Virginia-based conglomerate Graham Holdings (GHC) was one of Barchart’s 200 bearish price surprises in Monday trading. It was down 2.2% on the day to $1,165.29; its standard deviation was -1.67, far from the highest, Eyepoint (EYPT), at -4.49, but still notable enough to make the list.
Texas-based holding company Biglari Holdings (BH.A) was one of Barchart’s 200 bullish price surprises in Monday trading. It was up 3.56% on the day to $1,974.08; its standard deviation was 1.52, while IP Strategy Holdings (IPST) was 4.53. Nonetheless, it was enough to make the list.
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Businesses with lots of moving parts can be a worthwhile endeavor. While harder to evaluate, that’s what makes them attractive as long-term investments. Periodically, they trade at discounts to their estimated intrinsic values, often because of this difficulty.
In April, I discussed Graham Holdings because it was one of Barchart’s 200 bullish price surprises. Yesterday, the shoe was on the other foot. As for Biglari Holdings, I’ve followed it for many years. I most recently discussed it in July 2024 as part of my look at Cracker Barrel’s (CBRL) stock hitting a 5-year low.
With both stocks over $1,000, I’d buy GHC over BH.A if you’re investing for the long term. Here’s why.
Biglari’s Class A Stock Is Troubling
Biglari’s Class A shares (BH.A) were the ones that made yesterday’s bullish price surprise list. They’re up 12.97% in 2026 compared to 17.03% for the Class B shares (BH).
Each share comes with one vote. The Class B shares don’t have voting rights. This arrangement enables Biglari’s founder, Sardar Biglari, to control the company.
In Biglari’s 2017 letter to shareholders, Sardar Biglari said it would convene a special meeting of shareholders to create a new holding company with a dual-class share structure. This was done for two reasons: First, to maintain Sardar Biglari’s control of the company, and secondly, to enable the company to make acquisitions with stock without risking Sardar Biglari’s control of the holding company.
I’m not opposed to dual-class share structures for founder-led companies. Still, Biglari got to this point through years of less-than-arm’s-length financial transactions that have benefited Sardar Biglari, potentially to the detriment of other shareholders. The trail of lawsuits confirms this.
As of March 5, 2015, Sardar Biglari controlled 19% of the 2,065,586 shares outstanding. As of Dec. 31, 2017, Biglari had 2,067,613 shares outstanding, but Biglari now controlled 50.6% of the stock. As of March 20, 2018, the record date for the recapitalization vote, the stake increased to 54.8% of the votes.
Under the terms of the April 2018 recapitalization, for each share held before the dual-class share structure, shareholders received 1/10th of a Class A share (1/10th of a vote) and 1 Class B share (no votes). Sardar Biglari controlled 1,133,382 shares.
Sardar Biglari controls Biglari Capital Corp., which is the general partner of the Lion Fund, the founder’s hedge fund vehicle. Both entities continue to buy Class A shares to cement Sardar Biglari’s control. As of Feb. 26, Biglari had an economic interest of 69.4% and 73.1% of the votes.
As long as Sardar Biglari stays above ground and among the living, he’s not going anywhere. Often compared to Warren Buffett, he’s far from it. The Class A shares are troubling but not illegal.
The Sum of Biglari’s Parts
As Biglari’s home page states, it is a diversified holding company, with four operating segments: Restaurant (69% of revenue in Q2 2026), Insurance (18%), Oil & Gas (10%), and Brand Licensing (3%).
However, by operating profit, the gap narrows considerably for its restaurant segment, which includes the Western Sizzlin and Steak n Shake banners. In Q2 2026, it accounted for 45% of Biglari’s operating profits, compared to 41% for oil & gas, and 14% for insurance. The brand licensing business lost $62,000 in the quarter, down from a $198,000 loss a year earlier.
Like Berkshire Hathaway, Biglari generates considerable, but variable, investment and investment partnership gains each quarter. In the second quarter, they were $9.7 million and $35.6 million, respectively, for total other income of $45.3 million, down from $61.4 million a year earlier.
As Sardar Biglari stated in the 2025 letter to shareholders, the Lion Fund L.P. and the Lion Fund II L.P. own a significant amount of Biglari Holdings stock.
If I’m reading it right, the Biglari Holdings stock held by the hedge funds was worth $618 million at the end of 2025, which means the remaining investments, less $338 million in cash and cash equivalents, were worth $280 million.
Approximately $225 million of that was debt Steak n Shake took on at 8.8% interest. The restaurant chain passed the $225 million on to Biglari Holdings. Less the 4% interest earned on the $225 million, it would pay $11 million in interest annually. It was sitting on the cash as of June 30.
So, the big question is how much investors should be willing to pay for its operating businesses, which generated $46.8 million in pre-tax income on $395.3 million in 2025 revenue.
Its market cap is currently $1.25 billion. That’s 3.2 times revenue and 26.7 times pre-tax income. If you subtract the $342.7 million in cash and cash equivalents, the multiples fall to 2.3x and 19.4x, respectively.
Life After the Washington Post
As I stated in April, when Don Graham, the former CEO of The Washington Post, sold the paper to Jeff Bezos, the remaining assets were placed under a new company, Graham Holdings. He was CEO of Graham until November 2015. He now serves as Chairman Emeritus.
Graham has five operating segments: Education (35% of revenue), Television Broadcasting (9%), Healthcare (10%), Manufacturing (11%), and Automotive (35%).
I like the diversification of its revenues. It’s not overly reliant on one segment, as Biglari is with restaurants.
Graham’s five segments contribute the following EBITDAP (earnings before interest, taxes, depreciation, amortization, and Pension Service Cost): Education (41%), Television Broadcasting (24%), Healthcare (19%), Manufacturing (10%), and Automotive (6%).
As you can see, education and television broadcasting are the big profit drivers, while automotive fails to deliver. That’s why you diversify within a holding company structure. Otherwise, there’s no point.
According to S&P Global Market Intelligence, Graham’s P/S and P/EBIT, based on the trailing 12 months ended June 30, were 1.0 times revenue and 8.9 times pre-tax profits.
GHC Vs. BH.A: Which Is the Better Bet?
Even without accounting for Graham Holdings’ massive $2.77 billion funded status on its various pension plans, Graham Holdings is a better long-term investment than Biglari Holdings.
It doesn’t hurt that Don Graham still owns nearly 13% of its stock. No hedge funds skew the company’s investments or an investor's view of the business's asset values. You can’t say the same about Biglari.
Holding companies and conglomerates are hard enough to evaluate. Give yourself a break and focus on understanding GHC over BH.A.
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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