Third Avenue Management (Trades, Portfolio) has based its investing on value-driven, bottom-up principles since a recognized leader in the field, Martin Whitman (Trades, Portfolio), founded it in 1986. The firm frequently files its quarterly portfolio update ahead of the deadline of 45 days past the end of the quarter and before many other investors. Third Avenue reported buying one new stock and buying more shares of five of its existing holdings on Thursday, the final day of the second quarter.
Whitman, chairman of Third Avenue, already posted his second-quarter thoughts in a letter on April 30, where he primarily reflected on the shortcomings of one of the central pieces of his investing strategy: buying growth in net asset value at a discounted price. Namely, managements of well-financed companies are in 2016 often hording cash at the expense of getting returns on it or are apathetic because they do not own any stock or have Wall Street pressure.
Whitman also expects his NAV common stocks in the near term to be “heavily influenced by market fluctuations in what is basically an irrational market from the point of view of long-term buy and hold investors.”
His firm’s new buy during the quarter was Johnson Controls Inc. (JCI, Financial), and it added to positions in Ralph Lauren Corp. (RL, Financial), Harman International Industries Inc. (HAR, Financial), Devon Energy Corp. (DVN, Financial), Weyerhaeuser Co. (WY, Financial) and Brookdale Senior Living Inc. (BKD, Financial).
Johnson Controls Inc. (JCI, Financial)
Third Avenue bought 325,700 shares of Johnson Controls, a 1.1% portfolio weight. The stock’s second quarter share price averaged $42.
Ralph Lauren Corp. (RL, Financial)
Third Avenue increased its position in Ralph Lauren by 75.5%, adding 86,400 shares for a total of 200,865. The position has a 1.56% portfolio weight. The stock’s average share price was $93.
Harman International Industries Inc. (HAR, Financial)
Third Avenue increased its position in Harman International Industries by 35.3%, adding 81,100 shares for a total of 311,073. The position has a 1.98% portfolio weight. The stock’s average share price was $78.
Devon Energy Corp. (DVN, Financial)
Third Avenue increased its position in Devon Energy by 12.9%, adding 100,300 shares for a total of 880,606. It has a portfolio weight of 2.54%. Its share price averaged $34.
Weyerhaeuser Co. (WY, Financial)
Third Avenue increased its position in Weyerhaeuser by 3.7%, adding 91,500 shares for a total of 2,577,510. The average share price was $31.
Brookdale Senior Living (BKD, Financial)
Third Avenue increased its position in Brookdale Senior Living by 7.6%, adding 133,500 shares for a total of 1,879,900. The holding has a 2.88% portfolio weight. Its share price average was $17.
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