Third Avenue Management Raises Stake in Macerich

Author's Avatar
Aug 27, 2015
Article's Main Image

Martin Whitman (Trades, Portfolio)’s Third Avenue Management (Trades, Portfolio) puts its faith in a company’s current balance sheet rather than potential future revenues when making its investments. It’s a philosophy that has worked for Third Avenue, which recorded returns of 4.88% last year, 18.84% in 2013 and 27.48% in 2012.

Third Avenue Management (Trades, Portfolio)’s most significant transaction of the second quarter was its addition of 1,087,200 shares to its stake in Macerich Co. (MAC, Financial), a Santa Monica, Calif.-based Real Estate Investment Trust (REIT), for an average price of $81.12 per share. The deal had a 2.04% impact on Third Avenue’s portfolio.

Macerich, the seventh-most valuable stake in Third Avenue’s portfolio, has a market cap of $11.73 billion and an enterprise value of $18.79 billion. It has a P/E of 7.5, a Price/Book of 2.1 and a Price/Sales of 9.2. Third Avenue is Macerich’s leading stockholder among the gurus, but Jim Simons (Trades, Portfolio), Chris Davis (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Steven Cohen (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) also have shares of Macerich in their portfolios.

03May20171006361493823996.png

Of the many stocks that struggled on Monday, Macerich struggled more than most. Its stock fell 5.52%, opening the day at $76.30 and finishing the day down $4.34 per share.

Third Avenue also added 1,793,900 shares to its existing stake in Rayonier Inc. (RYN, Financial), a timber company based in Jacksonville, Fla., for an average price of $25.89 per share. The acquisition had a 1.15% impact on Third Avenue’s portfolio.

Rayonier, the sixth-most valuable stake in Third Avenue’s portfolio, has a market cap of $2.78 billion and an enterprise value of $3.5 billion. It has a P/E of 49.0, a Price/Book of 2.0 and a Price/Sales of 5.1. Mason Hawkins (Trades, Portfolio), Brian Rogers (Trades, Portfolio), Jim Simons (Trades, Portfolio), Chuck Royce (Trades, Portfolio), John Buckingham (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) have shares of Rayonier in their portfolios.

03May20171006361493823996.png

Third Avenue added 904,437 shares to its most valuable stake, Weyerhaeuser Co. (WY, Financial), a forest products company based in Washington state, for an average price of $32.16 per share. The transaction had a 0.72% impact on Third Avenue’s portfolio.

Weyerhaeuser has a market cap of $13.88 billion and an enterprise value of $18.2 billion. It has a P/E of 9.4, a Price/Book of 2.8 and a Price/Sales of 2.0. First Eagle Investment (Trades, Portfolio), Manning & Napier Advisors, Inc., Brian Rogers (Trades, Portfolio), Martin Whitman (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio), Ray Dalio (Trades, Portfolio), NWQ Managers (Trades, Portfolio) and Bill Frels (Trades, Portfolio) have shares of Weyerhaeuser in their portfolios.

03May20171006361493823996.png

Wildfires in Washington and Oregon pose a threat to Weyerhaeuser’s timber holdings in both states. This wildfire season has been the worst on record.

In all, Third Avenue added to more than two dozen existing stakes.

Third Avenue also invested in eight new stakes in the second quarter. Its most significant purchase was a 1,718,680-share stake in Masco Corp. (MAS, Financial), a Michigan-based maker of home improvement and construction products, for an average price of $23.69 per share. The acquisition had a 1.01% impact on Third Avenue’s portfolio.

Masco has a market cap of $8.59 billion and an enterprise value of $10.69 billion. It has a P/E of 11.0 and a Price/Sales of 1.0. Brian Rogers (Trades, Portfolio), Daniel Loeb (Trades, Portfolio), Richard Pzena (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), Charles Brandes (Trades, Portfolio), Manning & Napier Advisors, Inc., David Tepper (Trades, Portfolio), Martin Whitman (Trades, Portfolio), Jim Simons (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Chris Davis (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Robert Olstein (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Julian Robertson (Trades, Portfolio) and Murray Stahl (Trades, Portfolio) have shares of Masco in their portfolios.

03May20171006381493823998.png

Divestitures and reductions

Third Avenue sold 11 of its stakes in the second quarter. The most significant was the sale of its 2,640,875-share stake in Starwood Waypoint Residential Trust (SWAY, Financial), an Oakland, Calif.-based company that purchases, refurbishes, rents, maintains and manages single-family homes, for an average price of $25.58 per share. The deal had a -1.71% impact on Third Avenue’s portfolio.

Starwood Waypoint has a market cap of $916.58 million and an enterprise value of $1.21 billion. It has a Price/Book of 0.9 and a Price/Sales of 4.4. Pioneer Investments (Trades, Portfolio) has shares of Starwood Waypoint in its portfolio.

03May20171006381493823998.png

Third Avenue reduced about two dozen stakes in the second quarter. The most noteworthy reduction was Third Avenue’s sale of more than 90% of its stake in Valmont Industries Inc. (VMI, Financial), an Omaha, Neb.-based maker of irrigation equipment, windmill support structures, lighting and traffic poles and steel utility poles. Third Avenue sold 186,659 shares for an average price of $123.28 per share. The deal had a -0.58% impact on Third Avenue’s portfolio.

Valmont has a market cap of $2.38 billion and an enterprise value of $2.9 billion. It has a P/E of 20.4, a Price/Book of 2.2 and a Price/Sales of 0.9. Chuck Royce (Trades, Portfolio), Ron Baron (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Martin Whitman (Trades, Portfolio), CI Can-Am Small Cap, Jim Simons (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Donald Yacktman (Trades, Portfolio) and Murray Stahl (Trades, Portfolio) have shares of Valmont in their portfolios.

03May20171006391493823999.png

Third Avenue also sold nearly one-third of its stake in KeyCorp (KEY, Financial), a Cleveland-based financial services company. Third Avenue sold 1,233,438 shares of KeyCorp for an average price of $14.72 per share. The transaction had a -0.44% impact on Third Avenue’s portfolio.

KeyCorp has a market cap of $10.87 billion and an enterprise value of $18.07 billion. It has a P/E of 12.6, a Price/Book of 1.1 and a Price/Sales of 2.7. Richard Snow (Trades, Portfolio), Richard Pzena (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Martin Whitman (Trades, Portfolio), RS Investment Management (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), David Dreman (Trades, Portfolio), John Buckingham (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and Kahn Brothers (Trades, Portfolio) have shares of KeyCorp in their portfolios.

03May20171006391493823999.png

To view the portfolios of more gurus, visit the List of Gurus page. Not a premium member of GuruFocus? Try it free for 7 days.