Donald Smith Increases Stakes in Citigroup and Alamos Gold

Endurance Specialty Holdings gets new position in portfolio

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Dec 07, 2015
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Donald G. Smith is the CIO of Donald Smith (Trades, Portfolio) & Co., a registered investment adviser specializing in managing value equity accounts for tax-exempt and taxable funds, and high net worth individuals. The firm was formed in 1975 as Home Portfolio Advisors Inc.

Smith’s portfolio has 77 stocks. The following are his most weighted buys.

The largest buy was Citigroup Inc. (C), which is new in Smith’s portfolio. He bought 69,332 shares in the second quarter. This quarter the position saw an increase of 1708% with an impact of 1.52% on Smith’s portfolio.

Citigroup had a market cap of $159.41 million. It is a financial services holding company, whose businesses provide consumers, corporations, governments and institutions with a range of financial products and services, including consumer banking, credit cards, corporate and investment banking, securities brokerage and wealth management.

The rating of Citigroup’s profitability is 5/10 and is confirmed by its weak returns that are underperforming the Global Banks - Global industry.

In this quarter, Jim Simons (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Bruce Berkowitz (Trades, Portfolio) made Citigroup a new buy.

Endurance Specialty Holdings Ltd. (ENH) was new buy for Smith. He bought 950,050 shares at $62.25; the deal had an impact of 1.5% on his portfolio.

Endurance Specialty Holdings has a market cap of $4.38 billion. The company's business is organized into two business segments – Insurance and Reinsurance.

The rating of Endurance’s profitability is 6/10. ROE is underperforming the Global Insurance - Property & Casualty industry while ROA is overperforming.

Jeremy Grantham (Trades, Portfolio) and Jim Simons (Trades, Portfolio) had Endurance Specialty as new buys in the third quarter while other investors like RS Investment Management (Trades, Portfolio), Richard Pzena (Trades, Portfolio), David Dreman (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) increased their stakes.

The investment team also liked Alamos Gold Inc. (AGI). The position was established in the second quarter. This quarter it saw a huge increase of 1824.66%. The deal had an impact of 1.42% on Smith’s portfolio.

Alamos Gold has a market cap of $21.67 billion. The company is engaged in the exploration, mine development and extraction of precious metals. The company owns and operates the Mulatos mine and holds the mineral rights to the Salamandra group of concessions in Sonora, Mexico, which includes several known satellite gold occurrences.

Alamos’ profitability rating is 6/10; returns are negative and are underperforming the Global Gold industry.

Alamos Gold saw huge increases of 540.51% and 110.03% by Jim Simons (Trades, Portfolio). Mario Gabelli (Trades, Portfolio) and a minor increase of 8.36% by Chuck Royce (Trades, Portfolio).

Aspen Insurance Holdings Ltd. (AHL) was another popular target. It has had a position in the portfolio since 2010. Smith bought a new stake in the first quarter, then the position saw a huge increase of 117.71% in the second quarter and saw another increase of 49.73% in the third quarter.

Aspen Insurance Holdings has a market cap of $3.05 billion. The company conducts insurance and reinsurance business through its wholly owned subsidiaries in three major jurisdictions: Aspen U.K. and AUL, Aspen Bermuda (Bermuda) and Aspen Specialty and AAIC (United States). The company is organized into two business segments namely reinsurance and insurance.

The rating of Aspen’s profitability is 6/10, and ROE is underperforming the Global Insurance - Reinsurance industry while ROA is overperforming.

Jeremy Grantham (Trades, Portfolio) was another investor who made Aspen Insurance a new buy while it saw a huge increase of 142.34% by Paul Tudor Jones (Trades, Portfolio). Other investors like Richard Pzena (Trades, Portfolio) and Jim Simons (Trades, Portfolio) increased their stakes by 11.53% and 44.98%.

Kinross Gold Corp. (KGC) was another increased stake for Smith. The position was established in Q3 2014 and later in Q4 2014 it saw a huge increase of 603.67%; since then Smith has been increasing his stake, and this quarter he increased his stake by 18.87%. The deal had an impact of 0.5% on his portfolio.

Kinross Gold has a market cap of $2.3 billion and is engaged in the mining and processing of gold with mines and projects in Brazil, Canada, Chile, Ghana, Mauritania, Russia and the United States. Its mining includes exploration and acquisition of gold-bearing properties, the extraction and processing of gold-containing ore and reclamation of gold mining properties.

The rating of Kinross’ profitability is 2/10 and is confirmed by negative returns that are deeply underperforming the Global Gold industry.

Other investors like Jim Simons (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio) increased their stakes by 21.24% and 17.04%.

Fly Leasing Ltd. (FLY) was another stake that saw a huge increase from Smith. He bought 21,100 shares of Fly Leasing in the second quarter; this quarter he increased his stake by 6015.81%. The deal had an impact of 0.43% on his portfolio.

Fly Leasing has a market cap of $560.4 million. It is an aircraft lessor. It acquires and leases modern, high-demand and fuel-efficient commercial jet aircraft under long-term contracts to a diverse group of airlines throughout the world.

The rating of Fly Leasing’s profitability is 7/10, but its returns are underperforming the Global Rental & Leasing Services industry.

Fly Leasing was only traded by two investors, Donald Smith (Trades, Portfolio), who increased his stake, and Mario Gabelli (Trades, Portfolio), who sold out his stake.

The investment team also increased its stake in Granite Real Estate Inc. (GRP.U). In the last six quarters Smith had been decreasing his stake, but this quarter he increased his stake by 16.28%. The deal had an impact of 0.37% on his portfolio.

Granite Real Estate is engaged in the acquisition, development, selective construction, leasing, management and ownership of a predominantly industrial global rental portfolio of properties in North America and Europe leased to operating subsidiaries of Magna International Inc.

Jeremy Grantham (Trades, Portfolio) made Granite Real Estate a new buy while the stake saw a huge increase of 275.25% by Jim Simons (Trades, Portfolio).

Smith also increased his stake in Unum Group. (UNM). The stock has had a long-term position in his portfolio since 2010, and Smith has been increasing and reducing his stake. This quarter he increased his stake by 6.74%, and the deal had an impact of 0.35% on his portfolio.

Unum Group has a market cap of $8.8 billion. The company is a general business corporation, and its insurance and noninsurance subsidiaries, which collectively with the company, operate in the United States, the United Kingdom and, to a limited extent, in certain other countries.

The rating of Unum Group’s profitability is 6/10, but by contrast its returns are underperforming the Global Insurance - Life industry.

Joel Greenblatt (Trades, Portfolio) and Ray Dalio (Trades, Portfolio) had Unum Group as their new buys while Pioneer Investments (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Jeff Auxier (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) increased their stakes.

Loews Corp. (L) was another increased stake for Smith. The stock has had a long-term position in Smith’s portfolio since 2010; in the last seven quarters the investor had been increasing his stake. This quarter he increased his stake by 17.53%, and the deal had an impact of 0.29% on his portfolio.

Loews has a market cap of $13.29 billion. The company is engaged in commercial property and casualty insurance.

The rating of Loews' profitability is 7/10; its returns are underperforming the Global Insurance - Property & Casualty industry.

The position saw a huge increase of 18828.92% by Diamond Hill Capital (Trades, Portfolio). Other investors like T Rowe Price Equity Income Fund (Trades, Portfolio), James Barrow (Trades, Portfolio), Charles Brandes (Trades, Portfolio) and Louis Moore Bacon (Trades, Portfolio) as well increased their stakes.