On December 31, 2024, Donald Smith & Co (Trades, Portfolio) executed a notable transaction involving Genworth Financial Inc (GNW, Financial). The firm added 934,175 shares to its holdings, marking a 3.73% increase in its position at a trade price of $6.99 per share. This strategic move underscores the firm's commitment to its investment philosophy, focusing on undervalued stocks with potential for future earnings growth. The transaction reflects Donald Smith & Co (Trades, Portfolio)'s confidence in Genworth Financial's prospects, despite the challenges the company faces in the current market environment.

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

Donald Smith & Co (Trades, Portfolio), founded by Donald G. Smith, is renowned for its deep-value investment strategy. The firm employs a bottom-up approach, meticulously identifying companies that are undervalued yet possess significant potential for earnings growth. Donald Smith, the firm's founder, was a distinguished figure in the investment community, known for his expertise in identifying out-of-favor companies trading at discounts to tangible book value. The firm's top holdings include AerCap Holdings NV (AER, Financial), Eldorado Gold Corp (EGO, Financial), Genworth Financial Inc (GNW, Financial), Unum Group (UNM, Financial), and Civitas Resources Inc (CIVI, Financial), with a total equity of $4.18 billion.

Genworth Financial Inc: A Diversified Insurance Holding Company

Genworth Financial Inc is a diversified insurance holding company based in the USA, with a market capitalization of $3.1 billion. The company operates through segments such as Enact, Life and Annuities, and Long-Term Care Insurance, with the majority of its revenue generated in the United States. Genworth Financial offers a range of financial products, including traditional life insurance, mortgage insurance, fixed annuities, and variable annuities. Despite its diverse portfolio, the company faces challenges, as indicated by its current trading price of $7.27 and a price-to-earnings ratio of 36.35, suggesting a modest overvaluation compared to its [GF Value](https://www.gurufocus.com/term/gf-value/GNW) of $6.20.

Impact of the Transaction on Donald Smith & Co (Trades, Portfolio)'s Portfolio

The recent transaction increased Donald Smith & Co (Trades, Portfolio)'s total holdings in Genworth Financial Inc to 25,949,469 shares, representing 4.27% of the firm's portfolio. This addition had a 0.15% impact on the firm's overall portfolio, highlighting the strategic importance of Genworth Financial within the firm's investment strategy. Donald Smith & Co (Trades, Portfolio) remains the largest holder of Genworth Financial shares, with Jefferies Group (Trades, Portfolio) also maintaining a position in the stock. This move aligns with the firm's philosophy of identifying undervalued stocks with potential for future earnings growth.

Financial Metrics and Valuation of Genworth Financial Inc

Genworth Financial Inc is currently trading at $7.27, with a [price-to-earnings ratio](https://www.gurufocus.com/term/pe/GNW) of 36.35, indicating a modest overvaluation compared to its [GF Value](https://www.gurufocus.com/term/gf-value/GNW) of $6.20. The stock has a [GF Score](https://www.gurufocus.com/term/gf-score/GNW) of 66/100, suggesting poor future performance potential. The company's financial strength is reflected in its [Financial Strength](https://www.gurufocus.com/term/rank-balancesheet/GNW) rank of 5/10, while its [Profitability Rank](https://www.gurufocus.com/term/rank-profitability/GNW) is also 5/10. Despite these challenges, the stock has shown a year-to-date price change of 4.15%.

Performance and Growth Indicators

Genworth Financial's revenue growth over the past three years has been negative at -1.10%, with an EBITDA growth of -15.90% and earnings growth of -47.20%. These figures highlight the challenges the company faces in achieving sustainable growth. However, the stock has demonstrated resilience, with a year-to-date price change of 4.15%. The company's [Operating Margin](https://www.gurufocus.com/term/operating-margin/GNW) growth and [Gross Margin](https://www.gurufocus.com/term/gross-margin/GNW) growth remain stagnant, reflecting the need for strategic initiatives to drive future growth.

Conclusion and Market Position

Donald Smith & Co (Trades, Portfolio)'s investment in Genworth Financial Inc aligns with its philosophy of identifying undervalued stocks with potential for future earnings growth. Despite the challenges faced by Genworth Financial, the firm's strategic addition of shares underscores its confidence in the company's long-term prospects. As the largest holder of Genworth Financial shares, Donald Smith & Co (Trades, Portfolio) continues to play a pivotal role in the company's market position, with Jefferies Group (Trades, Portfolio) also holding a significant stake. This transaction highlights the firm's commitment to its deep-value investment strategy, focusing on companies with potential for future growth.

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.