Donald Smith & Co. released in a regulatory portfolio update its fourth-quarter portfolio, revealing that its top trades included boosts to its holdings of Textainer Group Holdings Ltd. (TGH, Financial), Kinross Gold Corp. (KGC, Financial) and Enact Holdings Inc. (ACT, Financial) as well as reductions to its positions in American National Group Inc. (ANAT, Financial) and Alcoa Corp. (AA, Financial).
The New York-based firm applies a deep-value investing approach, focusing on stocks with good earnings potential and valuations in the bottom 10% of the industry in terms of price-to-tangible book ratios.
As of December 2021, the firm’s $2.83 billion equity portfolio contains 66 stocks with a quarterly turnover ratio of 5%. The top three sectors in terms of weight are financial services, industrials and basic materials, representing 25.22%, 25.16% and 21.72% of the equity portfolio.
Textainer Group Holdings
The firm purchased 1,271,490 shares of Textainer Group Holdings (TGH, Financial), expanding the position by 1,017.19% and its equity portfolio by 1.61%.
Shares of Textainer averaged $36.19 during the fourth quarter; the stock is significantly overvalued based on Tuesday’s price-to-GF Value ratio of 2.82.
GuruFocus ranks the container leasing company’s profitability 7 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8 and profit margins and returns that outperform more than 77% of global competitors.
Other gurus with holdings in Textainer include Jeff Auxier (Trades, Portfolio)’s Auxier Asset Management and AzValor Managers FI.
Kinross Gold
The firm added 2,513,418 shares of Kinross Gold (KGS), increasing the position by 26.14% and its equity portfolio by 0.52%.
Shares of Kinross Gold averaged $5.99 during the fourth quarter; the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 1.01.
GuruFocus ranks the Toronto-based gold company’s financial strength 5 out of 10 on the back of a low Altman Z-score of 1 and interest coverage ratios underperforming more than 70% of global competitors despite the company having a high Piotroski F-score of 7.
Enact Holdings
The firm invested in 660,687 shares of Enact Holdings (ACT, Financial), expanding the position by 582.94% and its equity portfolio by 0.49%. Shares averaged $21.61 during the fourth quarter.
GuruFocus ranks the Raleigh, North Carolina-based private mortgage insurance company’s financial strength 5 out of 10 on the back of interest coverage and debt ratios underperforming more than 56% of global competitors.
American National Group
The firm sold 208,373 shares of American National Group (ANAT, Financial), slicing 72.27% of the position and 1.5% of its equity portfolio.
Shares of American National Group averaged $189.24 during the fourth quarter; the stock is significantly overvalued based on Tuesday’s price-to-GF Value ratio of 1.35.
GuruFocus ranks the Galveston, Texas-based insurance company’s financial strength 4 out of 10 on the back of cash-to-debt and debt-to-equity ratios that underperform more than 52% of global competitors.
Alcoa
The firm sold 508,252 shares of Alcoa (AA, Financial), trimming 34.47% of the position and 0.95% of its equity portfolio.
Shares of Alcoa averaged $50.25 during the fourth quarter; the stock is significantly overvalued based on Tuesday’s price-to-GF Value ratio of 3.04.
GuruFocus ranks the Pittsburgh-based aluminum company’s financial strength 5 out of 10 on the back of debt ratios underperforming more than 66% of global competitors despite the company having a high Piotroski F-score of 8.
