The 13F trickle turns into a flood today as the deadline for the quarterly report is this afternoon. The afternoon press will be all abuzz talking about what Buffett, Ackman and other rock star investors have been buying. I don't normally comment on those, as there are hundreds of other folks that will be passing that information along. I find more value going down the path less traveled by tracking smaller investors who are piling up big gains away from the spotlight.
I don't usually comment on Seth Klarman's filing for exactly that reason, but I noticed something interesting in his filing that came in this morning. He was buying some energy-related names, including a new stake in Pioneer Natural Resources (PXD), a stock that David Einhorn thoroughly trashed at the Ira Sohn investment conference recently. It will be interesting to see which of the smart guys has this one right. Mr Klarman's fund also bought shares of KLX Incorporated (KLXI), Anterro Resources (AR) and Bellatrix Exploration (BXE) to increase his exposure to an oil price recovery.
One of my favorite investors to follow is Michael Price of MFP Investors. Mr. Price was a rock star in his own right back in the '80s and '90s as the manager of Mutual Shares and I can remember waiting to get his filings in the mail every quarter. Back then we couldn't access the filings as soon as they were filed at the SEC and actually paid for a service that delivered the copy by snail mail and fax. Although he has retired from the mutual fund giant, he still runs a hedge fund and continues to enjoy a great deal of success in the markets.
Mr. Price continues to be a buyer of the bank stocks that make up the trade of the decade. He added a little bit to one of my favorite little banks, Northeast Bancorp (NBN). He opened a new position in Towne Bank (TOWN), which serves the southeastern Virginia and northeastern North Carolina markets. He also took a stake in a thrift conversion out in Washington State that is very attractive. First Northwest Bancorp (FNWB) is based in Port Angeles, Washington and is a very attractive stock at current levels. The shares are trading at 83% of book value post offering, the equity-to-asset ratio is 20, so they are awash in cash right now.
He was also a buyer of second step conversion Beneficial Bancorp (BNCL). Pretty much all of the bank stock investors were buying the offering by this Philadelphia-based bank. This is a solid bank in a crowded market and it is worth considering, even though it trades right around book value at the moment. If we get a market pullback, Beneficial will be on the top of my must-buy list. Mr. Price holds a lot of small banks and appears to share my enthusiasm for the trade of the decade. He has several smaller banks in his portfolio and you will find it a worthwhile activity to search his most recent filings.
He was a buyer of S&W Seed (SANW), a California-based company that grows and sells alfalfa seeds and stevia leaf. The stock is not quite as cheap right now as I usually like, but business is pretty good for this company. Earnings have grown by triple digits this year, and analysts expect the same next year. The company is not feeling any pinch from water issues so far and has been diversifying away from California to reduce any risk moving forward.
I am intrigued by his new portfolio addition. Advanced Emission Solutions (ADES) provides environmental technologies and specialty chemicals to the coal-burning electric power generation industry. It markets refined coal technologies, emission control services, equipment and chemicals and is involved with research to reduce coal emissions in partnership with the Department of Energy. In spite of all the rhetoric, we still burn a lot of coal in the U.S. and emission reduction is a major concern.
Other notable buys this quarter include Avon (AVP), Ariad Pharmaceuticals (ARIA), US Steel (X), EMC (EMC) and Helmerich and Payne (HP). Large sales include DuPont (DD), Johnson & Johnson (JNJ) and Forest City Enterprise (FCE.A; FCE.B).
There will be a flood of filings this afternoon, and the weekend press will be full of 13f coverage. It should make for interesting reading and hopefully we can dig out some ideas that will make us money in the future.
