Third Avenue Value Fund (Trades, Portfolio), founded by the late Marty Whitman, disclosed this week that its top five trades during the first quarter included new buys in Compania Sud America de Vapores SA (XSGO:VAPORES, Financial), Ultrapar Participacoes SA (BSP:UGPA3, Financial) and Taiheiyo Cement Corp. (TSE:5233, Financial). The fund also trimmed its holdings of Warrior Met Coal (HCC, Financial) and Bank of Ireland Group Inc. (LSE:BIRG, Financial).
Managed by Matthew Fine, the New York-based fund seeks long-term capital appreciation by investing in companies that have strong balance sheets and valuations that are supported by tangible assets and market prices below the fund’s estimate of intrinsic business value. Third Avenue focuses on global markets and all market cap categories.
As of April, the fund’s $606 million equity portfolio contains 33 stocks with a quarterly turnover ratio of 9%. The top three sectors in terms of weight are basic materials, industrials and financial services, representing 23.67%, 22.07% and 18.89% of the equity portfolio.
Investors should be aware portfolio updates for mutual funds do not necessarily provide a complete picture of a guru’s holdings. The data is sourced from the quarterly updates on the website of the fund(s) in question. This usually consists of long equity positions in U.S. and foreign stocks. All numbers are as of the quarter’s end only; it is possible the guru may have already made changes to the positions after the quarter ended. However, even this limited data can provide valuable information.
Compania Sud America de Vapores
The fund purchased 145,183,105 shares of Compania Sud America de Vapores (XSGO:VAPORES, Financial), giving the position 2.71% weight in its equity portfolio. Shares averaged 80.47 Chilean pesos (9 cents) during the first quarter.
The Santiago, Chile-based shipping company has a GF Score of 42 out of 100 based on a financial strength rank of 5 out of 10, a momentum rank of 3 out of 10 and a rank of 1 out of 10 for profitability and GF Value. Despite this, the GF Score may not give an accurate picture of the company's potential since it does not have a value for the growth rank.
Ultrapar Participacoes
The fund invested in 4,161,277 shares of Ultrapar Participacoes (BSP:UGPA3, Financial), giving the position 1.85% equity portfolio weight. Shares averaged 14.2 reals ($2.71) during the first quarter; the stock is significantly undervalued based on Friday’s price-to-GF Value ratio of 0.62.
The Sao Paulo, Brazil-based chemical energy company has a GF Score of 78 out of 100 based on a GF Value rank of 8 out of 10, a profitability rank of 7 out of 10, a growth rank of 4 out of 10 and a rank of 6 out of 10 for financial strength and momentum.
Taiheiyo Cement
The fund purchased 459,200 shares of Taiheiyo Cement (TSE:5233, Financial), giving the position 1.23% of equity portfolio space. Shares averaged 2,098 yen ($15.52) during the first quarter; the stock is modestly undervalued based on Friday’s price-to-GF Value ratio of 0.86.
The Japanese construction company has a GF Score of 81 out of 100 based on a GF Value rank of 10 out of 10, a growth rank of 6 out of 10, a financial strength rank of 4 out of 10 and a rank of 7 out of 10 for profitability and momentum.
Warrior Met Coal
The fund sold 309,886 shares of Warrior Met Coal (HCC, Financial), trimming 20.98% of the position and 20.98% of its equity portfolio.
Shares of Warrior Met Coal averaged $34.90 during the first quarter; the stock is modestly overvalued based on Friday’s price-to-GF Value ratio of 1.19.
The Brookwood, Alabama-based steel company has a GF Score of 60 out of 100 based on a financial strength rank of 7 out of 10, a profitability rank of 6 out of 10 and a rank of 3 out of 10 for GF Value and momentum. Despite this, the GF Score may not give an accurate picture of the stock’s potential since it does not have a value for the growth rank.
Other gurus with holdings in Warrior Met Coal include Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Ken Heebner (Trades, Portfolio)’s Capital Growth Management.
Bank of Ireland
The fund sold 1,002,535 shares of Bank of Ireland (LSE:BIRG, Financial), trimming 13.41% of the position and 1.22% of its equity portfolio.
Shares of Bank of Ireland averaged 6.02 euros ($6.36) during the first quarter; the stock is modestly overvalued based on Friday’s price-to-GF Value ratio of 1.299.
The Dublin, Ireland-based bank has a GF Score of 61 out of 100 based on a momentum rank of 9 out of 10, a growth rank of 5 out of 10, a profitability rank of 4 out of 10, a financial strength rank of 3 out of 10 and a GF Value rank of 1 out of 10.
