From an asset perspective, the company is fairly compelling. However, that has not translated into much success in recent years. With management's focus on increasing book value per share, earnings have not been consistent, and it's been a difficult company for investors to understand. Complicating matters, book value has actually fallen in recent years. I still believe that the sum of the parts is still worth more than the whole, but PICO has a long way to go, even to live up to my "poor man's Berkshire Hathaway" description.
My latest quest to find Berkshire Hathaway-like potential resulted in a position in another smaller name,
of San Antonio. Formerly Steak 'n Shake, the company is the capital allocation vehicle of hedge fund manager Sardar Biglari, the company's CEO.
Just 34 years old, Biglari has already made quite a splash in the investment world. If you have not yet heard of him, I suspect that you will. Biglari is a larger-than-life manager with some early successes, such as turning around fast food chain Steak 'n Shake. He has also drawn criticism from people who view him as a Warren Buffett wannabe who's trying to get there using some non-Buffett moves.
Biglari drew heat a couple of years ago when he proposed changing the name of the company from Steak 'n Shake, to one that bears his name -- a move that shareholders approved. He was also under fire for proposing a pay package for himself that some people considered excessive. Ultimately, a slightly watered-down version of that package was also approved.
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Biglari also lacks Buffett's Midwest folksy charm. He's much more of an activist than Buffett ever was, taking aim at companies, building stakes and attempting to get seats on their boards. That's what is currently unfolding with restaurant chain
, in which Biglari Holdings has built a 17% position. Biglari has criticized Cracker Barrel's management and demanded changes. Contrast that to Buffett, who typically buys businesses whose management teams he likes and stays out of day-to-day operations.
Suffice it to say that it's way too early to make comparisons between Biglari and Buffett, between Biglari Holdings and Berkshire Hathaway. I'm encouraged by some of Sardar Biglari's successes. He has shown early promise as a capital allocator. He may improve with more seasoning. Time will tell.
Meanwhile, the quest continues.
-- Written by Jonathan Heller, president of KEJ Financial Advisors and a contributor to TheStreet and Real Money. As of publication, he was long PICO and BH.