Hidden Value Asset Play

“profit. That worked out to a paltry 2.5 percent return on assets, about what the money would earn in a passbook savings account, and 10 percentage points below what Tisch viewed as a minimum acceptable level. Loew’s had the perfect investment profile: lots of hidden value hampered by poor management. But a stock isn’t a lot- tery ticket; it’s a business. Once an investor like Tisch gets his foot in the door, he aims to see it run like a business and will happily do it himself, if necessary.”

“It was right out of Graham and Dodd, as was the notion of evaluat' ing a company’s underlying assets. Tisch liked insurance companies and banks, for example, because their asset values—in the form of cash, stocks, bonds, mortgages, and real estate—were simple to assess and fairly easy to access. A steel company is different; its value depends”