The aura that surrounds the Connecticut-based investment manager lies in its direct historical links to Benjamin Graham, the leader of those analysts who, in the 1930s, turned equity investing from the equivalent of alchemy into something close to chemistry. In those days, Graham’s investment firm, Graham-Newman, used Tweedy & Co, as it then was, as a broker. By the 1950s it had become Tweedy Browne and had diversified into investment management, using as its template Graham’s original value-investing approach, which focused almost exclusively on a company’s tangible assets. Even now Tweedy Browne’s investing style is as close as you can get to Graham-Newman’s in the modern world.
Which brings us back to Lookers, whose profits warning last week – on top of news that the UK’s finance-industry regulator is investigating its sales practices – has left its share price shot to ribbons. At 42p, it is 63 per cent below its 12-month high and 80 per cent below the all-time peak. Almost certainly, this leaves Tweedy Browne nursing book losses on its 5.5 per cent holding. Even so, a combination of Tweedy’s presence on the share register and the share price collapse encourages the thought that there must be hidden value in the shares.