Introduction to the Transaction
Donald Smith & Co (Trades, Portfolio)., a firm known for its value investing approach, has recently increased its stake in Tutor Perini Corp (TPC, Financial), a prominent player in the construction industry. On December 31, 2023, the firm added 659,657 shares to its portfolio, bringing its total shareholding to 3,899,899 shares. This transaction, executed at a price of $9.10 per share, represents a 0.21% impact on the firm's portfolio and increases its position in TPC to 1.22% of its total holdings, with a commanding 7.50% of TPC's shares outstanding.
Profile of Donald Smith & Co (Trades, Portfolio).
Donald Smith & Co (Trades, Portfolio). was founded by the late Donald G. Smith, who served as the Chief Investment Officer from 1980 until his passing in 2019. The firm's investment philosophy is deeply rooted in a bottom-up, deep-value approach, focusing on out-of-favor companies trading at discounts to tangible book value. With a portfolio of 61 stocks and top holdings in sectors such as Financial Services and Basic Materials, Donald Smith & Co (Trades, Portfolio). manages an equity portfolio valued at $2.91 billion. The firm's top holdings include AerCap Holdings NV (AER, Financial), M/I Homes Inc (MHO, Financial), and Unum Group (UNM, Financial), among others.
Details of Tutor Perini Corp (TPC, Financial)
Tutor Perini Corp, with its stock symbol TPC, operates within the USA and has been publicly traded since August 14, 1995. The company specializes in general contracting, construction management, and design-build services for both private and public clients. TPC's business is divided into three segments: Building, Civil, and Specialty Contractors, with the Civil segment being the most significant revenue contributor. Despite a market capitalization of $452.593 million, the company's financial performance has been challenging, with a current stock price of $8.70, reflecting a 4.4% decrease since the trade date. The GF Score for TPC stands at 67/100, indicating a potential for poor future performance.
Analysis of the Trade Impact
The recent acquisition by Donald Smith & Co (Trades, Portfolio). has a moderate impact on its portfolio, given the 0.21% trade impact. The timing of the trade, at the end of 2023, and the trade price of $9.10, suggest a strategic move by the firm to capitalize on TPC's value at a time when the stock was deemed fairly valued, with a GF Value of $8.76 and a Price to GF Value ratio of 0.99.
Market Performance of Tutor Perini Corp
Currently, TPC's stock price is slightly below the trade price, and the stock is considered fairly valued according to the GF Value. Historically, the stock has seen a 248% increase since its IPO, but it has experienced a year-to-date decline of 3.76%. These figures reflect the volatile nature of the construction industry and the challenges faced by Tutor Perini Corp.
Financial Health and Future Prospects of TPC
The financial health of Tutor Perini Corp is a mixed bag. With a Financial Strength rank of 4/10 and a Profitability Rank of 5/10, the company shows room for improvement. The Piotroski F-Score of 3 and an Altman Z score of 1.26 further indicate potential financial distress. However, the company's Growth Rank and GF Value Rank both stand at 5/10, suggesting average prospects in these areas.
Position of Donald Smith & Co (Trades, Portfolio). in Tutor Perini Corp
With the recent trade, Donald Smith & Co (Trades, Portfolio). has solidified its position as the largest shareholder in Tutor Perini Corp, holding a significant 7.50% of the company's shares. This position size is notable when compared to other gurus such as HOTCHKIS & WILEY, and Barrow, Hanley, Mewhinney & Strauss, who also hold TPC stock.
Sector and Industry Analysis
Donald Smith & Co (Trades, Portfolio).'s portfolio is heavily weighted towards the Financial Services and Basic Materials sectors. Within the construction industry, Tutor Perini Corp's standing is influenced by the firm's significant investment, which could signal confidence in the sector's outlook despite TPC's current financial metrics and market performance.
In conclusion, Donald Smith & Co (Trades, Portfolio).'s recent transaction in Tutor Perini Corp reflects a strategic investment decision based on the firm's value investing principles. While TPC's financial health and market performance present a complex picture, the firm's increased stake could be indicative of a belief in the company's long-term potential within the construction industry.
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.
