Martin Whitman, the chairman of the board at Third Avenue Asset Management, made a relatively early release of his fund’s third quarter portfolio this week. While Whitman no longer manages the funds at Third Avenue, he continues to write the shareholder letter each quarter. Third Avenue focuses on valuing its stocks from the bottom up, focusing on the “creditworthiness,” the ability for the “issuer to grow net asset value (NAV)” and the stock’s price in relation to its NAV.
Over the duration of the third quarter the portfolio managers at Third Avenue bought three new stocks bringing the fund’s total to 37 stocks valued at $2.3 billion.
The following five companies represent the stocks that Third Avenue holds the largest stake in:
Wheelock and Co. (HKSE:00020)
Third Avenue’s largest holding is in the Hong Kong-based Wheelock and Co. The fund holds on to 30,518,500 shares of the company’s stock. Their position in Wheelock represents 1.50% of the company’s shares outstanding and 6.9% of the fund’s total portfolio.
During the third quarter Whitman cut his position -5.32% by selling a total of 1,714,000 shares. He sold these shares at an estimated average quarterly price of $40.64. Since this sell, the price per share has increased about 1.7%.
Whitman’s holding history as of the third quarter:
Wheelock is an investment holding company. It operates through four segments: property investment, property development logistics and communications, and media and entertainment (CME). The company is headquartered in Hong Kong and is also traded in America and Germany.
Wheelock and Co.’s historical revenue and net income:
The analysis on Wheelock and Co. reports that the revenue has been in decline over the past year, the price is nearing a 10-year high and the dividend yield is at a five-year high.
Wheelock and Co. has a market cap of $84.02 billion. Its shares are currently trading at around $41.35 with a P/E ratio of 3.12, a P/S ratio of 2.54 and a P/B ratio of 0.30. The company had an annual average earnings growth of 41.2% over the past 10 years.
GuruFocus rated Wheelock the business predictability rank of 2-star.
Covanta Holding Corporation (CVA)
Third Avenue’s second largest position is in Covanta Holding Corporation. The fund maintains a total of 7,193,557 shares of the company’s stock. Its position in Covanta represents 5.52% of the company’s shares outstanding and 6.5% of their total portfolio.
Third Avenue made no changes to his position in Covanta over the second quarter. The fund has held the same number of shares since third quarter 2012. Since Whitman’s initial buy in 2009, the fund has seen an average gain of 34%.
Whitman’s holding history as of the third quarter:
Covanta Holdings is a developer, owner and operator of infrastructure for the conversion of waste to energy, as well as other waste disposal and renewable energy production businesses. It conducts all of its operations through subsidiaries which are engaged predominantly in the businesses of waste and energy services.
Covanta Holdings’ historical revenue and net income:
The analysis on Covanta reports that the revenue has slowed down over the past year, the price is at a three-year high and the P/E and P/S ratios are nearing highs as well.
The Peter Lynch Chart suggests that Covanta Holdings is currently overvalued:
Covanta Holdings has a market cap of $2.77 billion. Its shares are currently trading at around $21.26 with a P/E ratio of 61.30, a P/S ratio of 1.70 and a P/B ratio of 3.10. The company had an annual average earnings growth of 1.9% over the past five years.
Henderson Land Development (HKSE:00012)
Third Avenue Asset Management’s third largest position goes to the Hong Kong-based Henderson Land Development. The guru currently holds on to 21,921,356 shares of the company’s stock. Its position in the company represents 0.83% of the company’s shares outstanding and 6% of their total portfolio.
During the third quarter Third Avenue made a slight reduction of his position in the company. The fund sold a total of 178,281 shares at an estimated average quarterly price of $47.78 per share. Since this sell, the price per share has increased approximately 0.9%.
Whitman’s holding history as of the third quarter:
Henderson Land Development is an investment holding company. The company and its subsidiaries operate business activities such as property development and investment, construction, infrastructure, hotel operation and management, department store operation and management, finance and project management.
Henderson Land Development’s historical revenue and net income:
The analysis on Henderson Land Development reports that the company’s revenue has been in decline over the past three years, its operating margin is expanding and its dividend yield is at a one-year high.
Henderson Land Development has a market cap of $128.04 billion. Its shares are trading at around $48.20 with a P/E ratio of 6.31, a P/S ratio of 7.51 and a P/B ratio of 0.63. The company also offers a dividend yield of 2.20%.
POSCO (PKX)
Third Avenue Asset Management also holds a 6% stake in POSCO. The guru fund owns a total of 1,916,774 shares of POSCO, representing 0.62% of the company’s shares outstanding.
The fund made no changes to its holdings in POSCO over the duration of the third quarter. Whitman last changed his holdings in first quarter 2013. Since Third Avenue bought back into POSCO in 2012 the fund has seen an average loss of 7%.
Third Avenue’s holding history as of the third quarter:
POSCO is engaged in the manufacturing and distribution of steel rolled products and plates in the domestic and overseas markets. It manufactures and sells a line of steel products such as plates, wire rods, hot and cold rolled products and stainless steel products.
POSCO’s historical revenue and net income:
The analysis on POSCO reports that the company has a poor buyback record, that it has issued KRW10.7 billion of debt over the past three years and its price has been in decline over the past year.
The Peter Lynch Chart suggests that the company is currently undervalued:
POSCO has a market cap of $23.18 billion. Its shares are currently trading at around $75.03 with a P/E ratio of 14.10, a P/S ratio of 0.40 and a P/B ratio of 0.60. The company had an annual average earnings growth of 2.8% over the past 10 years.
Bank of New York Mellon Corp (BK)
Third Avenue’s fifth largest position is in Bank of New York Mellon Corp. The guru holds on to a total of 4,114,350 shares, representing 0.36% of the company’s shares outstanding and 5.6% of his total portfolio.
During the third quarter the fund reduced its position 15.83% by selling a total of 773,529 shares of the company’s stock. They sold these shares at an estimated average quarterly price of $30.69. Since then the price per share has dropped about 0.6%.
Third Avenue’s holding history as of the third quarter:
The company is a global financial services company. Bank of New York Mellon provides a comprehensive array of services that enable institutions and individuals to manage and service their financial assets in more than 100 markets worldwide.
Bank of New York Mellon’s historical revenue and net income:
The analysis on BK reports that the company’s dividend yield is at a two-year low, its price is nearing a three-year high, they have issued $3.2 billion of debt over the past three years and the company’s interest coverage is comfortable.
The Peter Lynch Chart suggests that the company is currently overvalued:
Bank of New York Mellon Corp has a market cap of $35.24 billion. Its shares are currently trading at around $30.63 with a P/E ratio of 18.60, a P/S ratio of 2.40 and a P/B ratio of 2.40.
You can check out Third Avenue’s complete third quarter portfolio here.
Try a free 7-day premium membership.
Over the duration of the third quarter the portfolio managers at Third Avenue bought three new stocks bringing the fund’s total to 37 stocks valued at $2.3 billion.
The following five companies represent the stocks that Third Avenue holds the largest stake in:
Wheelock and Co. (HKSE:00020)
Third Avenue’s largest holding is in the Hong Kong-based Wheelock and Co. The fund holds on to 30,518,500 shares of the company’s stock. Their position in Wheelock represents 1.50% of the company’s shares outstanding and 6.9% of the fund’s total portfolio.
During the third quarter Whitman cut his position -5.32% by selling a total of 1,714,000 shares. He sold these shares at an estimated average quarterly price of $40.64. Since this sell, the price per share has increased about 1.7%.
Whitman’s holding history as of the third quarter:
Wheelock is an investment holding company. It operates through four segments: property investment, property development logistics and communications, and media and entertainment (CME). The company is headquartered in Hong Kong and is also traded in America and Germany.
Wheelock and Co.’s historical revenue and net income:
The analysis on Wheelock and Co. reports that the revenue has been in decline over the past year, the price is nearing a 10-year high and the dividend yield is at a five-year high.
Wheelock and Co. has a market cap of $84.02 billion. Its shares are currently trading at around $41.35 with a P/E ratio of 3.12, a P/S ratio of 2.54 and a P/B ratio of 0.30. The company had an annual average earnings growth of 41.2% over the past 10 years.
GuruFocus rated Wheelock the business predictability rank of 2-star.
Covanta Holding Corporation (CVA)
Third Avenue’s second largest position is in Covanta Holding Corporation. The fund maintains a total of 7,193,557 shares of the company’s stock. Its position in Covanta represents 5.52% of the company’s shares outstanding and 6.5% of their total portfolio.
Third Avenue made no changes to his position in Covanta over the second quarter. The fund has held the same number of shares since third quarter 2012. Since Whitman’s initial buy in 2009, the fund has seen an average gain of 34%.
Whitman’s holding history as of the third quarter:
Covanta Holdings is a developer, owner and operator of infrastructure for the conversion of waste to energy, as well as other waste disposal and renewable energy production businesses. It conducts all of its operations through subsidiaries which are engaged predominantly in the businesses of waste and energy services.
Covanta Holdings’ historical revenue and net income:
The analysis on Covanta reports that the revenue has slowed down over the past year, the price is at a three-year high and the P/E and P/S ratios are nearing highs as well.
The Peter Lynch Chart suggests that Covanta Holdings is currently overvalued:
Covanta Holdings has a market cap of $2.77 billion. Its shares are currently trading at around $21.26 with a P/E ratio of 61.30, a P/S ratio of 1.70 and a P/B ratio of 3.10. The company had an annual average earnings growth of 1.9% over the past five years.
Henderson Land Development (HKSE:00012)
Third Avenue Asset Management’s third largest position goes to the Hong Kong-based Henderson Land Development. The guru currently holds on to 21,921,356 shares of the company’s stock. Its position in the company represents 0.83% of the company’s shares outstanding and 6% of their total portfolio.
During the third quarter Third Avenue made a slight reduction of his position in the company. The fund sold a total of 178,281 shares at an estimated average quarterly price of $47.78 per share. Since this sell, the price per share has increased approximately 0.9%.
Whitman’s holding history as of the third quarter:
Henderson Land Development is an investment holding company. The company and its subsidiaries operate business activities such as property development and investment, construction, infrastructure, hotel operation and management, department store operation and management, finance and project management.
Henderson Land Development’s historical revenue and net income:
The analysis on Henderson Land Development reports that the company’s revenue has been in decline over the past three years, its operating margin is expanding and its dividend yield is at a one-year high.
Henderson Land Development has a market cap of $128.04 billion. Its shares are trading at around $48.20 with a P/E ratio of 6.31, a P/S ratio of 7.51 and a P/B ratio of 0.63. The company also offers a dividend yield of 2.20%.
POSCO (PKX)
Third Avenue Asset Management also holds a 6% stake in POSCO. The guru fund owns a total of 1,916,774 shares of POSCO, representing 0.62% of the company’s shares outstanding.
The fund made no changes to its holdings in POSCO over the duration of the third quarter. Whitman last changed his holdings in first quarter 2013. Since Third Avenue bought back into POSCO in 2012 the fund has seen an average loss of 7%.
Third Avenue’s holding history as of the third quarter:
POSCO is engaged in the manufacturing and distribution of steel rolled products and plates in the domestic and overseas markets. It manufactures and sells a line of steel products such as plates, wire rods, hot and cold rolled products and stainless steel products.
POSCO’s historical revenue and net income:
The analysis on POSCO reports that the company has a poor buyback record, that it has issued KRW10.7 billion of debt over the past three years and its price has been in decline over the past year.
The Peter Lynch Chart suggests that the company is currently undervalued:
POSCO has a market cap of $23.18 billion. Its shares are currently trading at around $75.03 with a P/E ratio of 14.10, a P/S ratio of 0.40 and a P/B ratio of 0.60. The company had an annual average earnings growth of 2.8% over the past 10 years.
Bank of New York Mellon Corp (BK)
Third Avenue’s fifth largest position is in Bank of New York Mellon Corp. The guru holds on to a total of 4,114,350 shares, representing 0.36% of the company’s shares outstanding and 5.6% of his total portfolio.
During the third quarter the fund reduced its position 15.83% by selling a total of 773,529 shares of the company’s stock. They sold these shares at an estimated average quarterly price of $30.69. Since then the price per share has dropped about 0.6%.
Third Avenue’s holding history as of the third quarter:
The company is a global financial services company. Bank of New York Mellon provides a comprehensive array of services that enable institutions and individuals to manage and service their financial assets in more than 100 markets worldwide.
Bank of New York Mellon’s historical revenue and net income:
The analysis on BK reports that the company’s dividend yield is at a two-year low, its price is nearing a three-year high, they have issued $3.2 billion of debt over the past three years and the company’s interest coverage is comfortable.
The Peter Lynch Chart suggests that the company is currently overvalued:
Bank of New York Mellon Corp has a market cap of $35.24 billion. Its shares are currently trading at around $30.63 with a P/E ratio of 18.60, a P/S ratio of 2.40 and a P/B ratio of 2.40.
You can check out Third Avenue’s complete third quarter portfolio here.
Try a free 7-day premium membership.
