First Pacific Advisors Buys Alcoa Inc, Cuts Lowe’s, Increases Qualcomm

“FPA is a leading practitioner of value investing. Providing a prudent place to invest, we focus on generating superior returns over the long-term coupled with capital preservation. We consider ourselves investors, not traders, and foster a culture that promotes high ethical standards…Our goal is to provide a consistent, risk-averse and disciplined approach to long-term investing in individual securities with the objective of achieving superior total returns for client portfolios.” – Website of First Pacific Advisors.

The hedge fund’s 13F filing for the quarter ending September 30, 2013, reveals that it entered 9 new investments, augmented positions in 32 stocks and reduced its holdings in 65 stocks. It completely sold out its position in 6 investments, whereas 21 holdings remained unchanged.

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FPA’s new investments

FPA’s five largest new investments by market value were Alcoa Inc (NYSE:AA) ($111.38M), Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS) ($8.8M), Aaron’s, Inc. (NYSE:AAN) ($3.3M), Stewart Information Services Corp (NYSE:STC) ($3.29M) and Myriad Genetics, Inc. (NASDAQ:MYGN) ($3.21M).

FPA’s investments trimmed

The fund cut back on its holdings significantly in these stocks: ITT Corp (NYSE:ITT) (-36%,), Unilever N.V. (ADR) (NYSE:UN) (-54%), Cabot Oil & Gas Corporation (NYSE:COG) (-60%), Lowe’s Companies, Inc.(NYSE:LOW) (-70%) and Omnicare, Inc. (NYSE:OCR) (-82%).

FPA investments increased

FPA boosted its holdings significantly in QUALCOMM, Inc. (NASDAQ:QCOM) (786%), A M Castle and Co (NYSE:CAS) (102%), Nordson Corporation (NASDAQ:NDSN) (61%), Ares Commercial Real Estate Corp (NYSE:ACRE) (42%) and Occidental Petroleum Corporation (NYSE:OXY) (36%).

FPA holdings completely divested

FPA sold off all its shares in Alliant Techsystems Inc. (NYSE:ATK), Health Net, Inc. (NYSE:HNT), Maidenform Brands, Inc. (NYSE:MFB), Rush Enterprises, Inc. (NASDAQ:RUSHB), Volt Information Sciences, Inc. (OTCMKTS:VISI), and Xerox Corporation (NYSE:XRX).

FPA’s major holdings as at September 30

The fund’s biggest five holdings as a percentage of the portfolio were Microsoft Corporation (NASDAQ:MSFT) (5.72%), Aon PLC (5.26%), CVS Caremark Corporation (NYSE:CVS) (4.32%), Occidental Petroleum Corporation (NYSE:OXY) (3.96%) and Oracle Corporation (NYSE:ORCL) (3.93%).

The total market value of the fund as at the end of the quarter was $9.69B.