There has been so much macro stuff flying around the past few days -- as folks have tried to explain why a world and market that were ending a week or so ago are now healthy and vibrant -- that it could make your head spin. I have heard about chart patterns being good since it means the Fed can't raise rates and all sorts of other silliness when I bothered to stick my head up.
My views on all this are pretty well known. The economy is better than it was but not really good, and those buying stocks because of an economic upturn driving earnings gains are just guessing and hoping. There are those who are long stocks because the Fed can't have a little more of a leg to stand on, but eventually it's going to become difficult to borrow enough money to buy back enough stock to hide the fact that earnings really are not very good.
I have spent most of the week reviewing 13F filings from various value, distressed and bank-stock investors. We have covered many of them, but before we move into the weekend and the Daytona 500, I want to cover an investor whom I have been stealing ideas from since the time when Bill Elliott, Cale Yarborough and Darrell Waltrip were dominating the Great American Race. When Michael Price was running the Mutual Shares Fund, he was the investing rock star of his day and the press covered him heavily. Today he runs a hedge fund that is mainly his money and doesn't attract the press he used to, but he is still a great stock picker.
He was as busy as I have seen him in some time in the fourth quarter of 2015, with 50 buys and 20 sells in his portfolio. I am going to hit the highlights and my favorites, but you should take the time to read the full filing. My first observation is that, like so many other great investors, he is a big fan of the trade of the decade in community bank stocks. More than 20% of the stocks in his portfolio are trade-of-the-decade stocks.
In the final quarter of 2015, he was a buyer of a new stake in Atlantic Capital Bancshares (ACBI) in Atlanta and First Guaranty Bancshares (FGBI) of Hammond, La. Both are trading right around book value at the current price. Price also opened a position in my favorite larger bank. Citizens Financial Group (CFG) was spun out of Royal Bank of Scotland (RBS) last year and is trading around 80% of book value. Price added to current positions in American River Bankshares (AMRB) and MSB Financial (MSBF) during the fourth quarter.
His fund also increased its stake in S&W Seed (SANW) by 91% and he is now the largest shareholder of the alfalfa seed supplier and stevia breeder. The stock has been falling but the company is on track for a record year, according to comments by CEO Mark Grewal in the recent earnings release.
Price was also buying energy-related names as 2015 came to a close. He bought new positions in Carrizo Oil & Gas (CRZO), Anadarko Petroleum (APC), Oasis Petroleum (OAS) and Whiting Petroleum (WLL). He added to American Midstream Partners (AMID), Devon Energy (DVN), Plains GP Holdings (PAGP), Plains All- American Pipeline (PAA) and Continental Resources (CR). Energy has been a tough market for everyone, but Price has a value investor's timeline and mindset, so I am sure he will be well rewarded as a long-term, patient investor in these depressed energy stocks. A little over 10% of his fund is invested in this potential high-return sector of the market.
The last pick I want to cover is one that would fall into my "buy what you use" wheelhouse. Crimson Wine Group (CWGL) was spun out of Leucadia National (LUK) several years ago and the stock has not done much since. The company makes what it calls ultra-premium and luxury wines and is based in Napa, Calif. The recent purchase of Seven Hills Winery in Walla Walla, Wash., gives Crimson nine wineries. The stock is trading at a small discount to book value and could well reward patient shareholders. If you buy as much wine as we do at Chez Melvin, you can lock in immediate returns by taking advantage of the 20% shareholder discount and annual free tastings.
Michael Price may not be in the headlines as much as he was back when in the late '80s and '90s, but he is still a very successful investor. It is worth your time to read the rest of his recent 13F filing.