Third Avenue Management

Third Avenue Management

Last Update: 2014-02-18
Related: Martin Whitman

Number of Stocks: 170
Number of New Stocks: 22

Total Value: $5,456 Mil
Q/Q Turnover: 8%

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 - 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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Rating: 4.0/5 (1 vote)

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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Rating: 3.5/5 (2 votes)

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


  • Currently 3.80/5

Rating: 3.8/5 (5 votes)

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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Third Avenue Management Comments on Apache
In August, Apache (APA) announced that it agreed to sell a 33% stake in its Egyptian oil and gas business to Sinopec (SHI) for $3.1 billion. This price equated to $34 per barrel of proved reserves, or a significant premium to the valuation of Apache common of about $15 per barrel prior to the announcement of the transaction. Given the recent political turmoil in Egypt, we were pleasantly surprised at the higher More...

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Third Avenue Management Comments on Applied Materials and Tokyo Electron
In September, Applied Materials (AMAT) announced plans to merge with Tokyo Electron ("TEL") (TSE:2760). Both Applied Materials and TEL are well respected in the semiconductor equipment industry. We initially invested in Applied during a cyclical downturn in the industry, yet with the belief that growth prospects were bright over the longer term due to continuing technology transitions as semiconductor chips get smaller and more complex and the potential for Applied Materials, specifically, to gain further market share. The transaction is structured such that Applied Materials shareholders will own 68% of the new company with TEL shareholders getting the remainder. The benefits of the merger for Applied shareholders include expanded market opportunities (particularly in processes such as etch and selective materials removal) and more efficient research and development. The companies estimate potential synergies totaling $250 million at end of the first year and $500 million by the end of the third year, driven from enhanced efficiencies in the supply chain, manufacturing, IT and corporate overhead. While we are optimistic about consolidation in the industry longer term, Applied's stock price increased on news of the transaction to a level where the valuation was not as attractive as other opportunities and we exited the position, locking in our 25% internal rate of return on our investment.From Third Avenue Management's fourth quarter 2013 commentary. More...

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Third Avenue Management Comments on Vodafone
Fund Management initiated a position in Vodafone (VOD) Common during the quarter. Vodafone is a leading provider of telecommunications services based in the United Kingdom. This investment is discussed in more detail in this quarter's Third Avenue International Value Fund shareholder letter. The Vodafone common investment made by the Fund was prompted by the company's sale of its 45% stake in Verizon Wireless at a tremendous price (9.4 times EBITDA). Shares of Vodafone Common were purchased at less than five times pro-forma EBITDA and at a mid-single digit dividend yield in the Fund. Although conditions in the European telecommunications industry are difficult, Vodafone's business is very cash generative and the proceeds from the Verizon Wireless transaction will enable the company to reinvest more in its networks than many of its competitors while maintaining a very strong financial position and a healthy dividend. Vodafone also has substantial exposure to emerging markets, such as India and Africa, that are experiencing tremendous growth in demand for smart phones and data. More...

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Martin Whitman Comments on Twitter
Twitter (TWTR) went public November 7, 2013 at $26 per share. On the first day of trading, Twitter Common closed at $45.90.There are obvious benefits to being an early IPO investor, assuming you can get a position size large enough to make a difference to a portfolio's over all return. Even these investors, however, achieved returns orders of magnitude lower than those obtained by Twitter's early investors and its most senior employees. The prospectus discloses, inter alia that 42,708,824 options on common shares, exercisable at an average price of $1.84 per share, were outstanding on June 30, 2013. On occasion, Third Avenue's funds can attempt to recreate this type of scenario by participating in a capital raise or refinancing (see the Third Avenue Real Estate Fund's investment in Trinity Place Holdings, discussed in that team's fourth quarter 2013 letter) but mostly we seek to create the possibility of achieving outsized returns by purchasing undervalued securities in the open market. More...

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Marty Whitman's Third Avenue Fourth Quarter Portfolio Manager Commentary
Dear Fellow Shareholders: Academics involved with finance restrict their studies to analyzing markets and securities prices. As far as they are concerned, the study of companies and the securities they issue are someone else's business. I am disappointed that a Nobel Prize was awarded to Eugene Fama, who studies only markets and prices; and whom, I daresay, does not focus on Form 10-Ks or the footnotes to a corporation's audited financial statements. In fact there is no way of determining whether any market is efficient or not in measuring underlying values unless the analyst understands, and analyzes, the specific securities that are the components of that specific market. More...

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Billionaires Hot for Coal on a 52-week Low Third Avenue Management - Billionaires Hot For Coal On A 52-week Low
Based on the first eight months of the year, U.S. coal production is down by 3% year over year, as reported by the U.S. Energy Information Administration. The U.S. coal industry sector currently has seven companies out of 22 on a 52-week low but only two Midwestern companies, Cloud Peak Energy Inc. (CLD) based in Wyoming, and Hallador Energy Co. (HNRG) based in Colorado, have billionaire guru stakeholders, as of the second quarter of 2013. More...

COAL


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Third Avenue Management’s High-Return Four
Third Avenue Management, considered a “balance sheet investor,” has a portfolio of 145 stocks, 18 of them new, and a total value of $5.09 billion, with a quarter-over-quarter turnover of 8%. The portfolio is currently weighted with top three sectors: financial services at 20.5%, basic materials at 15% and technology at 14.9%. The firm has averaged a return of 11.41% over 12 months. In 2012, Third Avenue Management returned 27.48% against the S&P500’s 15.4%. More...

REIT – RESIDENTIAL, BANKS – REGIONAL – US, LONG-TERM CARE FACILITIES, AEROSPACE & DEFENSE


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Rating: 3.0/5 (3 votes)

Weekly CEO Buys Highlight: UNF, BDGE, ASGN, EQU
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: More...

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Rating: 2.3/5 (3 votes)

Third Avenue Management Comments on Susser Petroleum Partners
Susser Petroleum Partners (SUSP): In September 2012, Susser spun off its Susser Petroleum Partners ("SPP") wholesale fuel business into a Master Limited Partnership (MLP) structure that provides fuel to Susser, as well as to third parties. While this structure creates a degree of "analytical noise" as it relates to the company's reported GAAP financials, it creates a more appropriately valued "currency" for SPP that it can use for growth and acquisitions while it effectively lowers Susser's cost of capital. Moreover, in addition to being the controlling general partner and majority limited partner of the MLP, Susser also holds a hidden asset of sorts in the form of Incentive Distribution Rights (IDRs) which effectively entitle Susser to an increasing portion of the MLP's distributions as it grows. While the distributions will likely be modest over the near term, SPP has attractive growth opportunities over the long-term through organic growth, acquisitions, and Susser stores being "dropped down" into the MLP via sale-leaseback transactions. The business model also provides a significant competitive advantage to Susser as it is able to take advantage of SPP's combined retail and wholesale More...

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Third Avenue Management Comments on Brookdale Senior Living
Brookdale Senior Living Brookdale (BKD) is the largest operator of senior housing assets in the United States, with approximately 549 centers and 48,000 units. Brookdale provides room, board and hospitality services to the elderly, primarily 80 years old and older, who are generally in good health but require a base level of healthcare, with a primary focus on private pay (80%).The Fund established its position in Brookdale at a price that represented a significant discount to our conservative estimate of NAV. Over the long term, demographics are favorable for senior housing. Brookdale's portfolio is currently leased at 88%, or 6% below pre-crisis peak. Pent-up demand is likely to drive occupancy and lead to outsized NAV growth as seniors often use proceeds from home sales to move-in and pay rent. Additionally, at 25,000 units, Brookdale's owned assets represent one of the largest and most coveted portfolios of high-quality private-pay senior housing properties and is likely to fetch significant interest from strategic and financial buyers. From Third Avenue Management's semi-annual 2013 letter. More...

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Rating: 2.5/5 (2 votes)

Third Avenue Management Comments on Hersha Hospitality
Hersha Hospitality Hersha (HT) is a U.S. REIT that owns 64 hotels containing 8,600 rooms. Hersha owns a young and high-quality portfolio of limited-service hotels in quality urban centers with high barriers to entry. Approximately 90% of the company's EBITDA is generated from six markets: New York City (46%), Philadelphia (12%), Washington DC (11%), Boston (10%), Los Angeles (6%), and Miami (5%). Limited service hotels typically have significantly higher margins and less volatile cash flows and, as we noted earlier this year, hotel operators have more flexibility to adjust room rates in response to economic conditions. Hersha has a reasonable financial position (mostly non-recourse debt) and is likely to compound NAV in the next couple of years, as the lodging recovery continues and its younger assets and development pipeline stabilize. Hersha Common is trading at a meaningful discount to NAV and we believe it is a likely take-over candidate, given its size and its unique portfolio. More...

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Rating: 3.0/5 (1 vote)

Third Avenue Management Comments on Tanger Factory Outlet Centers
Tanger Factory Outlet Centers Tanger (SKT) is a U.S.-based real estate investment trust that owns andoperates43retailoutletcentersintheU.S. and Canada. Tanger has a leading position in outlet centers alongside Simon Property Group's Chelsea subsidiary (together they control 80% of the outlet malls in the U.S.). The outlet business has been extremely strong over the past few years, as rental rates and occupancy trends have remained strong due to the value orientation offered by the distribution channel. Tanger's centers have averaged97%occupancyover the past five years and rental rates have grown over 15% annually. Tanger has led the retail sector in internal and external growth, due to their low occupancy cost ratios and high demand from tenants. To put it in perspective, most luxury retailers state that the outlet distribution channel is among their most profitable, and have expressed an interest to continue to expand this channel. Tanger has one of the strongest balance sheets in the retail sector (approximately 30% net debt-to-assets). It is run by a conservative and incentivized management team and has strong development growth prospects, as it continues to capitalize on the trend More...

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