On December 31, 2024, Donald Smith & Co (Trades, Portfolio) executed a strategic transaction involving Allegiant Travel Co (ALGT, Financial), adding 24,975 shares to its holdings. This acquisition increased the firm's position in Allegiant Travel Co by 2.51%, reflecting a calculated move to bolster its investment in the travel services company. The transaction was completed at a price of $94.12 per share, impacting 0.06% of the firm's portfolio. Post-transaction, Donald Smith & Co (Trades, Portfolio) holds a total of 1,018,449 shares, representing 5.60% of its holdings in Allegiant Travel Co.

Donald Smith & Co (Trades, Portfolio): A Deep-Value Investment Firm

Founded by Donald G. Smith, Donald Smith & Co (Trades, Portfolio) is renowned for its deep-value investment strategy. The firm focuses on identifying undervalued stocks with potential for earnings growth, employing a bottom-up approach. Donald Smith, who served as the Chief Investment Officer until 2019, was a pioneer in value investing, emphasizing investments in companies trading at discounts to tangible book value. The firm's top holdings include AerCap Holdings NV (AER, Financial), Eldorado Gold Corp (EGO, Financial), and Genworth Financial Inc (GNW, Financial), among others.

Allegiant Travel Co: An Overview

Allegiant Travel Co, based in the USA, provides a range of travel services, including air transportation and bundled travel packages. The company operates in segments such as Airline and Sunseeker Resort, with a market capitalization of $1.5 billion. Allegiant Travel Co offers customers the ability to purchase travel tickets at airport counters, online, or through its telephone reservation center. Despite a year-to-date price decline of 11.31%, the company has demonstrated a 31% revenue growth over the past three years, indicating a robust business model.

Transaction Details and Portfolio Impact

The shares were acquired at a price of $94.12, with the transaction impacting 0.06% of Donald Smith & Co (Trades, Portfolio)'s portfolio. This strategic addition aligns with the firm's value investment philosophy, reflecting confidence in Allegiant Travel Co's potential for recovery and growth. The firm's total holdings in Allegiant Travel Co now stand at 1,018,449 shares, representing 5.60% of its portfolio.

Financial Metrics and Valuation

Allegiant Travel Co is currently considered modestly undervalued with a [GF Value](https://www.gurufocus.com/term/gf-value/ALGT) of $93.85 and a price-to-GF value ratio of 0.87. The stock has a [GF Score](https://www.gurufocus.com/term/gf-score/ALGT) of 87/100, indicating good outperformance potential. Despite challenges, the company's [Profitability Rank](https://www.gurufocus.com/term/rank-profitability/ALGT) is 7/10, and its [Growth Rank](https://www.gurufocus.com/term/rank-growth/ALGT) is 8/10, reflecting a solid financial foundation.

Market and Industry Context

Operating within the transportation industry, Allegiant Travel Co faces challenges such as a negative ROE of -23.78%. The company's [interest coverage](https://www.gurufocus.com/term/interest-coverage/ALGT) ratio is 1.15, indicating potential concerns in meeting interest obligations. Despite these challenges, the company's strategic focus on growth and profitability positions it well for future recovery.

Conclusion

Donald Smith & Co (Trades, Portfolio)'s addition to its Allegiant Travel Co holdings is a testament to its commitment to value investing. The transaction reflects confidence in the company's potential for recovery and growth, despite current market challenges. As Allegiant Travel Co continues to navigate the complexities of the transportation industry, the firm's strategic investment underscores its belief in the company's long-term prospects.

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.