Third Avenue Management

Third Avenue Management

Last Update: 02-13-2015
Related: Martin Whitman

Number of Stocks: 139
Number of New Stocks: 9

Total Value: $3,967 Mil
Q/Q Turnover: 9%

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

Third Avenue Management Watch

  • How Investors Should Think About Holding Companies, with Amit Wadhwaney of Third Avenue Management



  • Triple Screen Winner: Westwood Holding Group

    Each month, GuruFocus writer Vera Yuan researches and presents lists of stocks that manage to pass multiple screeners, in different regions (How Many Stocks Can Pass GuruFocus Value Screeners? – March 6, 2015).


    For investors, it’s an effective way of screening the screeners. While individual screeners do narrow the realm of possible investments, they still leave us with long lists of potential names. Choosing from among companies that get through two or more screens adds one more level of quality (although, there may be duplications among the screeners), and reduces the field to a handful.

      


  • Weekly 3-Year Low Highlights: ABI, YOKU, DAR, BPT, EFC

    According to GuruFocus list of 3-year lows, Safety First Trust Series 2009-2 (ABI), Youku Tudou Inc (YOKU), Darling Ingredients Inc (DAR), BP Prudhoe Bay Royalty Trust (BPT) and Ellington Financial LLC (EFC) have all reached their 3-year lows.


    Safety First Trust Series 2009-2 reached $22.98

      


  • Weekly Guru Bargains Highlights: PKX, CM, PXD, BNS, BBL

    According to GuruFocus updates, these stocks have declined the most since Gurus have bought.


    POSCO (PKX): Down 24% since RS Investment Management (Trades, Portfolio) bought in the quarter ended on 2014-09-30

      


  • Third Avenue: Picking Low Hanging Fruit

    David Barse of Third Avenue Management (Trades, Portfolio) went on CNBC where he discuss his picks stock picks for a volatile market.


      


  • Guru Stocks at 52-Week Lows: DCM, NTT, BBVA, MFG, PKX

    According to GuruFocus list of 52-week lows, these Guru stocks have reached their 52-week lows.


    NTT DoCoMo Inc (DCM) Reached the 52-Week Low of $14.91

      


  • Weekly CEO Buys Highlight: ENH, JRVR, RM, RYN, CLMS

    According to GuruFocus Insider Data, these are the largest CEO buys during the past week. The overall trend of CEOs is illustrated in the chart below:


    Endurance Specialty Holdings Ltd (ENH): Chmn & CEO John Charman Bought 150,000 Shares

      


  • Martin Whitman's Third Avenue 4Q 2014 Shareholder Letter

    Dear Fellow Shareholders,


    Efficient Market Theorists (EMTs) place a premium value on being ignorant about companies and the securities the companies issue. Such EMTs include most financial academics as well as promoters of Index Funds and Exchange Traded Funds (ETFs) such as John C. Bogle, founder of the Vanguard Group. For these EMTs, research is restricted to studying markets and security price fluctuations. To EMTs the study of companies and securities is someone else’s business.

      


  • Third Avenue International Value Fund Q4 Commentary

    Dear Fellow Shareholders,


    As you all well know, but it may be worth revisiting in the context of recent Fund performance, the Third Avenue International Value Fund (Fund) employs an opportunistic and long-term approach to fundamental value investing across international markets. The Fund has an unconstrained investment mandate which allows us to pursue what we believe are the best opportunities across geographies, industries and asset classes. We uncover each one of these opportunities by conducting thorough bottom-up company-specific research. The investments we select come together in a concentrated, high conviction portfolio, typically between 30 - 40 securities (vs. ~3000 stocks in the MSCI ACWI ex USA Index). It is natural, then, that our process results in a Fund showing minimal overlap with any broad market index. Many of our holdings are not part of an index at all and the Fund in aggregate has a 98% active share.1 Indeed, it is something of a rare occurrence for the Fund and an index to have similar characteristics or performance. Further, given a highly differentiated portfolio with minimal overlap with any index, it should not be surprising that high levels of tracking error, meaning periods of material outperformance and underperformance, have been the norm over the life of the Fund.

      


  • Third Avenue Small Cap Fund Q4 Commentary

    Dear Fellow Shareholders,


    I am honored to have taken the sole lead position on the Third Avenue Small-Cap Value Fund (Fund). My co-Portfolio Manager, Tim Bui, and I will continue to pursue the concentrated approach to value investing that has been the pledge of the firm since its founding. This vision for the Fund is rooted in Marty Whitman’s investment philosophy, which I embrace fully. Marty’s teachings have been an important influence on my own approach to investing.

      


  • Marty Whitman's Third Avenue Funds Q4 Portfolio Manager Commentary

    Dear Fellow Shareholders,

    Efficient Market Theorists (EMTs) place a premium value on being ignorant about companies and the securities the companies issue. Such EMTs include most financial academics as well as promoters of Index Funds and Exchange Traded Funds (ETFs) such as John C. Bogle, founder of the Vanguard Group. For these EMTs, research is restricted to studying markets and security price fluctuations. To EMTs the study of companies and securities is someone else’s business. For EMTs, trying to conduct research on companies and securities is a waste of time and money. They believe that passive investors should hold funds having the lowest expense ratios in the form of ETFs and Index Funds which do not have to bear the expense of having to undertake fundamental research in depth. To prove that fundamental research is useless for passive market participants, EMTs correctly point out that no active investment vehicles (from Mutual Funds to ETFs) outperform a market or benchmark consistently. Consistently is a dirty word meaning all the time. Consistency is an absolutely phony test because it de facto imposes a short term investment horizon. The most any active investor (or any investor for that matter) can hope to achieve is to outperform (or at least equal the performance after fees) most of the time, on average, and over the long term. Some mutual funds, such as those managed by Third Avenue, are value funds where buy, sell and hold decisions are made based almost wholly on examining in depth companies and the securities they issue. Other mutual funds are run by high volume traders who place primary emphasis on forecasting near term market movements and near term security prices. Many value funds, including most of those managed by Third Avenue Management (Trades, Portfolio) (TAM), do outperform most of the time, on average, and over the long term as was demonstrated to investors at the October 2014 Third Avenue Value Conference. I do agree that the average mutual fund which concentrates on forecasting markets and security prices probably has a very tough time trying to outperform consistently. But those Funds are not TAM Funds.  


  • The Value Conference in Review - Third Avenue Credit Team on Event Driven Investing

    Watch the video here.


    At Third Avenue’s 17th Annual Value Conference, Third Avenue’s Credit team presented some of the very unique work they are doing in the event driven space, particularly within distressed credit and restructurings. The team walked us through their participation in the restructuring of five different companies in different countries and sectors: Ideal Standard, Codere, Energy Future Holdings, Momentive Performance Materials and 21st Century Oncology.

      


  • The Value Conference in Review - Third Avenue Credit Team on Event Driven Investing

    Watch the Clip Here


    At Third Avenue’s 17th Annual Value Conference, Third Avenue’s Credit team presented some of the very unique work they are doing in the event driven space, particularly within distressed credit and restructurings. The team walked us through their participation in the restructuring of five different companies in different countries and sectors: Ideal Standard, Codere, Energy Future Holdings, Momentive Performance Materials and 21st Century Oncology.

      


  • Weekly CEO Buys Highlight: SONS, OPK, AKS, ARAY, ENH

    According to GuruFocus Insider Data, these are the largest CEO buys during the past week. The overall trend of CEOs is illustrated in the chart below:


    Sonus Networks Inc (SONS): CEO and President Raymond P Dolan Bought 1,000,000 Shares

      


  • Third Avenue Management's Amit Wadhwaney On Holding Companies

    The most impressive thing about Warren Buffett (Trades, Portfolio) is that he has created his huge wealth by repeatedly making great investment decisions.


    To be like Warren, and be able to achieve investment success across various industries and types of companies, we need to have more than one tool in our toolbox.

      


  • 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:  


  • 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.


    Portfolio Activity

      


  • Third Avenue Small-Cap Value Fund Second Quarter Commentary

    Dear Fellow Shareholders,


    We are pleased to welcome Chip Rewey to Third Avenue’s Small Cap team as a fellow shareholder and Co‐Lead Manager, working closely with Curtis Jensen. As outlined in Third Avenue Value Fund’s letter, Chip has also joined that team as Lead Portfolio Manager. These appointments not only speak to Chip’s decades of successful experience at like‐minded investment firms, but also to his embracing of a collaborative, team approach to investing, as well as to Marty Whitman’s time‐tested deep value philosophy. Chip evidences all the characteristics we seek in our teammates: an independent and curious mind; a high level of energy and a sense of urgency in a job that we are privileged to do every day. Chip’s addition will help us to build on the terrific momentum that this team has developed.

      


  • Third Avenue Management Comments on Prosperity Bancshares

    The addition of Prosperity Common expanded the Fund’s bank basket to six holdings. Houston-based Prosperity Bancshares (PB) is a bank holding company operating with a traditional community banking mindset, a far cry from the behemoth money center banks that have been exposed as too big to manage, too big to regulate and just plain too conflicted. it appears that management runs a tight ship: the company has been profitable every year since its formation, even during the massive economic downturn in Texas in the late 1980’s and during the 2008/2009 financial crisis. Historically the company has grown by making opportunistic acquisitions of banks and branches around Texas. During 2008, for example, the bank acquired $3.6 billion of deposits and certain assets of Franklin Bank from the Federal Deposit insurance Corporation, as receiver. Management’s wellmanaged, bolt-on acquisition strategy along with superb efficiency and conservative underwriting have produced an enviable track record, with adjusted book value1 compounding at mid-teens rates over the past five, ten and fifteen years. Our analysis suggests that management has an ample runway to continue doing more of the same. prosperity’s operational record, based on asset quality, capital adequacy and profitability recently drew the attention of Forbes Magazine2, which named it as “america’s Best Bank.”


    At their present valuation, which approximates 15x 2014 earnings, the shares may not appear obviously undervalued. We note, however, that prosperity’s current earnings power is significantly depressed, we think more temporarily than not, by the presence of a high proportion of low-rate assets, e.g., government securities now on the books. Should interest rates and economic conditions gradually “normalize,” the company’s earning power will undoubtedly grow and the true multiple of earnings will be a much more favorable 12x-13x, per our estimates. Should business conditions remain unchanged in the periods ahead, we believe prosperity Common has limited downside. in spite of the currently depressed earnings, prosperity continues to earn a respectable 8% to 9% return on equity, a reasonable level given the relatively low-risk approach embraced by management.

      


  • Third Avenue Management Comments on Actuant

    We view Wisconsin-based Actuant (ATU) as an industrial “miniconglomerate” distinguished by its operational strength, broadly respected brands and deep distributor relationships. Historically acquisitive, the company manufactures highly specialized industrial products, everything from hydraulic tools for the construction, rail and power generation industries, to pipeline connectors and concrete tensioners for the oil and gas industry, to smaller motion control systems used by truck, auto andWe view Wisconsin-based actuant as an industrial “miniconglomerate” distinguished by its operational strength, broadly respected brands and deep distributor relationships. Historically acquisitive, the company manufactures highly specialized industrial products, everything from hydraulic tools for the construction, rail and power generation industries, to pipeline connectors and concrete tensioners for the oil and gas industry, to smaller motion control systems used by truck, auto and agricultural vehicle Original Equipment Manufacturers (“OEMs”). Management’s efforts to diversify the business have expanded the company’s presence into 30 countries, dampened the cyclicality of many of its industrial end markets and provided an entre into the rapidly evolving energy sectors where long-term growth prospects appear robust.


    actuant’s shares appear to have fallen out of favor, however, owing to (i) sluggish top-line results in the industrial segment and disappointing margins within the energy group, as reported in the company’s most recent fiscal quarter; (ii) lingering doubts about the sustainability of acquisition-led growth (management recently had to write-down some of the goodwill on the company’s balance sheet); and (iii) uncertainty created by the start of a recent management transition.

      


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