Third Avenue Management

Third Avenue Management

Last Update: 2014-07-10
Related: Martin Whitman

Number of Stocks: 157
Number of New Stocks: 11

Total Value: $5,163 Mil
Q/Q Turnover: 7%

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

Third Avenue Management' s Profile & Performance

Profile

Founded by legendary value investor Martin Whitman, Third Avenue Management manages mutual funds, separate accounts and hedge funds. The mutual funds include, Third Avenue Value Fund, managed by Martin Whitman, Third Avenue Small-Cap Value Fund, managed by Curtis Jensen, Third Avenue Real Estate Value Fund, managed by Michael Winer, and Third Avenue International Value Fund, managed by Amit Wadhwaney. All of these funds have achieved outstanding performances compared with peers.


We also have Martin Whitman in our List of Gurus. There are overlaps between the portfolio of Third Avenue Management and Martin Whitman's portfolio (Third Avenue Value Fund)

Web Page:http://thirdavenuefunds.com/taf/index.html

Investing Philosophy

Third Avenue Management, led by its founder and chairman, Martin Whitman, are balance sheet value investors. They think that the current balance sheet, rather than its projected future revenues and earnings, is the best measure of a company's value. They seek to invest in safe companies that are cheaply priced.

Total Holding History

Performance of Third Avenue Value Fund

YearReturn (%)S&P500 (%)Excess Gain (%)
201318.8431.55-12.7
201227.4815.412.1
2011-20.862.08-22.9
3-Year Cumulative19.9 (6.2%/year)55 (15.7%/year)-35.1 (-9.5%/year)
201013.8715.06-1.2
200944.5126.4618.0
5-Year Cumulative97.3 (14.6%/year)125.5 (17.7%/year)-28.2 (-3.1%/year)
2008-45.61-37-8.6
20075.765.610.2
200614.6915.79-1.1
200516.494.9111.6
200426.621214.6
10-Year Cumulative92 (6.7%/year)104.1 (7.4%/year)-12.1 (-0.7%/year)
200310.4628.7-18.2
20027.13-22.129.2
200110.82-11.922.7
20000.91-9.110.0
199910.0621-10.9
15-Year Cumulative179.6 (7.1%/year)98.3 (4.7%/year)81.3 (2.4%/year)
199816.7228.6-11.9
1997-5.0333.4-38.4
199611.0223-12.0
19952.3637.6-35.2
1994-3.221.3-4.5
20-Year Cumulative240.9 (6.3%/year)483.2 (9.2%/year)-242.3 (-2.9%/year)
19931.3610.1-8.7
199210.887.63.3
1991-0.2630.5-30.8

Top Ranked Articles

New Guru Added: Third Avenue Management
GuruFocus is pleased to announce that we have added Third Avenue Management into our List of Gurus. Third Avenue Management was founded by legendary investor Martin Whitman. Read more...
Viterra: Case Study for Safe and Cheap Investing
Recently, Morningstar interviewed Amit Wadhwaney at Third Avenue Management (TAM) and Wadhwaney discussed one of his Canadian holding - Viterra. This interview piqued my interest in Viterra, and I spent some time digging through the annual reports of Viterra and Wadhwaney’s letters to shareholders to understand his investment thesis. Upon investigation, I found that Viterra fits TAM’s “safe and cheap” investing framework perfectly. In this case study (it is much longer than most articles on this website, but it is a case-study), I want to use TAM’s investment in Viterra to show how safe and cheap investing works and highlight how it differs from other value investing methodologies. Read more...
Third Avenue Management Buys Lowes, Teleflex, American Eagle Outfitters, Tellabs, Sells Pharmaceutical Product Development, Nabors Industries
Managing mutual funds, separate accounts, and hedge funds, Third Avenue Management was founded by the legendary value investor Martin Whitman. As such, it employs a similar investing philosophy as its chairman, using the current balance sheet to determine a company's value rather than future projections of revenue and earnings. The fund targets underpriced companies that have capable management and strong finances. As of 09/30/2011, Third Avenue Management owns 116 stocks with a total value of $4 billion. These are the details of the buys and sells. Read more...
Third Avenue Says Weyerhaeuser Good Play on Long-Term Turn in Housing
Third Avenue Management is a value investing firm with over $16 billion under management. David Barse, its president and CEO, told CNBC recently that with so many investors distracted by social media IPOs and potential future earners, his firm is more easily finding attractive value stocks with great earnings now. Read more...
Third Avenue Management Buys MGIC Investment Corp., Haynes International Inc., Imation Corp., Sells Canadian Natural Resources Ltd., Whiting Petroleum Corp., EnCana Corp.
Third Avenue Management, led by its founder and chairman Martin Whitman, seeks safe and cheap investments. Whitman bets heavily with mortgage insuruers like Radian and MGIC. He is convinced and he has been buying more of those. These are their buys and sells during the fourth quarter. Read more...
» More Third Avenue Management Articles

Commentaries and Stories

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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. More...

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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 More...

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Third Avenue Management Comments on Posco
Posco (PKX) recently experienced a change in management. The new CEO, Oh-joon Kwon, started in March 2014. He had previously been the Chief Technical Officer. His stated mission is to reform the company and, to that end, four out of five board members have been replaced and three new outside directors added. His focus is on enhancing the existing business via organic growth and reducing leverage, whereas the prior CEO's focus was more about empire building. Despite the weakness in the steel business due to macroeconomic challenges, posco has a substantial non-steel business. For example, via its stake in Daewoo international, posco participates in the profits of Daewoo's Myanmar gas field which is just starting to ramp up . The field began production in June 2013 and was producing only 20% of potential production capacity in the fourth quarter of 2013. posco expects the project to provide 150 billion KrW in pre-tax income in 2014, growing to KrW300 billion in 2015. posco also has potential growth opportunities from its Engineering and Construction business and opportunities to divest non- core assets. recent media reports suggest the company seeks to raise 2 trillion won by selling More...

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Third Avenue Management Comments on Toyota
Perhaps because it has "Toyota" (TM) in its name or perhaps because it spun out Toyota Motor years ago, many people view Toyota industries as largely an automotive parts type company. it is, but also derives around 50% of operating income from its material handling equipment business, where it is the global market share leader. The company also has a logistics segment and a textiles machinery business. The company is profitable and growing and, furthermore, has an attractive investment securities portfolio, the value of which exceeds Toyota industries' current market value. The businesses are separable but not likely saleable (perhaps if it were not a Japanese company). Changes in corporate governance are afoot in Japan. The government is working on new corporate governance rules requiring independent directors, or in the absence of that, an explanation of deviations. Further, Japan is working on a Stewardship Code to encourage institutional investors to disclose their proxy votes and engage in dialogue with companies on issues that could impact long-term share value. a new stock index, the JpX- Nikkei 400, highlights this new focus. To be included in the index, companies must meet More...

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Third Avenue Management Comments on Symantec
Symantec (SYMC) operates in security software and iT storage management businesses with its well-known brands, such as Norton. recently, it has experienced management turnover, with its second CEO terminated by the Board in as many years. The surprise announcement was due to what appears to be slower than expected execution of a previously announced new strategy. The company had already started to embark on its new strategy to improve growth capabilities, including restructuring the sales force and eliminating duplicative organizational and operating structures. While not central to our original investment thesis, we have long thought that the company's businesses seem separable and saleable. Strategic firms could be potentially interested in its various businesses, though it could also be interesting to private equity firms given the strong cash flow characteristics of the business. More...

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Third Avenue Management Comments on BNY Mellon
BNY Mellon (BK)("BK") participates in two businesses –asset management and investment servicing. The company had $1.6 trillion in assets under management and $27.9 trillion of asset under custody and/or administration, as of March 31, 2014. The businesses seem separable and more valuable on a sum-of-the-parts basis. The asset management business with its iconic Dreyfus Funds and stable of boutique managers could certainly be a stand- alone entity or would seem to attract interest from strategic or financial buyers. BK has been in the news recently given more shareholder scrutiny of its operating efficiency. recently, there have been news reports that BK could be looking to sell its Corporate Trust unit, which has been a detractor due to the run-off of high-margin securitizations. More...

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Third Avenue Management Comments on Cavco Industries
The Fund's largest position is the common stock of Cavco industries inc. (CVCO), which represented 5.6% of the Fund's net assets as of quarter end. Since Cavco is not a household name, we thought it would be helpful to discuss the history of the investment and why we are so excited about its future. The Cavco investment originated during the 2008 financial crisis. Fleetwood Enterprises, a leading producer of manufactured homes and recreational vehicles ("rVs") had filed for bankruptcy, and its announcement of the sale of its rV business in a bankruptcy auction indicated that the manufactured housing business could be available on similar terms. Fund Management had long followed the manufactured housing industry and knew that Fleetwood had a strong brand name and reputation as a quality manufacturer. Fund Management contacted Joe Stegmayer, the Chairman and CEO of Cavco, to discuss the situation and learned that Cavco was also interested in the Fleetwood manufactured housing business. Fund Management had known Joe Stegmayer for many years, dating back to when he was president of industry leader Clayton Homes, and had tremendous respect for his managerial capabilities. Cavco was a More...

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Third Avenue Management Comments on Vodafone
Additional shares of Vodafone (VOD) Common were purchased following the completion of the company's sale of its 45% stake in Verizon Wireless to Verizon. This transaction resulted in a significant distribution to shareholders consisting mostly of Verizon common stock and also of cash. Fund Management elected to sell the Verizon shares owing to concerns about slowing growth and increasing completion in the US along with the company's leveraged balance sheet. Vodafone has a very strong financial position and is well positioned to benefit from consolidation in the European telecommunication market and growth in emerging markets. Vodafone Common accounted for 2.5% of the Fund's net assets at quarter end. More...

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Third Avenue Management Comments on Posco
The position in posco (PKX) common was increased slightly at about a 50% discount to book value. Despite excess capacity and pricing pressure in the global steel industry, particularly in China, posco's steel business continues to perform relatively well as evidenced by its 7% operating margin in both 2013 and the first quarter of 2014. The company continues to have a strong financial position, and its recent investments in non-steel businesses should start to contribute more meaningfully over the next couple of years, particularly in energy (more on this later in this letter). posco common accounted for 5.4% of the Fund's net assets at quarter end. More...

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Third Avenue Management Comments on AGCO Corp
Fund Management initiated a position in the common stock of AGCO Corp. (AGCO) ("AGCO") during the quarter. AGCO is a pure-play agricultural company dedicated to farm machinery, grain storage solutions and protein production equipment. it is a global company with sales generated across the following geographies: 23% U.S., 53% Europe, 23% latin america and 1% asia pacific. it maintains an investment grade balance sheet, is highly cash generative, and has been consistently profitable. Despite these appealing characteristics, the current valuation is depressed due to short-term concerns. More...

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Marty Whitman's Q2 2014 Third Avenue Letter - High Frequency Trading
Dear Fellow Shareholders: High Frequency Trading ("HFT") has been on the front pages of the financial press ever since the publication earlier this year of Michael lewis' book, Flash Boys. The book demonstrates once again how difficult it is to prosper as an investor in markets where longer-term fundamental analysis of companies and securities are ignored. The ways most market participants who lack specific knowledge about individual companies and the securities they issue can prosper seems to encompass at least one of the three factors: More...

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5-Year Lows: American Eagle Outfitters, Intrexon Corp, Mack-Cali Realty Corp, and Weight Watchers International Inc
According to GuruFocus list of 5-year lows, these Guru stocks have reached their 5-year lows: American Eagle Outfitters, Intrexon Corp, Mack-Cali Realty Corp, and Weight Watchers International Inc More...

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Third Avenue Management - The Tapering Rate of Interest in Tapering
Overview More...

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Martin Whitman’s Third Avenue Management First Quarter Stock Buys Martin Whitman,Third Avenue Management - Martin Whitman’s Third Avenue Management First Quarter Stock Buys
Martin Whitman (Trades, Portfolio)’s Third Avenue Management (Trades, Portfolio) team mostly seeks companies trading at discounts to their net asset values (NAV) between 25% and 75%, which are well financed and have excellent growth records. Companies of the Dow Jones Industrial Average (DJIA), Whitman notes in his first quarter 2014 letter released today, cost $2.76 for each $1.00 of corporate net assets. His funds’ portfolio companies, by contrast, cost $0.25 to $0.75 for each $1.00 of corporate assets. “This discrepancy makes no economic sense except that the discounts have always existed for the More...

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Guru Stocks at 52-Week Lows: CHL, T, CAJ, CVE, KYO
According to GuruFocus list of 52-week lows, these Guru stocks have reached their 52-week lows. More...

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Weekly 3-Year Low Highlights: STRA, IMI, HXM, SPHS
According to GuruFocus list of three-year lows: Strayer Education Inc., Intermolecular Inc., Desarrolladora Homex and Sophiris Bio Inc. have all reached their three-year lows. More...

WEEKLY, 3, YEAR, LOW ,HIGHLIGHT


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Martin Whitman's Third Avenue Management - New Buys and Adds Martin Whitman,Third Avenue Management - Martin Whitman's Third Avenue Management - New Buys And Adds
In his annual letter to shareholders, Martin Whitman of Third Avenue Funds railed against Modern Capital Theory (efficient market theory), arguing instead that it is possible to outperform markets by bottom-up analysis of businesses and the securities they issue. He also listed four characteristics that define a Third Avenue Funds portfolio holding: More...

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Third Avenue Management Comments on SemGroup
In early August SemGroup (SEMG), an owner and operator of oil and gas midstream assets, including pipelines and storage and blending facilities, closed on an opportunistic purchase of assets from Chesapeake Energy. The assets nicely complement SemGroup's existing core assets that stretch from Colorado to Oklahoma. While SemGroup will have to spend money to complete the assets—money that financially distressed Chesapeake likely could not justify—we view the expenditures favorably given their high return characteristics.From Third Avenue Management's fourth quarter 2013 commentary. More...

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Third Avenue Management Comments on Dundee Corporation
During the quarter the Fund established a meaningful position in shares of Dundee Corporation (TSX:DC.A), a Toronto-based holding company run by founder Ned Goodman. Having cut his teeth in investing at Brookfield Asset Management's predecessor company in the 1960s and Beutel Goodman which he co-founded in 1967, Goodman would go on to found Dundee in 1991. Goodman has been a magnificent allocator of capital at Dundee, building businesses and 11 investing in public and private companies. The uncertain macro backdrop post-Financial Crisis has given Goodman a penchant for hard assets rather than paper assets, resulting in a unique collection of investments, ranging from financial services and real estate to metals, mining, energy and agriculture businesses, including control of the largest organic beef operator in North America with more than 12,000 head of cattle. While past performance is no guarantee of future results, Dundee has generated an impressive 18% annualized return for its shareholders over the past twenty years.To understand Dundee requires a look past its income statement, where historical reported results are volatile and muddied by consolidated financials of entities no longer owned or consolidated, as well as gains on the sale of underlying securities and businesses, including the 2011 sale of a controlling stake in Dundee Wealth to Bank of Nova Scotia for C$1.4 billion and the spinout of a majority interest in Dundee Real Estate Company earlier this year. Today, Dundee's enterprise value is close to the value of its public securities holdings, net of a modest amount of debt. "Free" are the company's private investment portfolio and private subsidiaries, carried at book value, which together are close to half of Dundee's market value. While there is certainly an element of "key man risk," as any eventual successor will have enormous shoes to fill, we think hard asset values, values of publicly traded securities and a significant discount to our estimate of net asset value provide a meaningful margin of safety for the investment.We have followed Ned Goodman and Dundee for a number of years, as a like-minded operator and investor with significant ownership aligning his interests with those of his shareholders. The position reflects a true collaboration with our investment team colleagues. Vic Cunningham provided much of the recent legwork, while Ryan Dobratz offered key insights into the real estate assets and their valuations.Legg Mason is a premier mutual fund complex that dates back to the 1980s. While the firm has recently suffered significant asset outflows in the wake of subpar investment returns, the company has retained a strong franchise (with several well-known brands under its umbrella), a diversified asset mix, and a sound balance sheet. Under new leadership, the business appears to be on the mend and capital allocation continues to be favorable—management has repurchased $1.2 billion of shares in the past three years (shrinking the share count by more than 20%) and has been increasing the dividend. Moreover, the relative investment performance among its stable of investment managers is beginning to improve. While the company is still under-earning its potential in our view, its cash flows remain strong, aided by a large deferred tax asset resulting from net operating losses generated in prior periods. Fund management initiated its position in Legg Mason Common at an implied free cash flow yield of about nine percent, and we believe the company's cash flows could increase markedly in the near future if performance and asset flows continue to improve.From Dundee Corporation's fourth quarter 2013 commentary. More...

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Third Avenue Management Comments on Tellabs
Unfortunately, though, there is a "dark side" to resource conversion activities—the dreaded "take-under", where a company is acquired for less than its value. While managements and investment bankers will often use a premium to market price to justify a transaction value, we look instead at the offer price versus intrinsic value. Tellabs' (TLAB) announcement in October to sell itself to Marlin Equity Partners, a private equity firm, is a take-under, in our opinion. Under the terms of the transaction, Tellabs agreed to a cash tender offer of $2.45 per share, which excluding the $551 million of cash on Tellabs' balance sheet, was only 0.37x revenues and attributed no value to the company's intellectual property and real estate. Third Avenue filed a Form 13D in November 2012,where we sought to reserve the right to meet with management, the Board and other shareholders in order to enhance shareholder value. Over that time, we were successful in nominating two members to the Board, and the company paid a special dividend and took steps to reduce costs. While the purchase price is disappointing, it still represents a 17% premium to the price of the stock when we filed our 13D (adjusted for dividends received), highlighting the importance of buying at a discount to NAV to provide a margin of safety. However, we acknowledge a less than optimal result over the life of this investment. The telecom equipment industry in which Tellabs participates is fraught with issues—from competition, technology leapfrogging and the need for high R&D investments, to a highly concentrated customer base and resultant pricing pressure. Despite its super-strong balance sheet, its operating and acquisitions track record was checkered.From Third Avenue Management's fourth quarter 2013 commentary. More...

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