Loews Corporation is a diversified holding company with the majority of its intrinsic value attributable to majority stakes in three publicly traded subsidiaries: CNA Financial, Diamond Offshore, and Boardwalk Pipeline. Based on market quotations as of May 10, 2013, the value of shares owned by Loews in these three publicly traded subsidiaries was $16,360 million.

With Loews Corporation’s market capitalization of $17,721 million, investors are paying $1,361 million for the rest of Loews, commonly referred to as the “Loews stub”, which had tangible book value of $3,808 million as of March 31, 2013. The Loews stub includes wholly owned subsidiaries HighMount Exploration & Production LLC and Loews Hotels along with cash and investments at the holding company level.

We first wrote about the valuation of the Loews stub in early 2012 when the discount was somewhat larger than it is today.  For an updated analysis, please read the follow-up posted on BeyondProxy.

Disclosure:  Individuals associated with The Rational Walk LLC own shares of Loews Corporation.