Martin Whitman

Martin Whitman

Last Update: 09-25-2015
Related: Third Avenue Management

Number of Stocks: 37
Number of New Stocks: 2

Total Value: $1,689 Mil
Q/Q Turnover: 6%

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

Martin Whitman Watch

  • Third Avenue Management Comments on Visteon

    Many people may remember Visteon (NYSE:VC) as the automotive parts company spun off from Ford that fell on hard times during the financial crisis. Today it is a much different company than the Visteon of yore. Given its “special situation” status, having over $60 per share in net cash and a stock price of roughly $100, the stock screened poorly on a statistical basis, enabling the Fund to acquire shares during the quarter at an attractive valuation of around 6.4 times pro forma adjusted EBITDA as the company continued on its transformational path. With its large net cash position, Visteon certainly meets our hurdle of a solid balance sheet. More excitingly, we think the transformation of the company has set it up to accelerate its book value compounding.


  • Third Avenue Management Comments on 1‐800‐

    Another company we purchased during the quarter is 1‐800‐ (800‐Flowers) (NASDAQ:FLWS). We can’t think of many better examples of a management team’s patience around investing than their recent acquisition of the iconic company Harry & David. Management studied the business for more than a decade and had multiple opportunities to purchase the asset at much higher prices. We see a fortunate parallel with our own approach to the company, having first met with the management when it was trading at significantly higher prices but patiently waiting for the right opportunity to invest. The opportunity came during the quarter when shares declined by nearly thirty percent, allowing us to invest at an undemanding valuation less than eight times EBITDA, with between 35%‐50% up to our valuation estimates.


  • Third Avenue Management Comments on EP Energy Corp

    As the energy markets churned weaker over the quarter, we continued to look for attractive investment opportunities, as it was our sense that many investors were shooting first and asking questions later on their sales. We continue to believe that the current price weakness is a supply driven shock, and not what we believe would be a more worrisome lack of demand driven sell off.

    The one‐two punch of higher Saudi Arabian production and potential future Iranian production have pushed oil down to the low $40 per barrel range, well below what we believe is a realistic industry wide break‐even level in the mid‐$60’s or higher, even with the benefit of recent service cost reductions that are likely not sustainable over time. In the near term we have seen a strong demand response in higher oil use and over the medium term we would expect a drop in production of higher cost barrels, which would reduce supply and lead to higher oil prices.


  • Marty Whitman's Third Avenue Buys 2 New Stocks, Adds to 6 in Q3

    Third Avenue Management (Trades, Portfolio)’s Third Avenue Value Fund purchased two new stocks in its third quarter ended July 31 and added to six existing holdings, managers disclosed Friday.

    The value fund is led by Chip Rewey, a speaker at the 2016 GuruFocus Value Conference, and is part of the group of funds composing the financial management company founded by investor Marty Whitman. The fund’s management has apportioned 26% of the portfolio to Financial Services, 15.5% to Consumer Cyclical and 14% to Basic Materials as its largest sector weightings. At third quarter-end, the portfolio contained 37 stocks with a value of $1.69 billion.


  • Top 5 Holdings of Third Avenue's Flagship Fund Manager Chip Rewey

    Chip Rewey, a GuruFocus Value Conference 2016 speaker, joined Third Avenue Management (Trades, Portfolio) in 2014 as lead portfolio manager for the value and small-cap funds and upholds many of the firm’s investing tenets as developed by founder Marty Whitman – centered on long-term factors including book value, creditworthiness and net asset value (NAV).

    “Our investment process is geared to identify good businesses that are led by strong management teams who are good capital allocators, along with a significant discount to a fair value in the market,” Rewey said in his third quarter letter. “Creditworthiness is the starting point for us when assessing any investment. Investing in well capitalized companies allows us to wait out earnings swings because we are confident our management teams will not be forced to do things that would hurt shareholder value to meet short-term financial considerations.”


  • GuruFocus Interview: Deep Value Investor Chip Rewey of Third Avenue

    When Marty Whitman stepped down in 2012 from managing the flagship Value Fund at his firm Third Avenue Management (Trades, Portfolio), it was during the midst of a difficult environment for deep value investors. Robert “Chip” Rewey now oversees the Value Fund and four others at Third Avenue and is staying true to Whitman’s style, which includes maintaining a concentrated portfolio with an eye towards long-term returns.

    Mr. Rewey recently took the time to answer questions from GuruFocus over email about topics ranging from his current holdings to book recommendations.


  • Third Avenue Value Fund Reports on Investment Insight in its 2015 Semi-Annual Report

    Martin Whitman (Trades, Portfolio) recently released his semi-annual shareholder report for the Third Avenue Value Fund which detailed the fund’s primary investment focus areas and notable trading activity for the first six months of the year through April 30, 2015.

    Martin Whitman (Trades, Portfolio) is the founder of Third Avenue Management (Trades, Portfolio). He is also chairman of the board and the firm’s lead portfolio manager. The Third Avenue Value Fund is also managed by Chip Rewey, Yang Lie, Michael Lehmann and Victor Cunningham. The Third Avenue Value Fund is an international portfolio focused on value stocks. It has two share classes, the institutional fund (TAVFX) and the investor fund (TVFVX).  

  • Martin Whitman Buys Three New Stakes

    Martin Whitman (Trades, Portfolio), founder and portfolio manager of the Third Avenue Value Fund, is known as a “buy and hold” value investor. He looks for businesses he understands that have strong finances and effective management with shares that are selling below intrinsic value.

    The performance of Third Avenue Value Fund suggests that his strategy is a sound one. In 2014, it recorded returns of 4.88%. In 2013, returns were nearly four times better than that (18.84%) and, in 2012, they were even better (27.48%).


  • Third Avenue Value Fund Invests in Homebuilding Companies During Q2

    Two of Third Avenue Value Fund’s three new holdings are in the homebuilding sector, reflecting the fund’s faith in the strengthening U.S. housing market.

    In the shareholder letter for the second quarter ended April 30, the portfolio managers wrote that a combination of favorable demographics, loosening financial constraints, and better economic trends will provide steady improvement for the housing market in the fund’s investment horizon.


  • Martin Whitman Recent Buy: Masco Corp

    Martin Whitman (Trades, Portfolio) is founder and portfolio manager of the Third Avenue Value Fund. 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.

    During 2015 Q2 the investor bought a big stake of Masco Corp (MAS) with an impact of 2.13% on his portfolio. He bought 1,479,930 shares that is the 0.43% of outstanding shares of the company. Since that buy, the price of the stock didn’t face any change.


  • Third Avenue Management Sells Stake in Target

    Third Avenue Management (Trades, Portfolio), the creation of Martin Whitman (Trades, Portfolio), is guided by current balance sheets, not projected future revenues and earnings, when making investment decisions. While many of the gurus we follow struggled in 2014, Third Avenue Management (Trades, Portfolio) enjoyed returns in positive territory (4.88%). Third Avenue’s returns in 2013 were even better (18.84%); the returns in 2012 (27.48%) were better still.

    Third Avenue Management (Trades, Portfolio) sold its stake in Target Corp (NYSE:TGT), the discount retailer based in Minneapolis, Minnesota. Third Avenue sold the 753,665 shares it acquired in the last two quarters of 2014 for an average price of $67.5 per share. The investment had a 42% IRR according to the firm's shareholder letter. 


  • Submit Your Investing Questions to Third Avenue's Chip Rewey for Exclusive Q&A

    Robert “Chip” Rewey, leader of Martin Whitman (Trades, Portfolio)’s Third Avenue Management (Trades, Portfolio) Value and Small-Cap teams, will join GuruFocus for an exclusive interview to answer readers’ questions. Have questions about Mr. Rewey’s investing philosophy or top holdings? Simply post them in the comments box below.

    Mr. Rewey is the lead portfolio manager for five of Third Avenue’s funds including the Value Fund and Small-Cap Value Fund. Before joining Third Avenue last year, Mr. Rewey oversaw the smid, mid, large and all-cap investment strategies at Cramer Rosenthal McGlynn for 10 years.  

  • Marty Whitman's 2015 Q2 Chairman's Letter for Third Avenue Management

    Dear Fellow Shareholders:

    Financial accounting is based on one of two protocols – Generally Accepted Accounting Principles, or GAAP, used in the United States; and International Financial Reporting System or IFRS, used in the rest of the world.


  • Third Avenue's Value Fund Second Quarter 2015 Shareholder Letter

    Dear Fellow Shareholders,

    Portfolio holdings are subject to change without notice. The following is a list of Third Avenue Value Fund’s 10 largest issuers, and the percentage of the total net assets each represented, as of April 30, 2015:


  • Can Marty Whitman's Third Avenue Get Back On Track?

    Legendary investor Marty Whitman, 90, is holding court in his office, wearing a blue sweatshirt and khakis, with his feet up on the coffee table. When the discussion turns to a topic he likes—how his form of value investing differs from the classic style of Benjamin Graham and David Dodd, say—his eyes flash and his whole face lights up. But he’s known as a curmudgeon for a reason, and when the subject is something he’d rather not discuss, he practically growls.

    There has been a lot to growl about lately. Third Avenue Management (Trades, Portfolio), the mutual-fund firm Whitman founded in 1986, has struggled with management turnover and poor performance. Assets have shrunk to $10.2 billion from a peak of $26 billion in 2006. The firm’s flagship fund, Third Avenue Value (TVFVX), which Whitman ran from its 1990 inception through 2012, now rates a meager two stars from Morningstar. It has just $2 billion in assets, and is on its second manager since his departure. Third Avenue International Value (TVIVX), which was already shrinking when longtime manager Amit Wadhwaney departed last year, lost more than 60% of its assets thereafter; it now has $269 million.


  • Martin Whitman Sells Holdings on Hong Kong Stock Exchange

    Many of the observers of the Hong Kong Stock Exchange say it is the world’s hottest exchange right now, and that is a hard point to dispute. The Hang Seng Index, which keeps track of daily movements of the largest companies in the exchange and is the primary indicator of the market’s track record, has been on a tear, and Hong Kong wants to raise the limit on cash flows from mainland China by 30% to keep pace with demand.

    Stocks are up 10.9% since March 27, when the exchange’s rules were eased.


  • Martin Whitman Adds to Holdings in Financial Services Companies

    Of the 20 stocks in which guru Martin Whitman (Trades, Portfolio) traded in January of this year, he added to his holdings in eight. There was no real pattern to Whitman’s stock buys – except for the facts that two were in the Banking sector, and they dwarfed all of Whitman’s other January purchases.

    Whitman’s investment in Comerica Inc (NYSE:CMA), a financial services company that got its start in Detroit in 1849 and has been headquartered in Dallas since 2007, was his largest in terms of money spent on shares. Whitman bought 335,200 shares for an average price of $44.62 per share, bringing his stake to 2,152,239 shares and making it the 13th-largest by volume in his portfolio.


  • Guru Investors' Most-Bought European Financial Stocks

    While the financial crisis and macroeconomic headwinds have cast a shadow on the European banking sector, value investors at Oakmark in a memo today said they found select opportunities in the area based on their bottom-up research.

    “…We felt that banks with less capital-intensive businesses, such as asset management or advisory, would be attractive as they could more easily navigate these higher capital requirements,” wrote Jason Long, a partner at the firm. “We also believed that increased capital requirements would result in a lower return on equity, which we incorporated into our valuations. Also, it became evident that banks with strong deposit franchises and liquidity would have a funding cost advantage over wholesale-funded banks and be better positioned during times of crisis. Finally, we felt banks with significant scale would be able to deliver products and services more efficiently than their peers.”


  • Martin Whitman Adds to Stake in Michelin

    Once on the hit TV series “Happy Days,” Mrs. Cunningham had to fill in for her husband at his hardware store. I don’t remember why Mr. Cunningham needed her to run the store for him – perhaps he had to go on a business trip.

    Anyway, when he returned, he found that his wife had been running a sale on paint. Her asking price was ridiculously low, as I recall, and Mr. Cunningham was upset. He thought his wife had ruined his profit margin – until she explained her reasoning. On her trips to the grocery store, she had often seen potatoes priced very low, but they were placed next to the items that most people like to eat on a baked potato – butter, sour cream, bacon bits, chives, etc. – and those items were always marked up.


  • Martin Whitman's Top Growth Stocks

    Martin Whitman (Trades, Portfolio) of Third Avenue Value Fund is a contrarian investor who looks to invest in "safe companies that are cheaply priced."

    The business has to be easy to understand, have strong management, strong finances and strong a strong legal framework. The stock also has to be significantly discounted in relation to its intrinsic value while also having potential for attractive growth.


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