Value Investment Firm Adjusts Portfolio with New Buys and Key Position Changes
Hotchkis & Wiley, a renowned value investment firm established in 1980, has made strategic moves in the fourth quarter of 2023, as revealed by their latest 13F filing. With a keen eye for undervalued companies, the Los Angeles-based firm adheres to a philosophy centered on tangible assets, sustainable cash flow, and the potential for business improvement. Their recent portfolio adjustments reflect a continuous search for value in a dynamic market environment.
Summary of New Buys
Hotchkis & Wiley expanded its portfolio with 6 new stock additions, notably focusing on high yield corporate bonds:
- iShares Broad USD High Yield Corporate Bond ETF (USHY, Financial) with 583,650 shares, making up 0.08% of the portfolio and valued at $21.22 million.
- Banc of California Inc (BANC, Financial) with 907,286 shares, representing 0.04% of the portfolio, totaling $12.18 million.
- SPDR Portfolio High Yield Bond ETF (SPHY, Financial) with 400,000 shares, accounting for 0.03% of the portfolio and valued at $9.35 million.
Key Position Increases
The firm also significantly increased its stakes in several companies:
- General Motors Co (GM, Financial) saw an addition of 3,247,050 shares, bringing the total to 18,097,486 shares, a 21.87% increase in share count, impacting the portfolio by 0.41%, and valued at $650.06 million.
- Corebridge Financial Inc (CRBG, Financial) with an additional 5,157,570 shares, now totaling 10,010,679 shares, a 106.27% increase in share count, valued at $216.83 million.
Summary of Sold Out Positions
Hotchkis & Wiley completely exited positions in 7 holdings during the quarter:
- Equitable Holdings Inc (EQH, Financial) with all 3,341,032 shares sold, impacting the portfolio by -0.36%.
- Humana Inc (HUM, Financial) with all 161,085 shares liquidated, causing a -0.3% portfolio impact.
Key Position Reductions
Reductions in existing positions were also part of the firm's Q4 strategy:
- Microsoft Corp (MSFT, Financial) was reduced by 909,307 shares, a -48.05% decrease, impacting the portfolio by -1.09%. The stock traded at an average price of $355.93 during the quarter and has returned 10.30% over the past 3 months and 8.39% year-to-date.
- American International Group Inc (AIG, Financial) was reduced by 4,356,955 shares, a -30.77% decrease, impacting the portfolio by -1%. The stock traded at an average price of $63.72 during the quarter and has returned 8.18% over the past 3 months and 1.98% year-to-date.
Portfolio Overview
By the end of Q4 2023, Hotchkis & Wiley's portfolio comprised 477 stocks. The top holdings included 3.35% in Wells Fargo & Co (WFC, Financial), 3.28% in Telefonaktiebolaget L M Ericsson (ERIC, Financial), 3.24% in Citigroup Inc (C, Financial), 3.2% in F5 Inc (FFIV, Financial), and 2.71% in Elevance Health Inc (ELV, Financial). The firm's investments are well-diversified across all 11 industries, with a focus on Financial Services, Technology, Energy, Industrials, Healthcare, Consumer Cyclical, Communication Services, Utilities, Basic Materials, Consumer Defensive, and Real Estate.
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