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Holly LaFon
Holly LaFon
Articles (10163)  | Author's Website |

Third Avenue Value Fund Buys 3 Stocks in 2nd Quarter

Fund Marty Whitman founded releases portfolio update

The Third Avenue Value Fund (Trades, Portfolio), founded by revered investor Marty Whitman, on Thursday disclosed its portfolio changes for the quarter ended April 30, which included three new stocks purchased: Eagle Materials Inc. (NYSE:EXP), Bank of Ireland Group PLC (LSE:BIRG) and Mohawk Industries Inc. (NYSE:MHK).

The fund listed 29 stocks valued at $739 million at the end of the quarter, with 6% turnover. It is one of three equity strategies managed by the firm, which also oversees a small-cap fund and real estate fund. International stocks form a large portion of the value fund since it merged with the Third Avenue International Value Fund in March 2018.

The Third Avenue Value Fund (Trades, Portfolio) is managed by Matthew Fine and Michael Fineman. They described their approach in their first-quarter letter:

“The Third Avenue Management (Trades, Portfolio) investment philosophy revolves around our pursuit of significantly undervalued securities. The presence of low prices, not surprisingly, is frequently associated with a relatively poor near-term outlook for an industry, company or country. By definition, this approach is contrarian in nature, is more price-conscious than outlook-conscious, and requires a multi-year investment horizon. Further, cheapness itself, while critical to our investment approach, is not a sufficient condition for investment. In addition to the margin of safety provided by paying discounted prices, we strive to provide additional elements of safety through rigorous analysis of a company’s financial position, conservative estimates of business value, a healthy dose of skepticism as it relates to the ability to make accurate long-term forecasts, and avoidance of secular business decline and obsolescence risks. Regarding this form of value investing, in which there are a relatively limited number of practitioners, it is often said that the opportunities find us, rather than us finding them. Said another way, the investment approach is reactive to the opportunity set presented.”

New buys

Eagle Materials Inc. (NYSE:EXP)

Third Avenue Value Fund (Trades, Portfolio) purchased 162,208 shares of the company, giving it 1.99% portfolio weight. The stock’s second-quarter price averaged $79.

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Eagle Materials Inc. has a market cap of $3.67 billion; its shares were traded around $84.98 Wednesday with a price-earnings ratio of 63.89 and price-sales ratio of 2.91. The trailing 12-month dividend yield of Eagle Materials Inc. is 0.47%. The forward dividend yield of Eagle Materials Inc. is 0.46%. Eagle Materials Inc. had an annual average earnings growth of 14.2% over the past 10 years. GuruFocus rated Eagle Materials Inc. the business predictability rank of 2.5-star.

Bank of Ireland Group PLC (LSE:BIRG)

Third Avenue Value Fund (Trades, Portfolio) purchased 2,115,653 shares of the coming, giving it 1.83% portfolio weight. The stock’s second-quarter share price averaged around 6 euros.

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Bank of Ireland Group Plc has a market cap of $5.04 billion; its shares were traded around 4.66 euros Wednesday with a price-earnings ratio of 8.03 and price-sales ratio of 1.33. The trailing 12-month dividend yield of Bank of Ireland Group Plc is 3.43%. The forward dividend yield of Bank of Ireland Group Plc is 3.43%.

Mohawk Industries Inc. (NYSE:MHK)

Third Avenue Value Fund (Trades, Portfolio) purchased 81,902 shares of Mohawk Industries Inc., giving it 1.51% portfolio weight. The stock’s second-quarter share price averaged $132.

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Mohawk Industries Inc. has a market cap of $10.76 billion; its shares were traded around $148.60 Wednesday with a price-earnings ratio of 14.35 and price-sales ratio of 1.10. Mohawk Industries Inc. had an annual average earnings growth of 14.70% over the past five years.

The fund also sold out of its positions in DuPont de Nemours Inc. (NYSE:DD) and Antofagasta PLC (LSE:ANTO) during the quarter.

See the Third Avenue Value Fund (Trades, Portfolio)’s second-quarter portfolio here.

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About the author:

Holly LaFon
I'm a financial journalist with a Master of Science in journalism from Medill at Northwestern University.

Visit Holly LaFon's Website


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