Insight into the Strategic Portfolio Adjustments of a Veteran Value Investment Firm

HOTCHKIS & WILEY, a prominent investment firm established in 1980 in Los Angeles, is renowned for its dedicated approach to value investing. The firm prioritizes undervalued companies with strong tangible assets, sustainable cash flow, and potential for business performance improvement. Their latest 13F filing for the third quarter of 2024 reveals significant portfolio adjustments, reflecting their strategic investment decisions.

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Summary of New Buys

HOTCHKIS & WILEY added a total of 75 stocks to their portfolio this quarter. Noteworthy new additions include:

• The Kraft Heinz Co (NASDAQ:KHC), with 11,714,730 shares, making up 1.37% of the portfolio and valued at $411.3 million.
• Norfolk Southern Corp (NYSE:NSC), comprising 836,340 shares, which is approximately 0.69% of the portfolio, valued at $207.83 million.
• Solventum Corp (NYSE:SOLV), with 1,799,880 shares, accounting for 0.42% of the portfolio and valued at $125.49 million.

Key Position Increases

HOTCHKIS & WILEY also increased their stakes in a total of 161 stocks, with significant increases in:

• CVS Health Corp (NYSE:CVS), with an additional 3,071,613 shares, bringing the total to 11,897,034 shares. This adjustment represents a significant 34.8% increase in share count, impacting the current portfolio by 0.64%, and a total value of $748.09 million.
• Dominion Energy Inc (NYSE:D), with an additional 3,278,175 shares, bringing the total to 8,436,875 shares. This adjustment represents a significant 63.55% increase in share count, valued at $487.57 million.

Summary of Sold Out Positions

In the third quarter of 2024, HOTCHKIS & WILEY completely exited 75 holdings, including:

• SilverBow Resources Inc (NYSE:SBOW), where all 482,160 shares were sold, impacting the portfolio by -0.06%.
• ACI Worldwide Inc (NASDAQ:ACIW), with all 358,815 shares liquidated, causing a -0.05% impact on the portfolio.

Key Position Reductions

Moreover, HOTCHKIS & WILEY reduced positions in 235 stocks. The most significant reductions include:

• Telefonaktiebolaget L M Ericsson (NASDAQ:ERIC), reduced by 35,859,689 shares, resulting in a -23.54% decrease in shares and a -0.77% impact on the portfolio. The stock traded at an average price of $7 during the quarter and has returned 18.32% over the past 3 months and 32.11% year-to-date.
• Citizens Financial Group Inc (NYSE:CFG), reduced by 5,419,280 shares, resulting in a -37.09% reduction in shares and a -0.68% impact on the portfolio. The stock traded at an average price of $40.41 during the quarter and has returned 17.30% over the past 3 months and 46.90% year-to-date.

Portfolio Overview

As of the third quarter of 2024, HOTCHKIS & WILEY's portfolio included 482 stocks. The top holdings were 4.02% in F5 Inc (NASDAQ:FFIV), 3.26% in $Citigroup Inc(C-N)$ (NYSE:C), 2.93% in Telefonaktiebolaget L M Ericsson (NASDAQ:ERIC), 2.57% in General Motors Co (NYSE:GM), and 2.49% in CVS Health Corp (NYSE:CVS). The holdings are mainly concentrated across 11 industries, including Financial Services, Technology, Healthcare, and more.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.