  2,166
  2,261
  2,361
  2,467
  2,579
  2,697
  2,822
  2,954
  3,093
  3,239
  3,393
  3,555
  3,726
  3,905
  4,094
  4,293
  4,502
  4,722
  4,953
  5,196
  5,452
  5,720
  6,002
  6,299
  6,610
  6,937
  7,281
  7,642
  8,021
  8,420
Working capital, $m
  15,841
  4,133
  4,314
  4,505
  4,708
  4,921
  5,147
  5,385
  5,637
  5,901
  6,180
  6,474
  6,784
  7,110
  7,452
  7,813
  8,193
  8,592
  9,011
  9,452
  9,916
  10,403
  10,915
  11,454
  12,019
  12,613
  13,238
  13,894
  14,583
  15,307
  16,067
Total debt, $m
  18,669
  14,403
  15,744
  17,163
  18,665
  20,251
  21,926
  23,694
  25,559
  27,525
  29,596
  31,777
  34,074
  36,492
  39,036
  41,713
  44,529
  47,491
  50,604
  53,878
  57,319
  60,936
  64,738
  68,732
  72,930
  77,340
  81,974
  86,842
  91,956
  97,328
  102,970
Total liabilities, $m
  34,943
  30,677
  32,018
  33,437
  34,939
  36,525
  38,200
  39,968
  41,833
  43,799
  45,870
  48,051
  50,348
  52,766
  55,310
  57,987
  60,803
  63,765
  66,878
  70,152
  73,593
  77,210
  81,012
  85,006
  89,204
  93,614
  98,248
  103,116
  108,230
  113,602
  119,244
Total equity, $m
  10,128
  3,409
  3,558
  3,715
  3,882
  4,058
  4,244
  4,441
  4,648
  4,867
  5,097
  5,339
  5,594
  5,863
  6,146
  6,443
  6,756
  7,085
  7,431
  7,795
  8,177
  8,579
  9,001
  9,445
  9,912
  10,402
  10,916
  11,457
  12,026
  12,622
  13,249
Total liabilities and equity, $m
  45,071
  34,086
  35,576
  37,152
  38,821
  40,583
  42,444
  44,409
  46,481
  48,666
  50,967
  53,390
  55,942
  58,629
  61,456
  64,430
  67,559
  70,850
  74,309
  77,947
  81,770
  85,789
  90,013
  94,451
  99,116
  104,016
  109,164
  114,573
  120,256
  126,224
  132,493
Debt-to-equity ratio
  1.843
  4.230
  4.430
  4.620
  4.810
  4.990
  5.170
  5.340
  5.500
  5.660
  5.810
  5.950
  6.090
  6.220
  6.350
  6.470
  6.590
  6.700
  6.810
  6.910
  7.010
  7.100
  7.190
  7.280
  7.360
  7.440
  7.510
  7.580
  7.650
  7.710
  7.770
Adjusted equity ratio
  -0.054
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  130
  -566
  -370
  -411
  -454
  -500
  -549
  -600
  -655
  -712
  -772
  -664
  -730
  -801
  -874
  -952
  -1,034
  -1,120
  -1,211
  -1,306
  -1,406
  -1,511
  -1,621
  -1,737
  -1,859
  -1,987
  -2,121
  -2,262
  -2,410
  -2,566
  -2,730
Depreciation, amort., depletion, $m
  167
  295
  300
  306
  312
  318
  325
  332
  339
  347
  356
  193
  202
  212
  222
  233
  244
  256
  268
  281
  295
  310
  325
  341
  358
  376
  394
  414
  434
  456
  478
Funds from operations, $m
  592
  -272
  -70
  -105
  -143
  -182
  -224
  -268
  -315
  -364
  -416
  -471
  -528
  -589
  -653
  -720
  -790
  -864
  -942
  -1,024
  -1,110
  -1,201
  -1,296
  -1,396
  -1,501
  -1,611
  -1,727
  -1,848
  -1,976
  -2,110
  -2,251
Change in working capital, $m
  -12
  170
  181
  191
  202
  214
  226
  238
  251
  265
  279
  294
  309
  326
  343
  361
  379
  399
  420
  441
  464
  487
  512
  538
  566
  594
  624
  656
  689
  724
  760
Cash from operations, $m
  604
  -442
  -250
  -296
  -345
  -396
  -450
  -507
  -566
  -629
  -695
  -765
  -838
  -915
  -995
  -1,080
  -1,170
  -1,263
  -1,362
  -1,465
  -1,574
  -1,688
  -1,808
  -1,934
  -2,066
  -2,205
  -2,351
  -2,504
  -2,665
  -2,834
  -3,012
Maintenance CAPEX, $m
  0
  -118
  -123
  -128
  -134
  -140
  -147
  -153
  -160
  -168
  -176
  -184
  -193
  -202
  -212
  -222
  -233
  -244
  -256
  -268
  -281
  -295
  -310
  -325
  -341
  -358
  -376
  -394
  -414
  -434
  -456
New CAPEX, $m
  -319
  -89
  -95
  -100
  -106
  -112
  -118
  -125
  -132
  -139
  -146
  -154
  -162
  -171
  -180
  -189
  -199
  -209
  -220
  -231
  -243
  -255
  -268
  -282
  -296
  -311
  -327
  -344
  -361
  -379
  -398
Cash from investing activities, $m
  -640
  -207
  -218
  -228
  -240
  -252
  -265
  -278
  -292
  -307
  -322
  -338
  -355
  -373
  -392
  -411
  -432
  -453
  -476
  -499
  -524
  -550
  -578
  -607
  -637
  -669
  -703
  -738
  -775
  -813
  -854
Free cash flow, $m
  -36
  -649
  -468
  -525
  -585
  -648
  -715
  -785
  -858
  -936
  -1,017
  -1,103
  -1,193
  -1,287
  -1,387
  -1,491
  -1,601
  -1,716
  -1,837
  -1,965
  -2,098
  -2,239
  -2,386
  -2,541
  -2,704
  -2,875
  -3,054
  -3,242
  -3,440
  -3,648
  -3,866
Issuance/(repayment) of debt, $m
  216
  -3,740
  1,341
  1,419
  1,501
  1,586
  1,675
  1,768
  1,865
  1,966
  2,071
  2,182
  2,297
  2,418
  2,544
  2,677
  2,816
  2,961
  3,114
  3,274
  3,441
  3,617
  3,801
  3,995
  4,198
  4,410
  4,634
  4,868
  5,114
  5,372
  5,643
Issuance/(repurchase) of shares, $m
  -94
  5,729
  519
  569
  621
  677
  735
  797
  862
  930
  1,002
  906
  986
  1,069
  1,157
  1,250
  1,347
  1,449
  1,556
  1,669
  1,788
  1,912
  2,043
  2,181
  2,325
  2,477
  2,636
  2,803
  2,979
  3,163
  3,357
Cash from financing (excl. dividends), $m  
  322
  1,989
  1,860
  1,988
  2,122
  2,263
  2,410
  2,565
  2,727
  2,896
  3,073
  3,088
  3,283
  3,487
  3,701
  3,927
  4,163
  4,410
  4,670
  4,943
  5,229
  5,529
  5,844
  6,176
  6,523
  6,887
  7,270
  7,671
  8,093
  8,535
  9,000
Total cash flow (excl. dividends), $m
  260
  1,341
  1,391
  1,463
  1,537
  1,615
  1,696
  1,780
  1,868
  1,960
  2,056
  1,985
  2,090
  2,200
  2,315
  2,435
  2,562
  2,694
  2,833
  2,978
  3,131
  3,291
  3,458
  3,634
  3,819
  4,012
  4,216
  4,429
  4,652
  4,887
  5,134
Retained Cash Flow (-), $m
  273
  -5,729
  -519
  -569
  -621
  -677
  -735
  -797
  -862
  -930
  -1,002
  -906
  -986
  -1,069
  -1,157
  -1,250
  -1,347
  -1,449
  -1,556
  -1,669
  -1,788
  -1,912
  -2,043
  -2,181
  -2,325
  -2,477
  -2,636
  -2,803
  -2,979
  -3,163
  -3,357
Prev. year cash balance distribution, $m
 
  11,882
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  7,494
  872
  894
  916
  938
  961
  983
  1,006
  1,030
  1,054
  1,079
  1,104
  1,131
  1,158
  1,186
  1,215
  1,245
  1,276
  1,309
  1,343
  1,378
  1,415
  1,454
  1,494
  1,536
  1,580
  1,626
  1,674
  1,724
  1,777
Discount rate, %
 
  6.60
  6.93
  7.28
  7.64
  8.02
  8.42
  8.84
  9.29
  9.75
  10.24
  10.75
  11.29
  11.85
  12.45
  13.07
  13.72
  14.41
  15.13
  15.88
  16.68
  17.51
  18.39
  19.31
  20.27
  21.29
  22.35
  23.47
  24.64
  25.87
  27.17
PV of cash for distribution, $m
 
  7,030
  763
  724
  682
  638
  591
  543
  495
  446
  398
  351
  306
  264
  224
  188
  155
  126
  101
  80
  61
  47
  35
  25
  18
  12
  8
  5
  4
  2
  1
Current shareholders' claim on cash, %
  100
  50.0
  42.9
  36.6
  31.0
  26.0
  21.8
  18.1
  14.9
  12.3
  10.0
  8.4
  7.0
  5.8
  4.8
  3.9
  3.2
  2.6
  2.1
  1.7
  1.4
  1.1
  0.9
  0.7
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1

Leucadia National Corporation (Leucadia) is a diversified holding company focused on return on investment and long-term value. The Company's segments, based on requirements are Jefferies, National Beef, and Corporate and other. Jefferies is a global full-service, integrated securities and investment banking firm. National Beef processes and markets fresh boxed beef, case-ready beef, beef by-products and wet blue leather for domestic and international markets. Its financial services businesses include Jefferies Group LLC, Leucadia Asset Management, Berkadia Commercial Mortgage, LLC (commercial mortgage banking and servicing), FXCM Group, LLC, HomeFed Corporation (HomeFed) and Foursight Capital and Chrome Capital (vehicle finance). It also owns and has investments in an array of businesses, including National Beef, HRG Group, Inc. (HRG), Vitesse Energy, LLC and Juneau Energy, LLC, Conwed Plastics and Idaho Timber and Golden Queen Mining Company, LLC (a gold and silver mining project).

FINANCIAL RATIOS  of  Leucadia National (LUK)

Valuation Ratios
P/E Ratio 71.3
Price to Sales 0.9
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 15.3
Price to Free Cash Flow 32.5
Growth Rates
Sales Growth Rate -7.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 7.8%
Cap. Spend. - 3 Yr. Gr. Rate 14%
Financial Strength
Quick Ratio 24
Current Ratio 0
LT Debt to Equity 179.1%
Total Debt to Equity 184.3%
Interest Coverage 1
Management Effectiveness
Return On Assets 1.6%
Ret/ On Assets - 3 Yr. Avg. 1.4%
Return On Total Capital 0.4%
Ret/ On T. Cap. - 3 Yr. Avg. 0.6%
Return On Equity 1.3%
Return On Equity - 3 Yr. Avg. 2%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 31.7%
Gross Margin - 3 Yr. Avg. 30.2%
EBITDA Margin 14.4%
EBITDA Margin - 3 Yr. Avg. 13.2%
Operating Margin 2.7%
Oper. Margin - 3 Yr. Avg. 2.8%
Pre-Tax Margin 3.1%
Pre-Tax Margin - 3 Yr. Avg. 2.5%
Net Profit Margin 1.3%
Net Profit Margin - 3 Yr. Avg. 1.9%
Effective Tax Rate 38.6%
Eff/ Tax Rate - 3 Yr. Avg. 50.5%
Payout Ratio 70%

LUK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LUK stock intrinsic value calculation we used $10033 million for the last fiscal year's total revenue generated by Leucadia National. The default revenue input number comes from 2016 income statement of Leucadia National. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our LUK stock valuation model: a) initial revenue growth rate of 4.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.6%, whose default value for LUK is calculated based on our internal credit rating of Leucadia National, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Leucadia National.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of LUK stock the variable cost ratio is equal to 97%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $34 million in the base year in the intrinsic value calculation for LUK stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.7% for Leucadia National.

Corporate tax rate of 27% is the nominal tax rate for Leucadia National. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the LUK stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for LUK are equal to 20.7%.

Life of production assets of 17.6 years is the average useful life of capital assets used in Leucadia National operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for LUK is equal to 39.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $10128 million for Leucadia National - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 362.361 million for Leucadia National is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Leucadia National at the current share price and the inputted number of shares is $9.3 billion.

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COMPANY NEWS

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▶ [$$] Jefferies Profit More Than Doubles   [12:26AM  The Wall Street Journal]
▶ Jefferies Trading Revenue Slumps   [Sep-19-17 07:23PM  Bloomberg Video]
▶ Leucadia to Host Investor Meeting on October 5, 2017   [Sep-13-17 09:22AM  Business Wire]
▶ Jefferies to Hold Hurricane Harvey Relief Day Today   [Aug-30-17 07:45AM  Business Wire]
▶ Leucadia and Jefferies to Host Annual Investor Meeting   [Aug-11-17 10:54AM  Business Wire]
▶ [$$] Clearlake Capital Invests in JetSmarter   [Aug-10-17 06:38PM  The Wall Street Journal]
▶ JetSmarter raises its first round of institutional capital   [12:50PM  American City Business Journals]
▶ Leucadia posts 2Q profit   [Jul-27-17 11:05PM  Associated Press]
▶ Dow, S&P 500 slide as telecom, utilities shares retreat   [Jul-24-17 11:09AM  MarketWatch]
▶ [$$] A Mini-Berkshire Ready to Break Out   [Jul-22-17 01:54AM  Barrons.com]
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▶ Jefferies' Darby Likes Chinese Government Bonds   [Jul-10-17 11:15PM  Bloomberg Video]
▶ [$$] Jefferies Revenue Rises on Investment Banking Unit   [08:13AM  The Wall Street Journal]
▶ M Science Launches M Data Enhanced   [Jun-06-17 08:00AM  Business Wire]
▶ Wall St. CEO: Here are 20 things every intern should know   [Jun-01-17 09:18AM  Yahoo Finance]
▶ FXCM Group Names Brendan Callan as CEO   [02:00AM  GlobeNewswire]
▶ Leucadia Turns Things Around on Jefferies Recovery   [Apr-28-17 07:03PM  Motley Fool]
▶ Leucadia posts 1Q profit   [Apr-27-17 06:56PM  Associated Press]
▶ M Science Adds Senior Analyst Byrne Hobart   [08:00AM  Business Wire]
▶ Backstone Buys Into Permian For $2 Billion   [Apr-23-17 01:00AM  Oilprice.com]
▶ Top Ranked Growth Stocks to Buy for April 18th   [Apr-18-17 12:19PM  Zacks]
Financial statements of LUK
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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