The Third Avenue Value Fund (Trades, Portfolio), which was launched in 1990 under the late Marty Whitman, disclosed this week that its top four trades for the third quarter included a position boost in Comerica Inc. (CMA, Financial) and sells in three companies: Lennar Corp. (LEN.B, Financial), Interfor Corp. (TSX:IFP, Financial) and Warrior Met Coal Inc. (HCC, Financial).
The fund seeks long-term capital appreciation through a global, all-cap approach that emphasizes a company's financial strength and the ability to compound value. Fund manager Matthew Fine said in his June-quarter letter that management analyzes businesses as if the fund intends to own the entire business for the long term. For the three-month period, Third Avenue Value returned 25.3%, outperforming the MSCI World Index benchmark return of 19.57%.
As of the quarter-end, the fund's $360 million equity portfolio contains 29 stocks, with three new positions and a turnover ratio of 12%. The top three sectors in terms of weight are in basic materials, financial services and industrials, representing 33.61%, 16.85% and 16.52% of the equity portfolio.
Comerica
The fund added 109,211 shares of Comerica, increasing the position 59.91% and its equity portfolio 1.08%. Shares averaged $36.58 during the third quarter.
According to GuruFocus, the Dallas-based bank's cash-to-debt ratio of 1.83 outperforms 57.37% of global banks despite equity-to-asset and debt-to-equity ratios underperforming over 53% of global competitors.
Other gurus with holdings in Comerica include Pioneer Investments (Trades, Portfolio) and Jim Simons (Trades, Portfolio)' Renaissance Technologies.
Lennar
The fund sold 146,536 Class B shares of Lennar, trimming the position 43.41% and its equity portfolio 1.55%. Shares averaged $46.16 during the third quarter.
GuruFocus ranks the Miami-based homebuilder's profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 9 and an operating margin that is outperforming over 94.26% of global competitors despite declining approximately 2.7% per year on average over the past five years.
Mario Gabelli (Trades, Portfolio)'s GAMCO Investors Inc. (GBL, Financial) also has a holding in Lennar.
Interfor
The fund sold 891,531 shares of Interfor, trimming the position 25.35% and its equity portfolio 1.46%. Shares averaged 11.24 Canadian dollars ($8.44) during the third quarter.
The Vancouver-based company produces and sells lumber, timber and other wood products. GuruFocus ranks the company's financial strength 6 out of 10: Even though debt ratios are underperforming more than half of global competitors, Interfor's equity-to-asset ratio of 0.57 outperforms 63.76% of global forest product companies.
Warrior Met Coal
The fund sold 187,260 shares of Warrior Met Coal, trimming the position 12.48% and its equity portfolio 0.65%. Shares averaged $15.03 during the third quarter.
The Brookwood, Alabama-based company produces met coal at several underground mines in the state. GuruFocus ranks the company's financial strength 6 out of 10 on the heels of equity-to-asset and debt-to-Ebitda ratios outperforming over 66% of global competitors.
Disclosure: No positions.
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