The Third Avenue Value Fund (Trades, Portfolio) released its portfolio for the second quarter earlier this week.
Part of the late Martin Whitman’s Third Avenue Management (Trades, Portfolio), which is based in New York, the fund relies on a high-conviction strategy, investing in undervalued securities across several different industries, market capitalizations and regions. Portfolio manager Matthew Fine uses fundamental analysis to find stocks trading below their intrinsic value that compound asset values at double-digit rates.
Taking these criteria into consideration, NPORT-P filings show the fund entered one new position during the three months ended April 30, sold out of one stock and added to or trimmed a handful of other existing investments. Its most notable trades included a new holding in Horiba Ltd. (TSE:6856, Financial), increased bets on Comerica Inc. (CMA, Financial) and Seven & I Holdings Co. Ltd. (TSE:3382, Financial) and reductions in the Tidewater Inc. (TDW, Financial) and Bank of Ireland Group PLC (LSE:BIRG, Financial) stakes.
Investors should be aware that, just like 13F reports, NPORT-P reports do not provide a complete picture of a guru’s holdings. Filed by certain mutual funds after each quarter’s end, they collect a wide variety of information on the fund for the SEC’s reference, but in general, the only information made public is in regard to long equity positions. Unlike 13Fs, they do require some disclosure for long equity positions in foreign stocks. Despite their limitations, even these limited filings can provide valuable information. You can read more about form NPORT-P at the SEC website here.
Horiba
The fund invested in 80,500 shares of Horiba (TSE:6856, Financial), allocating 0.63% of the equity portfolio to the position. The stock traded for an average price of 7,233.55 yen ($49.97) per share during the quarter.
The Japanese tech company, which manufactures precision instruments for measurement and analysis, has a market cap of 344.81 billion yen; its shares closed at 8,165 yen on Wednesday with a price-earnings ratio of 8.27, a price-book ratio of 1.38 and a price-sales ratio of 1.23.
The GF Value Line suggests the stock is fairly valued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
At 97 out of 100, the GF Score indicates the company has high outperformance potential, receiving solid ratings for growth, profitability, financial strength, value and momentum.
The fund holds 0.19% of the company’s outstanding shares. No other gurus currently own the stock.
Comerica
Third Avenue boosted its Comerica (CMA, Financial) holding by 74.5%, picking up 194,986 shares. The transaction had an impact of 1.20% on the equity portfolio. Shares traded for an average price of $56.10 each during the quarter.
It now holds 456,728 shares in total, which occupy 3.56% of the equity portfolio. GuruFocus estimates the fund has gained 60.72% on the long-held investment.
The Dallas-based financial company, which provides banking and wealth management services, has a $5.63 billion market cap; its shares were trading around $42.76 on Thursday with a price-earnings ratio of 4.51, a price-book ratio of 1.01 and a price-sales ratio of 1.50.
According to the GF Value Line, the stock is significantly undervalued currently.
The GF Score of 57 implies the company has poor performance potential. While it raked in moderate ratings for profitability, financial strength and value, the growth and momentum ranks were low.
Of the gurus invested in Comerica, Steven Cohen (Trades, Portfolio) has the largest stake with 1.04% of its outstanding shares. Louis Moore Bacon (Trades, Portfolio), Richard Pzena (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Hotchkis & Wiley, Jefferies Group (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Keeley-Teton Advisors, LLC (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) also own the stock.
Seven & I Holdings
The Value Fund increased its investment in Seven & I Holdings (TSE:3382, Financial) by 24.37%, buying 83,100 shares. The transaction impacted the equity portfolio by 0.53%. During the quarter, the stock traded for an average per-share price of 5,988.39 yen.
The fund now holds a total of 424,100 shares, accounting for 2.72% of the equity portfolio. GuruFocus data shows it has gained 46.78% on the investment so far.
The Japanese retail holdings company, which operates 7-Eleven convenience stores, has a market cap of 5.48 trillion yen; its shares closed at 6,210 yen on Wednesday with a price-earnings ratio of 19.51, a price-book ratio of 1.59 and a price-sales ratio of 0.46.
Based on the GF Value Line, the stock appears to be modestly undervalued currently.
The GF Score of 88 means the company has good outperformance potential, driven by high ratings for four of the criteria as well as a more moderate financial strength rank.
With 0.05% of outstanding shares, Third Avenue is the largest guru shareholder of Seven & I Holdings. The T. Rowe Price Japan Fund (Trades, Portfolio) is also invested in the stock.
Tidewater
The fund curbed its Tidewater (TDW, Financial) stake by 14.81%, selling 177,442 shares. The transaction had an impact of -1.06% on the equity portfolio. The stock traded for an average price of $44.67 per share during the quarter.
It now holds 1.02 million shares, which represent its largest holding with a weight of 6.51%. GuruFocus says Third Avenue has gained around 52.28% on the investment over its lifetime.
The company headquartered in Houston, which operates a fleet of vessels that provide services to the offshore petroleum and wind industries, has a $2.53 billion market cap; its shares were trading around $50.22 on Thursday with a price-book ratio of 2.92 and a price-sales ratio of 3.16.
The GF Value Line suggests the stock is significantly overvalued currently.
The GF Score of 50 indicates the company has poor performance potential. Although it raked in a high financial strength rank, the ratings for the other four criteria were low.
Holding a 2.74% stake, Third Avenue is the company’s largest guru shareholder. Other top guru investors are Jim Simons (Trades, Portfolio)’ Renaissance Technologies, First Pacific Advisors (Trades, Portfolio), Hotchkis & Wiley, Mario Cibelli (Trades, Portfolio), Azvalor Managers FI (Trades, Portfolio) and Jones.
Bank of Ireland Group
Third Avenue trimmed its Bank of Ireland Group (LSE:BIRG, Financial) stake by 18.32%, dumping 695,193 shares. The transaction had an impact of -1.02% on the equity portfolio. Shares traded for an average price of 9.66 euros ($10.50) each during the quarter.
The fund now holds 3.09 million shares, which make up 4.54% of the equity portfolio as its fifth-largest position. GuruFocus found it has gained 61.75% on the investment to date.
The Irish commercial bank has a market cap of 9.01 billion euros; its shares closed at 8.59 euros on Wednesday with a price-earnings ratio of 11.11, a price-book ratio of 0.77 and a price-sales ratio of 2.79.
According to the GF Value Line, the stock is significantly overvalued currently.
The company has poor performance potential with a GF Score of 57. Despite being supported by a high momentum rank and middling marks for profitability, the growth, financial strength and value ratings are low.
The Value Fund holds 0.29% of the bank’s outstanding shares. No other gurus are invested in the stock.
Additional trades and portfolio performance
During the quarter, the Value Fund also sold out of Five Point Holdings LLC (FPH, Financial), curbed its investment in Subsea 7 SA (OSL:SUBC, Financial) and added to its holdings of Ultrapar Participacoes SA (BSP:UGPA3, Financial), CK Hutchison Holdings Ltd. (HKSE:00001, Financial) and Compania Sud Americana de Vapores SA (XSGO:VAPORES, Financial).
Over 40% of Third Avenue’s $706 million equity portfolio, which is composed of 32 stocks, is invested in the industrials and basic materials sectors.
GuruFocus data indicates the fund returned 17.45% in 2022, outperforming the S&P 500’s -18.11% return.
