October 25, 2021

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Third Avenue Value Fund’s Top

2 min read

The
Third Avenue Value Fund
(Trades, Portfolio), founded by the late Martin Whitman, disclosed this week that its top trades during its fiscal third quarter included the closure of its Eagle Materials Inc. (EXP, Financial) holding and position boosts to Warrior Met Coal Inc. (HCC, Financial), PGS ASA (OSL:PGS, Financial) and Genting Singapore Ltd. (SGX:G13, Financial).

Managed by Matthew Fine, the fund seeks long-term capital appreciation by investing in global stocks across the market cap range with strong financial position that are trading below intrinsic value.

As of July 31, the fund’s $549 million equity portfolio contains 29 stocks, with one new position and a turnover ratio of 5%. The top four sectors in terms of weight are basic materials, financial services, industrials and consumer cyclical, with weights of 25.31%, 24.02%, 17.83% and 15.06%, respectively.

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Eagle Materials

The fund sold 116,074 shares of Eagle Materials (EXP, Financial), impacting the equity portfolio by -2.71%. Shares averaged $143.04 during the fiscal third quarter; the stock is slightly overvalued based on Thursday’s price-to-GF-Value ratio of 1.10.

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GuruFocus ranks the Dallas, Texas-based building materials company’s profitability 8 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank, a high Piotroski F-score of 7 and profit margins and returns outperforming more than 84% of global competitors.

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Gurus with holdings in Eagle Materials include
George Soros
(Trades, Portfolio)’ Soros Fund Management,
Steven Cohen
(Trades, Portfolio)’s Point72 Asset Management and
Chuck Royce
(Trades, Portfolio)’s Royce Investment Partners.

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Warrior Met Coal

The fund purchased 302,468 shares of Warrior Met Coal (HCC, Financial), boosting the position by 25.06% and impacting the equity portfolio by 1.03%. Shares averaged $17.49 during the fiscal third quarter; the stock is significantly overvalued based on Thursday’s price-to-GF-Value ratio of 1.44.

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GuruFocus ranks the Brookwood, Alabama-based steel company’s financial strength 4 out of 10 on the heels of a low Piotroski F-score of 2 and debt ratios underperforming more than 64% of global competitors.

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Jim Simons
(Trades, Portfolio)’ Renaissance Technologies also has a holding in Warrior Met Coal.

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PGS

The fund purchased 5,349,464 shares of PGS (OSL:PGS, Financial), expanding the position by 126.14% and impacting the equity portfolio by 0.48%. Shares averaged 5.09 Norwegian kroner (58 cents) during the third quarter; the stock is a possible value trap based on Thursday’s price-to-GF-Value ratio of 0.62 and a low financial strength rank of 3.

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GuruFocus ranks the Norwegian energy company’s financial strength 3 out of 10 on several warning signs, which include interest coverage and debt ratios underperforming more than 80% of global competitors.

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Genting Singapore

The fund purchased 3,421,300 shares of Genting Singapore (SGX:G13, Financial), increasing the position by 37.38% and impacting the equity portfolio by 0.37%. Shares averaged 84 Singaporean cents (62 cents) during the third quarter; the stock is significantly overvalued based on Thursday’s price-to-GF-Value ratio of 1.50.

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GuruFocus ranks the Singaporean resort and casino company’s financial strength 8 out of 10 on several positive investing signs, which include a strong Altman Z-score of 6 and interest coverage and debt ratios outperforming more than 81% of global competitors.

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