First Pacific Advisors (Trades, Portfolio), a Los Angeles-based investment management firm, recently filed their 13F report for the second quarter of 2023. The firm is renowned for its emphasis on value investing and manages several funds including the FPA Capital Fund (Trades, Portfolio), the FPA Crescent Fund, the FPA New Income Fund, the FPA Paramount Fund, the FPA Perennial Fund, and Source Capital, Inc. The firm's Chief Financial Officer is J. Richard Atwood.
The firm's investment philosophy is rooted in value investing, a strategy that involves picking stocks that appear to be trading for less than their intrinsic or book value. This approach often leads to investments in companies that are undervalued by the market, providing potential for significant returns when the market corrects the valuation.
Portfolio Overview
As of the end of Q2 2023, First Pacific Advisors (Trades, Portfolio)' portfolio contained 131 stocks with a total value of $6.73 billion. The top holdings were CMCSA (6.54%), ADI (6.48%), and GOOGL (5.91%).
Top Three Trades of the Quarter
The following were the firm's top three trades of the quarter:
Broadcom Inc (AVGO, Financial)
First Pacific Advisors (Trades, Portfolio) reduced their investment in Broadcom Inc (AVGO) by 91,254 shares, impacting the equity portfolio by 0.93%. During the quarter, the stock traded for an average price of $712.03. As of August 15, 2023, Broadcom Inc (AVGO) had a price of $840.21 and a market cap of $346.74 billion. The stock has returned 54.60% over the past year. GuruFocus gives the company a financial strength rating of 6 out of 10 and a profitability rating of 9 out of 10. The company's valuation ratios include a price-earnings ratio of 26.35, a price-book ratio of 15.92, a PEG ratio of 1.28, a EV-to-Ebitda ratio of 18.51, and a price-sales ratio of 10.24.
Douglas Emmett Inc (DEI, Financial)
During the quarter, First Pacific Advisors (Trades, Portfolio) bought 4,528,921 shares of Douglas Emmett Inc (DEI), bringing their total holding to 5,030,826 shares. This trade had a 0.85% impact on the equity portfolio. The stock traded for an average price of $12.09 during the quarter. As of August 15, 2023, Douglas Emmett Inc (DEI) had a price of $12.88 and a market cap of $2.15 billion. The stock has returned -39.05% over the past year. GuruFocus gives the company a financial strength rating of 3 out of 10 and a profitability rating of 7 out of 10. The company's valuation ratios include a price-earnings ratio of 39.03, a price-book ratio of 0.92, a EV-to-Ebitda ratio of 11.55, and a price-sales ratio of 2.22.
Alphabet Inc (GOOG, Financial)
First Pacific Advisors (Trades, Portfolio) reduced their investment in Alphabet Inc (GOOG) by 369,442 shares, impacting the equity portfolio by 0.61%. During the quarter, the stock traded for an average price of $115.57. As of August 15, 2023, Alphabet Inc (GOOG) had a price of $130.69 and a market cap of $1,644.50 billion. The stock has returned 6.32% over the past year. GuruFocus gives the company a financial strength rating of 9 out of 10 and a profitability rating of 10 out of 10. The company's valuation ratios include a price-earnings ratio of 27.69, a price-book ratio of 6.16, a PEG ratio of 1.09, a EV-to-Ebitda ratio of 17.70, and a price-sales ratio of 5.89.
In conclusion, First Pacific Advisors (Trades, Portfolio)' Q2 2023 13F filing reveals a strategic approach to value investing, with significant trades in Broadcom Inc, Douglas Emmett Inc, and Alphabet Inc. The firm's portfolio adjustments reflect its ongoing commitment to value investing and its ability to identify undervalued stocks with potential for significant returns.
