Before we move on from Form 13F filings, I have one more to cover. Back when I first started in this business, Michael Price was a rock star investor. He started with legendary value investor Max Heine and took over the firm and the management of the Mutual Series Fund when Mr. Heine died in 1988. Price racked up some pretty impressive returns and was one of the first mutual fund managers to take an activist approach and go head-to-head with management.
He got a lot of press and was the darling of the financial media at the time. He sold the firm to Franklin Templeton (BEN) in 1996, stepped down as fund manager in 1998 and left the firm for good in 2001. Since then he has been out of the spotlight, running his own money as well as a few clients at MFP Investments. Although no longer in the spotlight, he didn't lose his investment acumen; I have been happily stealing his ideas for fun and profit for years now.
Mr. Price continues to be a fan of the trade of the decade in small banks. He was very active in thrift conversion in the quarter, as he bought shares of Waterstone Financial (WSBF), Clifton Bancorp (CSBK) and he also added shares of Delaware-based The Bancorp (TBBK) and the largest Puerto Rico bank, Popular (BPOP); 27% of his portfolio is in financial services stock and a significant percentage of that is small regional and community banks that fit the trade of the decade profile.
He opened new positions in both General Motors (GM) and Ally Financial (ALLY) in the quarter. I am not a fan of bailout stocks and think that GM is still an unbelievably poorly run company. I was also a GM bondholder during the workout, and cannot even imagine investing in any security issued by the company, but investors without my aversion to those companies that took big bailout money in general and GM in particular should note that Mr. Price is a pretty smart guy and clearly sees long-term value in the two companies.
Mr. Price is being well rewarded for taking a stake in companies that will benefit from a strengthening housing market. He purchased shares of Realogy (RLGY), one of the largest brokerage firms that includes Centruy 21, Coldwell Banker, ERA, and Sotheby's real estate brokerages. He opened a new stake in Installed Building Products (IBP) a company that install insulation, garage doors, rain gutters, shower doors, closet shelving and mirrors for builders. He also bought shares of American Woodmark (AMWD) that makes cabinets and vanities for homebuilders. That stock is up over 15% today on the heels of a strong earnings report and stronger than expected housing starts report.
Mr. Price engaged in some bottom fishing in the quarter. He bought shares of International Game Technology (IGT) when the slot machine company sold off sharply on concerns about the strength of the gaming market. The stock has bounced nicely since the end of the quarter, so it will be interesting to see if he cases it when he files his next 13F report. He also added shares of a company that has been falling all year and is on my radar screen. Titan International (TWI) makes wheels and tires for off-road equipment used in agriculture, construction, mining and other industries. Business has been weak and there was an excess inventory of tires that now appears to be slowly worked off; demand should increase somewhat during the rest of the year.
Mr. Price also threw in the towel on his J.C. Penney (JCP) bet in the second quarter of the year. He had upped his position in 2013 but, as we now know, the turnaround never really turned at the department store. It lost a little bit less than Wall Street expected this quarter but the future of the retailer is still very much in question, in my mind. Other exits of note in the quarter included NovaGold Resources (NG), Vornado REIT (VNO), Lowe's (LOW), Symantec (SYMC) and Crocs (CROX).
Michael Price may not be a media darling anymore, but he is still a very smart and successful investor. I have made a lot of money stealing his ideas over the years, and long-term investors should add him to their unpaid research department and track his SEC filings closely.