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Third Avenue Management's High-Return Four

Posted
10/12/2013 8:57:00 PM
By: GuruFocus
Referenced Stocks:BKD;CUB;PPS;VLY

Third Avenue Management , considered a "balance sheet investor," has a portfolio of 145 stocks, 18 of them new, and a total value of $5.09 billion, with a quarter-over-quarter turnover of 8%. The portfolio is currently weighted with top three sectors: financial services at 20.5%, basic materials at 15% and technology at 14.9%. The firm has averaged a return of 11.41% over 12 months. In 2012, Third Avenue Management returned 27.48% against the S&P500's 15.4%.

Led by its founder and chairman, Martin Whitman , Third Avenue Management measures a company's value based on its current balance sheet versus projected earnings and revenues. As such, Third Avenue Management is focused on the here and now reality of a business, investing in safe companies that are priced low.

Here's a review of the four companies with the highest rate of return in the firm's portfolio, all of which were new buys in the second quarter of 2013.

Post Properties Inc. ( PPS )

Rate of Return: 30.76%

Down 6% over 12 months, Post Properties Inc., a residential REIT, has a market cap of $2.46 billion; its shares were traded at around $45.02. The tangible book value is 20.98. PPS trades with a P/E ratio of 29.00 and a P/B of 2.10. The earnings yield is 2.80%.

Guru Action: As of Sept. 30, 2013, Third Avenue Management holds 422,734 shares values at around $20.9 million.

PPS is a relatively new holding for the firm, first bought in the second quarter of 2013. The firm bought 422,734 shares at an average price of $49.04, for a loss of 8.2%.

Track historical pricing, revenue and net income since 1993:



Valley National Bancorp ( VLY )

Rate of Return: 26.4%

Up 5% over 12 months, Valley National Bancorp has a market cap of $2.07 billion; its shares were traded at around $10.40. The tangible book value is 5.28. VLY trades with a P/E ratio of 14.60 and a P/B of 1.30. The earnings yield is 3.80%.

Guru Action: As of Sept. 30, 2013, Third Avenue Management holds 1,462,501 shares values at around $13.8 million.

VLY is another new holding for Third Avenue, first buying 1,462,501 shares in the second quarter of 2013, at an average price of $9.34, for a gain of 11.3%.

Track historical pricing, revenue and net income since 1990:



Brookdale Senior Living Inc. ( BKD )

Rate of Return: 23.14%

Up 11% over 12 months, Brookdale Senior Living Inc. has a market cap of $3.35 billion; its shares were traded at around $26.94. The tangible book value is 5.97. BKD trades with a P/B of 3.30. The earnings yield is 1.80%.

Guru Action: As of Sept. 30, 2013, Third Avenue Management holds 658,866 shares values at around $17.429 million.

Bought in the second quarter of 2013, BKD is another new holding for Third Avenue. The firm made a new buy of 658,866 shares at an average price of $27.55, for a 2.2% loss.

Track historical pricing, revenue and net income:



Cubic Corporation ( CUB )

Rate of Return: 22.54%

Up 2% over 12 months, Cubic Corporation, an aerospace and defense company, has a market cap of $1.38 billion; its shares were traded at around $51.76. The tangible book value is 20.98. CUB trades with a P/E ratio of 17.40 and a P/B of 1.90. The earnings yield is 8.60%.

Guru Action: As of Sept. 30, 2013, Third Avenue Management holds 342,405 shares values at around $16.47 million.

CUB is another new holding for Third Avenue, first buying 342,405 shares in the second quarter of 2013, at an average price of $45.71 for a gain of 13.2%.

Track historical pricing, revenue and net income:



Here's a graphic summary of Third Avenue Management's top buys, sells and holdings:



Study the rest of Third Avenue Management's portfolio .

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