Guru Martin Whitman (Trades, Portfolio) founded Third Avenue Management (Trades, Portfolio), and its investment philosophy tends to reflect his. There is often overlap between Whitman's investments and Third Avenue's.
“Macroeconomic influence and short-term price fluctuations are irrelevant when they do not affect intrinsic value,” Third Avenue’s website states, “since over the long run, we believe, the real value of our investments will manifest in our returns. … This fundamental conviction defines our singular investment culture, which was established and shaped by revolutionary value investor Marty Whitman.”
In 2013, Third Avenue enjoyed an 18.84% return. It fared even better in 2012 with a 27.48% return.
Third Avenue Management (Trades, Portfolio) added holdings in 16 companies that are new to its portfolio in the third quarter – Starwood Waypoint Residential Trust (SWAY, Financial), Zions Bancorp (ZION, Financial), Loews Corp (L, Financial), CBS Corp (CBS, Financial), Target Corp (TGT, Financial), Regal-Beloit Corp (RBC, Financial), Anixter International Inc (AXE, Financial), Pinnacle Entertainment Inc (PNK, Financial), Clean Harbors Inc (CLH, Financial),Century Communities Inc (CCS, Financial), UCP Inc (UCP, Financial), WCI Communities Inc (WCIC, Financial), Winthrop Realty Trust Inc (FUR), PNC Financial Services Group Inc (PNC), Wells Fargo & Co (WFC) and Navient Corp (NAVI).
Third Avenue bought 2,364,876 shares of Starwood, a California-based company that deals in single-family homes, for an average price of $26.68 per share. The transaction had a 1.3% impact on Third Avenue’s portfolio.
Third Avenue purchased 2,185,403 shares of Zions Bancorp, a bank holding company based in Salt Lake City, for an average price of $29.03 per share. That transaction also had a 1.3% impact on Third Avenue’s portfolio.
Third Avenue Management (Trades, Portfolio) added to its existing stakes in 16 other companies – Realogy Holdings Corp (RLGY), Tanger Factory Outlet Centers Inc (SKT), AGCO Corp(AGCO), Equity Commonwealth (EQC), Brookdale Senior Living Inc (BKD), First Industrial Realty Trust Inc (FR), Vornado Realty Trust (VNO), Weyerhaeuser Co (WY),Standard Motor Products Inc (SMP), United Stationers Inc (USTR), BlackRock Corporate High Yield Fund VI (HYT), Stepan Co (SCL), Isle of Capri Casinos Inc (ISLE),Western Asset Managed High Incm Fnd Inc (MHY), General Motors Co (GM) and American International Group Inc (AIG).
Weyerhaeuser is by far the largest stake in Third Avenue’s portfolio, more than double the volume of any other company. The purchase of 348,174 shares at an average price of $32.83 increased the firm’s Weyerhaeuser holdings to 9,722,375 shares, valued at more than $300 million. The third-quarter addition had only a 0.23% impact on the portfolio.
Third Avenue purchased 1,213,284 shares of Realogy Holdings, a New Jersey-based real estate company, for an average price of $39.12 per share. The acquisition had a 0.97% impact on Third Avenue’s portfolio.
The firm also purchased 1,006,273 shares of Tanger Factory Outlet Centers, a North Carolina-based real estate company, for an average price of $33.51 per share. The deal had a 0.7% impact on Third Avenue’s portfolio.
Divestitures and reductions
Third Avenue sold its stakes in 16 companies – Stanley Furniture Co Inc (STLY), Intel Corp (INTC), Minerals Technologies Inc (MTX), PHH Corp (PHH), Liberty Media Corporation (LMCK), Blucora Inc (BCOR), American Homes 4 Rent (AMH), Consolidated-Tomoka Land Co. (CTO), AVX Corp (AVX), Starz (STRZA), Liberty Media Corporation (LMCA), Verizon Communications Inc (VZ), Cal-Maine Foods Inc (CALM), Electronics for Imaging Inc (EFII), Select Income REIT (SIR) and Brookfield Property Partners LP (BPY).
Third Avenue sold its 3,228,534-share stake in Intel, a California-based semiconductor company, for an average price of $33.86 per share. The transaction had a -1.9% impact on Third Avenue’s portfolio.
Third Avenue reduced its holdings in 29 companies – Encana Corp (ECA), POSCO (PKX), Devon Energy Corp (DVN), Precision Drilling Corp (PDS), Semgroup Corp (SEMG), Bank of New York Mellon Corp (BK), Axiall Corp (AXLL), KeyCorp (KEY), Alleghany Corp (Y), Brookfield Asset Management Inc (BAM), Forest City Enterprises Inc (FCE.A), Leucadia National Corp (LUK), BlackRock Credit All Inc Trust IV (BTZ), Teleflex Inc (TFX), Excel Trust Inc (EXL), Bristow Group Inc (BRS),Rofin-Sinar Technologies Inc (RSTI), NVIDIA Corp (NVDA), Madison Square Garden Co (MSG), Kaiser Aluminum Corp (KALU), Multi-Color Corp (LABL), ICF International Inc (ICFI), Westwood Holdings Group Inc (WHG), Apache Corporation (APA), White Mountains Insurance Group Ltd (WTM), Encore Wire Corp (WIRE),Mantech International Corp (MANT), Alico Inc (ALCO) and Capital Southwest Corporation (CSWC).
Third Avenue reduced its stake in Encana, a Canadian oil and gas company, by 2,943,225 shares. The shares sold for an average price of $22.29. The sale had a -1.32% impact on Third Avenue’s portfolio.
POSCO, a South Korean steelmaking company, is the third-largest stake in Third Avenue’s portfolio. The sale of 393,519 shares for an average price of $79.97 had a modest impact (-0.56%) on the firm’s portfolio.
Forest City Enterprises, a Cleveland-based property management company, is the seventh-largest stake in Third Avenue’s portfolio. Third Avenue sold 683,632 shares for an average price of $20. The transaction had a -0.25% impact on the portfolio.
Devon Energy, an Oklahoma City-based natural gas and oil producer, is the eighth-largest holding in Third Avenue’s portfolio. The sale of 287,697 shares for an average price of $74.39 had a -0.44% impact on the portfolio.
Apache, a Houston-based oil and gas company, is the ninth-largest stake in Third Avenue’s portfolio. Third Avenue sold 59,339 shares for an average price of $99.04.
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