Donald Smith is a newly added guru who focuses on low P/B stocks. This is his Q3 portfolio update.
If you don’t know about Donald Smith, he is the CIO of Donald Smith & Co. He began his career as an analyst with Capital Research Company and subsequently worked at Capital Guardian Trust Co. In 1980, Donald be-came the CIO of Home Insurance Company, and President of Home Port-folio Advisors, Inc., which he bought in 1983 and changed the name to Donald Smith & Co., Inc.
In 2010, Donald Smith & Co. has $3.6 billion under management. Over 30 years since inception compounded annualized return has been 15.3%. Over the last 10 years our annualized return is 12.1% versus ?0.4% for the S&P 500.
Mr. Smith was awarded a B.S. in Finance and Ac-counting by the University of Illinois, an MBA by Harvard University and a J.D. from UCLA Law School and was admitted to the Bar Association of California. He volunteered for Ben Graham in UCLA to conduct a study on low P/E strategy.
Donald Smith is a deep-value manager employing a strict bottom-up approach. He invests in stocks of out-of-favor companies selling at discounts to tangible book value. He looks for companies in the bottom docile of price-to-tangible book ratios and a positive outlook for earnings potential over the next 2-4 years.
As of 09/30/2010, Donald Smith & Co. owns 98 stocks with a total value of $2.7 billion. These are the details of the buys and sells that have the impact to portfolio of more than .1%.
This is the sector weightings of his portfolio:
These are the top 5 holdings of Donald Smith
Added: Micron Technology Inc. (MU, Financial)
Donald Smith added to his holdings in Micron Technology Inc. by 53.08%. His purchase prices were between $6.4585 and $8.89, with an estimated average price of $7.5. The impact to his portfolio due to this purchase was 1.44%. His holdings were 15,821,616 shares as of 09/30/2010.
Added: Airtran Holdings Inc. (AAI, Financial)
Donald Smith added to his holdings in Airtran Holdings Inc. by 73.27%. His purchase prices were between $4.24 and $7.34, with an estimated average price of $4.78. The impact to his portfolio due to this purchase was 1.41%. His holdings were 12,410,295 shares as of 09/30/2010.
Added: Sanminasci Corp. (SANM, Financial)
Donald Smith added to his holdings in Sanminasci Corp. by 461.74%. His purchase prices were between $9.04 and $15.86, with an estimated average price of $11.95. The impact to his portfolio due to this purchase was 1.34%. His holdings were 3,703,807 shares as of 09/30/2010.
Added: Overseas Shipholding Group Inc. (OSG, Financial)
Donald Smith added to his holdings in Overseas Shipholding Group Inc. by 45.18%. His purchase prices were between $31.89 and $42.34, with an estimated average price of $35.61. The impact to his portfolio due to this purchase was 0.54%. His holdings were 1,401,802 shares as of 09/30/2010.
Added: Tesoro Corp. (TSO, Financial)
Donald Smith added to his holdings in Tesoro Corp. by 7.19%. His purchase prices were between $10.54 and $13.24, with an estimated average price of $12.1. The impact to his portfolio due to this purchase was 0.41%. His holdings were 12,685,564 shares as of 09/30/2010.
Added: Imation Corp. (IMN)
Donald Smith added to his holdings in Imation Corp. by 405.31%. His purchase prices were between $8.53 and $10.62, with an estimated average price of $9.24. The impact to his portfolio due to this purchase was 0.21%. His holdings were 763,107 shares as of 09/30/2010.
Added: American National Insurance Company (ANAT)
Donald Smith added to his holdings in American National Insurance Company by 5.8%. His purchase prices were between $74.3 and $85.56, with an estimated average price of $78.99. The impact to his portfolio due to this purchase was 0.14%. His holdings were 949,012 shares as of 09/30/2010.
Added: Ingram Micro Inc. (IM)
Donald Smith added to his holdings in Ingram Micro Inc. by 3.99%. His purchase prices were between $14.87 and $17.05, with an estimated average price of $16.01. The impact to his portfolio due to this purchase was 0.12%. His holdings were 5,292,533 shares as of 09/30/2010.
Added: Flagstone Reinsurance Holdings Ltd. (FSR)
Donald Smith added to his holdings in Flagstone Reinsurance Holdings Ltd. by 21.18%. His purchase prices were between $10.02 and $11.35, with an estimated average price of $10.5. The impact to his portfolio due to this purchase was 0.12%. His holdings were 1,807,408 shares as of 09/30/2010.
New Purchase: Ishares Russell 2000 Value Index Fund (IWN)
Donald Smith initiated holdings in Ishares Russell 2000 Value Index Fund. His purchase prices were between $54.92 and $62.09, with an estimated average price of $59.13. The impact to his portfolio due to this purchase was 0.89%. His holdings were 391,659 shares as of 09/30/2010.
New Purchase: M/i Homes Inc. (MHO, Financial)
Donald Smith initiated holdings in M/i Homes Inc.. His purchase prices were between $9.04 and $11.43, with an estimated average price of $10.18. The impact to his portfolio due to this purchase was 0.26%. His holdings were 695,712 shares as of 09/30/2010.
New Purchase: Tennessee Commerce Bancorp Inc. (TNCC, Financial)
Donald Smith initiated holdings in Tennessee Commerce Bancorp Inc.. His purchase prices were between $4 and $6.8575, with an estimated average price of $4.95. The impact to his portfolio due to this purchase was 0.16%. His holdings were 1,090,812 shares as of 09/30/2010.
Reduced: Pinnacle West Capital Corp. (PNW)
Donald Smith reduced to his holdings in Pinnacle West Capital Corp. by 65%. His sale prices were between $36.24 and $41.69, with an estimated average price of $39.61. The impact to his portfolio due to this sale was -2.73%. Donald Smith still held 978,857 shares as of 09/30/2010.
Reduced: Sycamore Networks Inc. (SCMR)
Donald Smith reduced to his holdings in Sycamore Networks Inc. by 98.15%. His sale prices were between $16.62 and $33.37, with an estimated average price of $24.04. The impact to his portfolio due to this sale was -2.12%. Donald Smith still held 36,458 shares as of 09/30/2010.
Reduced: Nv Energy, Inc. (NVE)
Donald Smith reduced to his holdings in Nv Energy, Inc. by 34.51%. His sale prices were between $11.79 and $13.21, with an estimated average price of $12.78. The impact to his portfolio due to this sale was -1.08%. Donald Smith still held 4,277,995 shares as of 09/30/2010.
Reduced: Semiconductor Manufacturing Internationa (SMI)
Donald Smith reduced to his holdings in Semiconductor Manufacturing Internationa by 30.38%. His sale prices were between $3.08 and $3.99, with an estimated average price of $3.38. The impact to his portfolio due to this sale was -0.78%. Donald Smith still held 13,724,227 shares as of 09/30/2010.
Reduced: Aspen Insurance Holdings Ltd. (AHL)
Donald Smith reduced to his holdings in Aspen Insurance Holdings Ltd. by 35.1%. His sale prices were between $24.55 and $30.1, with an estimated average price of $27.94. The impact to his portfolio due to this sale was -0.56%. Donald Smith still held 944,813 shares as of 09/30/2010.
Reduced: Cooper Tire & Rubber Company (CTB)
Donald Smith reduced to his holdings in Cooper Tire & Rubber Company by 32.08%. His sale prices were between $16.19 and $22.75, with an estimated average price of $19.63. The impact to his portfolio due to this sale was -0.4%. Donald Smith still held 1,179,030 shares as of 09/30/2010.
Reduced: Tech Data Corp. (TECD)
Donald Smith reduced to his holdings in Tech Data Corp. by 23.81%. His sale prices were between $35.5 and $40.79, with an estimated average price of $38.53. The impact to his portfolio due to this sale was -0.34%. Donald Smith still held 748,657 shares as of 09/30/2010.
Reduced: Validus Holdings Ltd (VR)
Donald Smith reduced to his holdings in Validus Holdings Ltd by 46.99%. His sale prices were between $24.46 and $26.78, with an estimated average price of $25.36. The impact to his portfolio due to this sale was -0.24%. Donald Smith still held 279,373 shares as of 09/30/2010.
Sold Out: Alaska Air Group Inc. (ALK)
Donald Smith sold out his holdings in Alaska Air Group Inc.. His sale prices were between $43.24 and $54.09, with an estimated average price of $48.69.
Sold Out: Partnerre Ltd. (PRE)
Donald Smith sold out his holdings in Partnerre Ltd.. His sale prices were between $70.12 and $79.99, with an estimated average price of $74.77.
If you don’t know about Donald Smith, he is the CIO of Donald Smith & Co. He began his career as an analyst with Capital Research Company and subsequently worked at Capital Guardian Trust Co. In 1980, Donald be-came the CIO of Home Insurance Company, and President of Home Port-folio Advisors, Inc., which he bought in 1983 and changed the name to Donald Smith & Co., Inc.
In 2010, Donald Smith & Co. has $3.6 billion under management. Over 30 years since inception compounded annualized return has been 15.3%. Over the last 10 years our annualized return is 12.1% versus ?0.4% for the S&P 500.
Mr. Smith was awarded a B.S. in Finance and Ac-counting by the University of Illinois, an MBA by Harvard University and a J.D. from UCLA Law School and was admitted to the Bar Association of California. He volunteered for Ben Graham in UCLA to conduct a study on low P/E strategy.
Donald Smith is a deep-value manager employing a strict bottom-up approach. He invests in stocks of out-of-favor companies selling at discounts to tangible book value. He looks for companies in the bottom docile of price-to-tangible book ratios and a positive outlook for earnings potential over the next 2-4 years.
As of 09/30/2010, Donald Smith & Co. owns 98 stocks with a total value of $2.7 billion. These are the details of the buys and sells that have the impact to portfolio of more than .1%.
- New Purchases: IWN, MHO, TNCC,
- Added Positions: MU, AAI, SANM, OSG, TSO, IMN, ANAT, FSR, IM,
- Reduced Positions: PNW, SCMR, NVE, SMI, AHL, CTB, TECD, VR,
- Sold Out: ALK, PRE,
This is the sector weightings of his portfolio:
| Financials | 21.5% |
| Consumer Services | 21.4% |
| Industrials | 13.6% |
| Utilities | 10.2% |
| Basic Materials | 8.5% |
| Oil & Gas | 8.2% |
| Technology | 8.2% |
| Consumer Goods | 3.8% |
These are the top 5 holdings of Donald Smith
- Tesoro Corp. (TSO) - 12,685,564 shares, 6.18% of the total portfolio. Shares added by 7.19%
- Dillard's Inc. (DDS) - 6,445,322 shares, 5.56% of the total portfolio. Shares reduced by 2.49%
- JetBlue Airways Corp. (JBLU) - 21,796,604 shares, 5.32% of the total portfolio. Shares reduced by 2.63%
- Yamana Gold Inc. (AUY) - 11,127,135 shares, 4.63% of the total portfolio. Shares added by 1.83%
- CNA Financial Corp. (CNA) - 4,281,054 shares, 4.37% of the total portfolio. Shares reduced by 0.01%
Added: Micron Technology Inc. (MU, Financial)
Donald Smith added to his holdings in Micron Technology Inc. by 53.08%. His purchase prices were between $6.4585 and $8.89, with an estimated average price of $7.5. The impact to his portfolio due to this purchase was 1.44%. His holdings were 15,821,616 shares as of 09/30/2010.
Added: Airtran Holdings Inc. (AAI, Financial)
Donald Smith added to his holdings in Airtran Holdings Inc. by 73.27%. His purchase prices were between $4.24 and $7.34, with an estimated average price of $4.78. The impact to his portfolio due to this purchase was 1.41%. His holdings were 12,410,295 shares as of 09/30/2010.
Added: Sanminasci Corp. (SANM, Financial)
Donald Smith added to his holdings in Sanminasci Corp. by 461.74%. His purchase prices were between $9.04 and $15.86, with an estimated average price of $11.95. The impact to his portfolio due to this purchase was 1.34%. His holdings were 3,703,807 shares as of 09/30/2010.
Added: Overseas Shipholding Group Inc. (OSG, Financial)
Donald Smith added to his holdings in Overseas Shipholding Group Inc. by 45.18%. His purchase prices were between $31.89 and $42.34, with an estimated average price of $35.61. The impact to his portfolio due to this purchase was 0.54%. His holdings were 1,401,802 shares as of 09/30/2010.
Added: Tesoro Corp. (TSO, Financial)
Donald Smith added to his holdings in Tesoro Corp. by 7.19%. His purchase prices were between $10.54 and $13.24, with an estimated average price of $12.1. The impact to his portfolio due to this purchase was 0.41%. His holdings were 12,685,564 shares as of 09/30/2010.
Added: Imation Corp. (IMN)
Donald Smith added to his holdings in Imation Corp. by 405.31%. His purchase prices were between $8.53 and $10.62, with an estimated average price of $9.24. The impact to his portfolio due to this purchase was 0.21%. His holdings were 763,107 shares as of 09/30/2010.
Added: American National Insurance Company (ANAT)
Donald Smith added to his holdings in American National Insurance Company by 5.8%. His purchase prices were between $74.3 and $85.56, with an estimated average price of $78.99. The impact to his portfolio due to this purchase was 0.14%. His holdings were 949,012 shares as of 09/30/2010.
Added: Ingram Micro Inc. (IM)
Donald Smith added to his holdings in Ingram Micro Inc. by 3.99%. His purchase prices were between $14.87 and $17.05, with an estimated average price of $16.01. The impact to his portfolio due to this purchase was 0.12%. His holdings were 5,292,533 shares as of 09/30/2010.
Added: Flagstone Reinsurance Holdings Ltd. (FSR)
Donald Smith added to his holdings in Flagstone Reinsurance Holdings Ltd. by 21.18%. His purchase prices were between $10.02 and $11.35, with an estimated average price of $10.5. The impact to his portfolio due to this purchase was 0.12%. His holdings were 1,807,408 shares as of 09/30/2010.
New Purchase: Ishares Russell 2000 Value Index Fund (IWN)
Donald Smith initiated holdings in Ishares Russell 2000 Value Index Fund. His purchase prices were between $54.92 and $62.09, with an estimated average price of $59.13. The impact to his portfolio due to this purchase was 0.89%. His holdings were 391,659 shares as of 09/30/2010.
New Purchase: M/i Homes Inc. (MHO, Financial)
Donald Smith initiated holdings in M/i Homes Inc.. His purchase prices were between $9.04 and $11.43, with an estimated average price of $10.18. The impact to his portfolio due to this purchase was 0.26%. His holdings were 695,712 shares as of 09/30/2010.
New Purchase: Tennessee Commerce Bancorp Inc. (TNCC, Financial)
Donald Smith initiated holdings in Tennessee Commerce Bancorp Inc.. His purchase prices were between $4 and $6.8575, with an estimated average price of $4.95. The impact to his portfolio due to this purchase was 0.16%. His holdings were 1,090,812 shares as of 09/30/2010.
Reduced: Pinnacle West Capital Corp. (PNW)
Donald Smith reduced to his holdings in Pinnacle West Capital Corp. by 65%. His sale prices were between $36.24 and $41.69, with an estimated average price of $39.61. The impact to his portfolio due to this sale was -2.73%. Donald Smith still held 978,857 shares as of 09/30/2010.
Reduced: Sycamore Networks Inc. (SCMR)
Donald Smith reduced to his holdings in Sycamore Networks Inc. by 98.15%. His sale prices were between $16.62 and $33.37, with an estimated average price of $24.04. The impact to his portfolio due to this sale was -2.12%. Donald Smith still held 36,458 shares as of 09/30/2010.
Reduced: Nv Energy, Inc. (NVE)
Donald Smith reduced to his holdings in Nv Energy, Inc. by 34.51%. His sale prices were between $11.79 and $13.21, with an estimated average price of $12.78. The impact to his portfolio due to this sale was -1.08%. Donald Smith still held 4,277,995 shares as of 09/30/2010.
Reduced: Semiconductor Manufacturing Internationa (SMI)
Donald Smith reduced to his holdings in Semiconductor Manufacturing Internationa by 30.38%. His sale prices were between $3.08 and $3.99, with an estimated average price of $3.38. The impact to his portfolio due to this sale was -0.78%. Donald Smith still held 13,724,227 shares as of 09/30/2010.
Reduced: Aspen Insurance Holdings Ltd. (AHL)
Donald Smith reduced to his holdings in Aspen Insurance Holdings Ltd. by 35.1%. His sale prices were between $24.55 and $30.1, with an estimated average price of $27.94. The impact to his portfolio due to this sale was -0.56%. Donald Smith still held 944,813 shares as of 09/30/2010.
Reduced: Cooper Tire & Rubber Company (CTB)
Donald Smith reduced to his holdings in Cooper Tire & Rubber Company by 32.08%. His sale prices were between $16.19 and $22.75, with an estimated average price of $19.63. The impact to his portfolio due to this sale was -0.4%. Donald Smith still held 1,179,030 shares as of 09/30/2010.
Reduced: Tech Data Corp. (TECD)
Donald Smith reduced to his holdings in Tech Data Corp. by 23.81%. His sale prices were between $35.5 and $40.79, with an estimated average price of $38.53. The impact to his portfolio due to this sale was -0.34%. Donald Smith still held 748,657 shares as of 09/30/2010.
Reduced: Validus Holdings Ltd (VR)
Donald Smith reduced to his holdings in Validus Holdings Ltd by 46.99%. His sale prices were between $24.46 and $26.78, with an estimated average price of $25.36. The impact to his portfolio due to this sale was -0.24%. Donald Smith still held 279,373 shares as of 09/30/2010.
Sold Out: Alaska Air Group Inc. (ALK)
Donald Smith sold out his holdings in Alaska Air Group Inc.. His sale prices were between $43.24 and $54.09, with an estimated average price of $48.69.
Sold Out: Partnerre Ltd. (PRE)
Donald Smith sold out his holdings in Partnerre Ltd.. His sale prices were between $70.12 and $79.99, with an estimated average price of $74.77.
