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Tiziano Frateschi
Tiziano Frateschi
Articles (913)  | Author's Website |

Third Avenue Buys Ralph Lauren, Boosts Baxalta

Value Fund also acquires stake in Harman International

April 12, 2016 | About:

Martin Whitman (Trades, Portfolio) is founder and former portfolio manager of the Third Avenue Value Fund. Chip Rewey now manages the fund after Whitman stepped down from active management duties. During the first quarter of the year, the fund bought many stocks and the following are the most heavily weighted.

Third Avenue acquired 229,973 shares in Harman International Industries Inc. (HAR) with an impact of 1.45% on the portfolio.

The company is engaged in the design and engineering of connected products and solutions for automakers, consumers and enterprises, including audio systems, visual products, enterprise automation solutions and connected services. During the second quarter, net sales grew 12% to $1.8 billion, up 19% and operational EBITDA increased by 14%. The company reported 3% growth for operational EPS.

GuruFocus gives the stock a profitability and growth rating of 7 out of 10 with ROE of 15.21% and ROA of 6.49% that are outperforming 73% of the companies in the Global Consumer Electronics industry. Financial strength has a rating of 6 out of 10, with cash to debt of 0.42 that is below industry median of 1.44.

The largest shareholder among the gurus is John Rogers (Trades, Portfolio) with 1.02% of outstanding shares, followed by Steven Cohen (Trades, Portfolio) with 0.64%, Robert Olstein (Trades, Portfolio) with 0.22%, Mario Gabelli (Trades, Portfolio) with 0.12% and Jim Simons (Trades, Portfolio) with 0.05%.

The fund bought 114,465 shares in Ralph Lauren Corp. (RL) with an impact of 1.09% on the portfolio.

The company is engaged in the design, marketing and distribution of premium lifestyle products, including men's, women's and children's apparel, accessories, fragrances and home furnishings. It operates in three segments: Wholesale, Retail and Licensing. During the last quarter, the company reported better-than-expected operating margin of 13.7%. Its earnings per diluted share increased 4% from the prior year period, excluding foreign currency impacts and restructuring and other charges.

GuruFocus gives the stock a profitability and growth rating of 8 out of 10 with ROE of 12.35% and ROA of 7.65% that are outperforming 65% of the companies in the Global Apparel Manufacturing industry. Financial strength has a rating of 6 out of 10, with cash to debt of 1.35 that is slightly above the industry median of 1.32.

Steven Cohen (Trades, Portfolio) is the largest shareholder of the company among the gurus with 1% of outstanding shares, followed by Jim Simons (Trades, Portfolio) with 0.17%, Ron Baron (Trades, Portfolio) with 0.13%, Jeremy Grantham (Trades, Portfolio) with 0.09%, Robert Olstein (Trades, Portfolio) with 0.05% and Chuck Royce (Trades, Portfolio) with 0.04%.

Third Avenue increased its stake in Anixter International Inc. (AXE) by 11.80% with an impact of 0.24% on the portfolio.

The company is engaged in the distribution of communications and electrical wire and cable products and fasteners and other small parts (C class inventory components). Fourth quarter adjusted net income of $29.3 million was down from $36.7 million in the prior year quarter. Adjusted earnings per diluted share of 88 cents was down from $1.10 in the prior year quarter.

GuruFocus gives the stock a profitability and growth rating of 5 out of 10 with ROE of 10.96% and ROA of 3.48% that are outperforming 60% of the companies in the Global Industrial Distribution industry. Financial strength has a rating of 5 out of 10, with cash to debt of 0.09 that is below industry median of 0.80.

The largest shareholder among the gurus is John Rogers (Trades, Portfolio) with 10.08% of outstanding shares, followed by Chuck Royce (Trades, Portfolio) with 4.96%, Third Avenue Management (Trades, Portfolio) with 2.54%, Ken Fisher (Trades, Portfolio) with 2.13%, Diamond Hill Capital (Trades, Portfolio) with 1.65%, Joel Greenblatt (Trades, Portfolio) with 1.1% and Jim Simons (Trades, Portfolio) with 0.31%.

The fund raised its stake in Devon Energy Corp. (DVN) by 7.41% with an impact of 0.13% on the portfolio.

It is an independent energy company engaged in the exploration, development and production of oil, natural gas and NGLs.

GuruFocus gives the stock a profitability and growth rating of 7 out of 10 with ROE of -98.41% and ROA of -36.05% that are underperforming 84% of the companies in the industry. Financial strength has a rating of 5 out of 10, with cash to debt of 0.18 that is below the industry median of 0.41.

First Eagle Investment (Trades, Portfolio) is the other largest shareholder of the company among the gurus with 2.17% of outstanding shares, followed by Tweedy Browne (Trades, Portfolio) with 0.86%, Tweedy Browne (Trades, Portfolio) Global Value with 0.29%, Third Avenue Management (Trades, Portfolio) with 0.25% and Richard Snow (Trades, Portfolio) with 0.25%.

The fund increased its stake in Brookdale Senior Living Inc. (BKD) by 5.16% with an impact of -0.1% on the portfolio.

The company is an operator of senior living communities in the U.S. with a total capacity of approximately 143 communities in 46 states and the ability to serve approximately 111,000 residents. During the fourth quarter, cash from facility operations had a 9.4% increase from the same quarter of 2014, and adjusted EBITDA had a 4.4% increase.

GuruFocus gives the stock a profitability and growth rating of 4 out of 10 with ROE of -17.05% and ROA of -4.43% that are underperforming 93% of the companies in the Global Long-Term Care Facilities industry. Financial strength has a rating of 5 out of 10, with cash to debt of 0.01 that is below industry median of 0.36.

The largest shareholder among the gurus is Larry Robbins (Trades, Portfolio) with 9.81% of outstanding shares, followed by Third Avenue Management (Trades, Portfolio) with 1.68%, Ron Baron (Trades, Portfolio) with 1.02%, Jim Simons (Trades, Portfolio) with 0.64% and Steven Cohen (Trades, Portfolio) with 0.14%.

The investor raised its stake in Baxalta Inc. (BXLT) by 5.16% with an impact of 0.12% on the portfolio.

The company is a global biopharmaceutical leader developing, manufacturing and commercializing therapies for orphan diseases and underserved conditions in hematology, oncology and immunology. Its fourth quarter results reflect successful transition to a standalone company with compelling commercial, regulatory, clinical, operational and financial execution. The company’s worldwide revenues on a GAAP basis of $1.8 billion grew 5% from the prior-year period. The separation from Baxter International Inc. (BAX) allowed Baxalta to advance its leadership position and continue innovation on transformative therapies in hematology, immunology and oncology.

GuruFocus gives the stock a profitability and growth rating of 6 out of 10 with ROE of 20.13% and ROA of 8.75% that are outperforming 88% of the companies in the Global Biotechnology industry. Financial strength has a rating of 7 out of 10 with cash to debt of 0.19.

First Eagle Investment (Trades, Portfolio) is the other notable shareholder of the company among the gurus with 0.54% of outstanding shares, followed by Richard Pzena (Trades, Portfolio) with 0.53%, Diamond Hill Capital (Trades, Portfolio) with 0.48%, Tweedy Browne (Trades, Portfolio) with 0.37%, Pioneer Investments (Trades, Portfolio) with 0.32%, Mairs and Power (Trades, Portfolio) with 0.27% and Tweedy Browne (Trades, Portfolio) Global Value with 0.16%.

About the author:

Tiziano Frateschi
You can read about me on this blog: www.theextraincome.info

It gives suggestions on position trading.

Visit Tiziano Frateschi's Website


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GuruFocus has detected 5 Warning Signs with Brookdale Senior Living Inc $BKD.
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