Teledyne

“Among over 1000 major American companies, Teledyne ranked 12th in profitability, 15th in growth, and sixth in market performance. In the multi-companies category, Teledyne was first in return on equity, first in return on total capital, and second in growth in…”

“The only way you can make money in some businesses is by not entering them.”

“From 1963 to 1990, Teledyne, the company that Henry Singleton helped build from scratch, delivered annual returns of 20.4%, while the S&P 500 managed a mere eight percent. If you'd invested 10,000 dollars in Teledyne in 1963, by 1990, you'd have over 1.8 Milli…”

“With an internal capital of 450,000, they launched what was originally called Instrument Systems.”

“Throughout the 19 sixties, Teledyne aggressively acquired more than 130 companies. But by 1969, Henry Singleton saw the acquisition prices head soar beyond rational value. Therefore, he slammed on the brakes, stunning Wall Street by making zero new deals.”

“While GE under Jack Walsh built layers of management and reporting requirements, creating a sprawling bureaucracy, Teledyne maintained its lean structure.”

“During the 1968 to 74 period, when most investors considered bonds safe and stocks risky, Singleton took the opposite view. He instructed his insurance companies to move away from fixed income securities and toward equities when the stock market was depressed.”

“In the end, what made Teledyne remarkable wasn't just Singleton's financial wizardry or Robert's operational discipline, but the seamless integration of the two, while most conglomerates of the era were ultimately dismantled or vastly underperformed the market…”

“Teledyne stock went on the market in 1961 with Arthur Rock, Who would later become famous for backing Intel and Apple, helping in the IPO.”

“When American TV manufacturers still dominated the US market, Singleton anticipated the coming Japanese competition and exited the business entirely. This shocked industry observers. Packard Bell had a good market share and solid profits, but Singleton saw the…”

“The victory sent Teledyne's stock soaring from 15 dollars to 65 dollars a share in just one year.”

“And they purchased these companies using Teledyne's highly valued shares, often trading at 40 to 70 times earnings. They more than doubled the share count in the late sixties. But the financial results that followed more than made up for the shared dilution, t…”

“The same year, Singleton conducted his eighth and final major stock buyback, acquiring 8.6 million shares at 200 dollars per share, approximately 30 dollars above the market price. This reduced Teledyne's outstanding shares to just over twenty million.”

“Subsidiary presidents had real authority, but they were measured on the Teledyne return, the average of the cash flow and reported profit, ensuring that they couldn't hide behind accounting tricks.”

“Shareholders who stayed with Teledyne from the first buyback in 1972 achieved gains of approximately 3000% by 1983, transforming many patient investors into multi-millionaires.”

“Teledyne's fiscal month ended on a Friday, and by Tuesday morning, reports from all 160 entities arrived.”

“We go to an extreme in splitting businesses up so that we can see problems which would be passed over in companies where the units are larger. By our plans, no one business all by itself will become too large.”

“Roberts noted that before the spinoff of Argonaut in 1986, Teledyne's stock price peaked at 367 dollars a share. By 1999, the combined value of all the companies was 691 dollars showing the lasting value Singleton had created.”

“After this transaction, Teledyne's stock climbed to 302 dollars per share by September, making it the highest priced stock on the New York Stock Exchange.”

“There was a whole team of people at Teledyne who had been taking care of the acquisitions, helping find these companies, working through the acquisition process, integrating them, And they were just laid off all at the same time.”

“Teledyne had acquired Argonaut in 1969 for eighty-seven million. At the time of the spinoff, it traded at 20 dollars per share With a market value of two hundred and thirty four million. Shareholders received one share of Argonaut Group for each share of Teled…”

“Companies that will sell one division and buy another because today this division generally sports a low multiple, and the one they're buying has a high multiple, and they think that may rub off on the whole company. That absolutely turns me off. The whole con…”

“Warren Buffett was an admitted singleton admirer, and we can see how Teledyne's decentralized structure with centralized capital allocation became central to Berkshire Hathaway's playbook.”

“One technique he used was borrowing against the physical inventories of the companies that they had acquired.”

“In an era when virtually no companies bought back shares, Teledyne would conduct eight major share repurchases over the next 12 years, reducing the number of shares outstanding by more than 90%.”

“For a corporation of Teledyne's size, they ran a remarkably lean corporate office, fewer than 50 people at headquarters, who focused primarily on planning, reporting, and auditing the results of the individual companies they had acquired in the 19 sixties.”

“In 1971, Teledyne earned a dollar 48 per share. By 1975, that figure had risen to six dollars and nine cents, a 311% increase. Well, total revenue and net income had only risen 56 and 77%, respectively.”

“Over the next 12 years, he bought back 90% of Teledyne shares. The result earnings per share exploded a 311% increase in just five years.”