First, let’s look at companies that Barron’s describes as “investor insurers” — such as Berkshire Hathaway (BRK.B) — because they invest the cash generated by their insurance operations in other non-related industries. Recently, it noted that Deutsche Bank analysts Joshua Shanker and Phil Stefano initiated “buy” coverage of Loews (L), another of the so-called investor insurers.
The analysts argue that purchasing Lowes’ shares — which are trading at a discount to book value despite growing book value 10% annually over the past decade — gets you several assets for free, including Loews’ hotel chain. It might not be quite risk-free, but it’s pretty darn close given its valuation.
I like this company a lot, no matter the economic situation.