I promise this will be the last 13F filing I review this quarter. Next week, I will be sure to chime in with some predictions about what the Fed might do in June and how the market might react to what the Fed might do, some precise oil price forecasts for the next 10 days and maybe look through some charts for ascending ducks and flying-squirrel patterns that will give us some indication of what stocks might do for the next day. This will be the last report for this quarter on what investors with long histories of making money in the markets have actually been doing with their investors' cash.
I have been following Michael Price almost since the day I got into this business. Back then, he was the superstar of value investors as he was in the process of racking up an incredible track record at the Mutual series funds. Since then, he has sold the fund group to Franklin Resources (BEN) and gone on to new endeavors. He currently manages MFP Partners and is still a valuable source of ideas.
Price has been a steady participant in the trade of the decade for several years. While he continues to hold several small banks and in April was a big buyer of MB Bancorp (MBCQ) shares, he was selling several small banks in the first quarter of the year. I checked through the list of stocks he sold out of or reduced his position in and the gains were enormous, for the most part. While I am not ready or even close to ready to exit the sector in a big way, I cannot fault him for ringing the register in a confusing market. Notable sales include Kearny Financial (KRNY), HomeTrust Bancshares (HTBI), Columbia Banking System (COLB), Heritage Commerce (HTBK), Towne Bank (TOWN), SI Financial Group (SIFI), First Northwest (FNWB) and American River Bankshares (AMRB).
He bought more Crimson Wine Group (CWGL) in the quarter as well. I have not bought this stock yet but in the next good pullback I will end up with some shares of the company in my portfolio. It is cheap at 1x book value and potentially badly undervalued based on the value of its acreage in California, Oregon and Washington state. I could also consider going active on this stock. By switching my house wine selections along with my daughter and her husband's circle of friends to Crimson brands exclusively, we could have a substantial impact on their bottom line. This has been something of a neglected stock since it was spun out of Leucadia (LUK) in 2013 and it appears to be worth a lot more than the current quotation.
One of the more interesting ideas from the 13F is Bermuda-based Belmond (BEL). Price increased his holding in the company by 43% in the quarter. Belmond is owner, part-owner or manager of 46 luxury hotel, restaurant, tourist train and river cruise properties. Any company that owns the Eastern Oriental Express, Cusco-Machu Picchu train services and the 21 Club in Manhattan has to be at least investigated. The company describes itself as a "hotel company and sophisticated adventure travel operator delivering luxury experiences in some of the world's most inspiring and enriching destinations." This is a fascinating collection of assets and my pencil and I will be spending some time digging deeper on this one over the weekend.
The fund was also buying selected energy assets during the first three months of 2016. They were buyers of Oasis Petroleum (OAS), increasing their position in the independent exploration and production company by 66%. The stock has suffered the fate of many shale-field producers in the past two years, falling from over $50 a share to single digits today. The stock is trading at 70% of tangible book value and could have substantial appreciation potential if oil prices stabilize over the next year.
Price continues to buy S&W Seed (SANW) as well, increasing his position by 25% in the quarter. S&W is the global leader in alfalfa seed and is also developing and producing stevia, the all-natural, zero-calorie sweetener for the food and beverage industry. With the warrants and convertible debentures included, Price is the owner of 19.9% of S&W and has filed a 13D stating he thinks the stock is an attractive investment and has no plans to seek control but may engage in discussions with management, the board and other stockholders of the company. Alfalfa is one of the largest crops in the world and issued primarily as forage for livestock and should be a growth market as the world needs to increase its food supply by an estimated 100% to feed its growing population. This could be a very interesting and incredibly profitable long-term holding for patient investors.
I have made a lot of money over the past three decades cherry-picking Michael Price's 13F filings and hope to continue to do so for years to come.