Martin Whitman

Martin Whitman

Last Update: 2014-09-17
Related: Third Avenue Management

Number of Stocks: 37
Number of New Stocks: 2

Total Value: $2,072 Mil
Q/Q Turnover: 8%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Martin Whitman' s Profile & Performance

Profile

Martin Whitman is Founder and Portfolio Manager of the Third Avenue Value Fund (TAVFX). Whitman is a 1949 graduate of Syracuse University, which recently renamed its School of Management after Whitman, after a large gift from him in June 2003. He is an adjunct faculty member at Yale School of Management.

Web Page:http://www.thirdavenuefunds.com/

Investing Philosophy

Whitman is a "buy and hold" value investor. He buys stock in companies when he thinks that the company has strong finances, competent management, and the business is understandable. Also the company's stock must be cheap, meaning it trades at a significant discount to intrinsic value. The market price must lie substantially below a conservative valuation of the business as a private entity, or as a takeover candidate. He generally sells an investment only when there has been a fundamental change in the business or capital structure of the company that significantly affects the investment's inherent value, or when he believes that the market value of an investment is overpriced relative to its intrinsic value

Historical Allocation of Stock, Bonds, Cash

Total Holding History

Performance of Third Avenue Value Fund

YearReturn (%)S&P500 (%)Excess Gain (%)
201318.8431.55-12.7
201227.4815.412.1
2011-20.682.08-22.8
3-Year Cumulative20.2 (6.3%/year)55 (15.7%/year)-34.8 (-9.4%/year)
201013.8715.06-1.2
200944.5126.4618.0
5-Year Cumulative97.7 (14.6%/year)125.5 (17.7%/year)-27.8 (-3.1%/year)
2008-45.61-37-8.6
20075.765.610.2
200614.6915.79-1.1
200516.494.9111.6
200426.621214.6
10-Year Cumulative92.4 (6.8%/year)104.1 (7.4%/year)-11.7 (-0.6%/year)
200310.4628.7-18.2
20027.13-22.129.2
200110.82-11.922.7
20000.91-9.110.0
199910.0621-10.9
15-Year Cumulative180.3 (7.1%/year)98.3 (4.7%/year)82 (2.4%/year)
199816.7228.6-11.9
1997-5.0333.4-38.4
199611.0223-12.0
19952.3637.6-35.2
1994-3.221.3-4.5
20-Year Cumulative241.7 (6.3%/year)483.2 (9.2%/year)-241.5 (-2.9%/year)
19931.3610.1-8.7
199210.887.63.3
1991-0.2630.5-30.8

Top Ranked Articles

Marty Whitman’s Conviction in Ambac is Working out; Still waiting for MBIA and Radian Group?
Legendary investor Marty Whitman’s purchases of bond and mortgage insurers Radian (RDN), Ambac (ABK) and MBIA (MBI) have been very controversial, and widely discussed. Watching an investment plunging 95% and continuing to buy more, what kind of conviction does that need? Read more...
Clash of the Titans: Martin Whitman Versus Bruce Greenwald
Marty Whitman is truly a living legend in the world of value investing. It is always a pleasure to read and find great investing insights from his letters. Here in this letter from the year 2001 he reflects on "net nets" and investing practiced in the real world, as opposed to what is taught in the business schools. The concept of Net-Nets was invented by Graham and Dodd and is very rarely found in the present markets, however Marty Whitman refined this definition to the next level. He explains that for a retailer it's inventory which is considered to be a current asset, is in fact a fixed asset of the worst type and it cannot stay in the business without maintaining a certain level of inventory. However, for a company which owns some real estate and has triple A tenants with long term leases in class A office buildings it can sell the properties or refinance them. It may be called a fixed asset, but it is much more current asset than a retailer's inventory. Using this definition one can find companies trading below their net current assets. Read more...
Stock Market Valuation June 2, 2011
I find the current valuations astonishing. No I am not refering to linkedin or Groupon or the high fliers. The overall market is so overvalued considering the macro picture. I am not a macro investor, but Wall Street is. It makes no sense for the Shiller PE to be at 23 (an earnings yield of 4.3%), when the deficit is out of control, there is inflation accross the board except Real estate (the one asset class QE2 was really supposed to help!), housing is in a double dip, unemployment cannot come down for years unless there is job growth of 500k a month (close to impossible). Additionally, the Euro zone is experiencing a big crisis, Japan suffered a catastrohpic humanitarian and economic disaster, and countries like China are starting to get nervous about over heating in their economies. Read more...
Stock Market Valuation: April 3, 2011
The current level of the S&P500 is 1,332, and the Dow is at 12,377--nearly unchanged from last month. As evidenced below, market valuations did not change much over the last month. Read more...
Stock Market Valuation May 2, 2011
The current level of the S&P500 is 1,364, and the Dow is at 12,811–higher than last month, but valuations remained overall the same. As evidenced below, market valuations did not change much over the last month. I update market valuations on a monthly basis. The point of this article is to measure the stock market based on seven different metrics. This article does not look at the macro picture and try to predict where the economy is headed. It only uses these several metrics which have been very good past indicators of whether the market is fairly valued. Read more...
» More Martin Whitman Articles

Commentaries and Stories

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Weekly 3-Year Low Highlights: PKX, UTEK, LF, MVC
According to GuruFocus list of 3-year lows; POSCO, Ultratech Inc, Leapfrog Enterprises Inc, and MVC Capital Inc. have all reached their 3-year lows. More...

WEEKLLY, 3, YEAR, LOW, HIGHLIGHT


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Third Avenue Value Fund Comments on CBS Corp
Content Trumps Distribution at CBS (CBS) More...

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Third Avenue Value Fund Comments on General Motors Co
General Motors (GM): The Benefits of Looking Under the Hood More...

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Third Avenue Value Fund Comments on Valmont Industries Inc
The agricultural sector is another example of a fruitful area of idea generation for us over the past few years. Due to weather-related factors, the supply trends have been all over the board, creating high volatility in the stock prices of agriculture-related companies. The volatility in supply is countered by a very strong and steady demand. World population and income levels are growing, driving demand for beef and other protein products. As demand for protein grows, agricultural demand grows with it. At Third Avenue, we are attracted to those situations. Short-term dislocations can produce attractive prices, when the long-term trends are favorable. This means that on occasion we have the opportunity to acquire shares at a discount from our conservatively estimated NAV in the well capitalized companies that we consider to have the ability to compound their NAVs at double digit rates over time. We believe this combination has the potential to generate attractive returns for our shareholders. More...

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Third Avenue Value Fund Comments on Weyerhaeuser Co, Canfor, and Cavco Industries
For example, our investment in Weyerhaeuser, the largest held position at Third Avenue, is representative of our view of a strong US housing recovery, a view shared with and championed by our Third Avenue Real Estate team. Weyerhaeuser provides a compelling, yet not obvious, exposure to the US housing theme through its engineered wood products business, especially on the heels of the Weyerhaeuser Real Estate Company (WRECO) split off. In addition to Weyerhaeuser (WY), our holdings in Canfor (TSX:CFP) and Cavco Industries (CVCO) should benefit from a longer-term recovery in US housing. Canfor and Cavco are two well-capitalized and attractively priced companies involved in different points in the residential “value chain”. Cavco, a direct play on housing, is the second largest US producer of manufactured homes. Canfor is an integrated forest products company, focused primarily in lumber used to build houses. We started analyzing Canfor when doing our research on Weyerheauser as it is a competitor, but found its old growth log export More...

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Martin Whitman 4Q 2014 Shareholder Letter
Dear Fellow Shareholders, More...

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Third Avenue International Value Fund Q4 Commentary
Dear Fellow Shareholders, More...

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Third Avenue Small Cap Fund Q4 Commentary
Dear Fellow Shareholders, More...

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Third Avenue Value Fund Q4 Portfolio Manager Commentary
Dear Fellow Shareholders, More...

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Marty Whitman's Third Avenue Funds Q4 Portfolio Manager Commentary
Dear Fellow Shareholders, More...

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The Value Conference in Review - Third Avenue Credit Team on Event Driven Investing
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Marty Whitman's Third Avenue Buys 2 Forest Products Companies Martin Whitman,Third Avenue Management - Marty Whitman's Third Avenue Buys 2 Forest Products Companies
Third Avenue Management (Trades, Portfolio) was founded by Marty Whitman in 1974 and now has teams of portfolio managers working on its portfolios. In its third quarter letter, managers said they were not having trouble finding good value investments in the strong markets. They wrote: More...

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Third Avenue Real Estate Value Fund Second Quarter 2014
Dear Fellow Shareholders, We are pleased to provide you with the Third Avenue Real Estate Value Fund’s (Fund) report for the quarter ended July 31, 2014. More...

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Third Avenue Small-Cap Value Fund Second Quarter Commentary
Dear Fellow Shareholders, More...

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Third Avenue Value Fund Comments on Weyerhaeuser Co
The Fund initiated a position in Weyerhaeuser (WY) as the company moved to finalize the distribution of its WRECO homebuilding subsidiary in an exchange offer with Tri Pointe Homes Inc. Weyerhaeuser is a Real Estate Investment Trust with wood products and wood fiber businesses, and the second largest owner of timberlands in the U.S. It is worth noting that Weyerhaeuser was sourced with TAM’s Real Estate team and is a solid example of the ability of the Fund to pull ideas from across the entire TAM research team. The Reverse Morris Trust distribution of WRECO was structured as an exchange offer, whereby shareholders could choose to accept shares in the new Tri Pointe, or to retain their interest in Weyerhaeuser. We chose not to indicate for Tri Pointe shares, and were pleased that the exchange offer was oversubscribed so that we retained our full position in Weyerhaeuser. The net effect of the transaction from our perspective was a resource conversion event in which WRECO was traded for a large repurchase transaction, representing roughly 10% of Weyerhaeuser shares plus $700 million in cash. More...

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Third Avenue Value Fund Comments on Apache Corporation
Apache (APA) is transforming its holdings from a diversified array of E&P assets to one that is more focused on unconventional onshore liquids plays. We expect the company to live within its cash flow, excluding the CAPEX required for its two liquid natural gas (LNG) projects, Wheatstone and Kitimat. Longer term, we think Apache will at least partially monetize LNG projects, which are operated by Chevron, to focus on higher return projects that support production and cash flow growth. Although not expected nor central to our investment thesis, the recent involvement from JANA Partners further validates our view that significant value remains under‐appreciated within Apache’s still fairly diverse portfolio of E&P assets. More...

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Third Avenue Value Fund Comments on Devon Energy Corp
Devon (DVN) has benefitted from the merger of Crosstex Energy with Devon’s midstream assets to form the EnLink MLP which strategically unlocked billions of dollars of value that was hidden in these assets. Devon now is focused on the development and optimization of its five premier asset plays, including its prolific Eagle Ford assets and its Permian basin acreage. These actions have transformed Devon from a primarily natural gas producer to a more balanced oil and gas company. More...

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Third Avenue Value Fund Comments on Encana
Encana (ECA) was a pure play natural gas company when fracking technology dramatically expanded the supply of natural gas on the North American market. The company initially struggled to optimize its capital allocation across a very broad portfolio of assets, concentrated on gas. Under the new leadership of CEO Doug Suttles, the company unveiled a strategic shift to focus on its five core liquids‐rich plays in North America. Suttles moved to monetize underutilized assets including the sale of the Jonah, Big Horn and East Texas properties for over $4 billion and focus on the highest return assets. More...

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Third Avenue Value Fund Comments on Intel Corp
A case in point is Intel (INTC), a well‐financed leader in designing and manufacturing microprocessor chips. We invested in Intel common stock early 2013 when the shares sold off meaningfully on investor fears of a poor near term outlook due to weak PC end‐user demand and general macro related weakness in IT spending. In our view, these shorter term, more macro related concerns were ignoring Intel’s solid franchise in microprocessors for PCs and servers, which it has continued to enhance through its technological and manufacturing leadership. While Intel faces challenges in trying to capture share in faster growing mobile markets, we believe that there is substantial value in its core businesses. There are reportedly some 600 million PCs that are four years old or older vs. typical replacement cycle at around three years. Given the proliferation of new applications, many of which require greater computing power, an upgrade of one's PC, particularly in the workplace, eventually becomes a necessity. For anyone who has experienced the frustration of trying to work on an older PC, watching the hourglass or equivalent More...

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Third Avenue Value Fund Comments on Comerica Inc
We have preferred regional banks for three reasons. First, at TAM we focus on price to tangible book value (P/TBV) as opposed to simple P/B. Tangible book value is a better measure of intrinsic value as it excludes intangible assets which wouldn’t carry much value in liquidation. As discussed earlier, one of the dimensions we focus on as we evaluate companies is the assets. The valuations of KEY and CMA are much closer to peers listed above on a P/TBV basis. Evaluating just a single statistic may provide misleading conclusions when evaluating an investment. Thus, we also consider how well a company can compound its book value over time. As seen in the table above, both KEY and CMA are generating higher returns on assets (ROA) than peers. This is important as companies that generate higher returns deserve premium valuations. Again, we distinguish among the many metrics. We focus on ROA as the measure of ROA does not favor companies that carry higher leverage and perhaps higher risk. More...

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