PVAM's Q2 2019 vs. Q3 2019 13F Holdings: Key changes and insights for value investors

Pacific View Asset Management, LLC: Q2 2019 vs. Q3 2019 13F Holdings Comparison

Pacific View Asset Management, LLC (PVAM) is a California-based registered investment advisory firm that specializes in value investing. The company was founded in 2012 by a former investor at Diamond Hill Capital Management. PVAM manages a concentrated portfolio of long-term investments, focusing on high-quality, undervalued companies with strong fundamentals.

In its most recent 13F filing, PVAM reported its holdings for the second quarter of 2019 and the third quarter of 2019. The report reveals a number of changes to the company's portfolio over that period. In this blog post, we will summarize these changes and offer some insights into what they might mean for investors.

Portfolio Changes

The most significant change in PVAM's portfolio over the period in question was the acquisition of a new position in Universal Technical Institute Inc. (UTI). PVAM purchased 2,292,487 shares of the for-profit technical trade school, valued at $12,472,000, in both quarters. This represents an increase of 58.6% in the value of the position. UTI has been struggling in recent years, with declining enrollment and revenue. However, PVAM seems to see potential in the company, possibly due to an increased focus on training for the automotive and diesel industries.

On the other hand, PVAM reduced its holdings in Gulf Island Fabrication Inc. (GIFI), an oil rig builder based in Louisiana. The company has been impacted by a decline in offshore drilling activity, and PVAM reduced its holdings by 24.6%, from 723,407 shares to 483,070 shares, over the two quarters. The value of the position also declined by 24.6%.

PVAM also reduced its holdings in GSE Systems Inc. (GVP), a provider of simulation and training solutions for the power and process industries. The company has been struggling with declining revenue and profitability, and PVAM reduced its holdings by 25.2%, from 1,658,819 shares to 1,239,334 shares, over the two quarters. The value of the position declined by 25.2%.

The most significant divestment in PVAM's portfolio was Ameris Bancorp (ABCB), a bank holding company based in Georgia. PVAM held 125,341 shares of the company in the second quarter, but sold all of its shares in the third quarter. The value of the position was $4,912,000 in the second quarter and $0 in the third quarter. This represents a 100% reduction in both the number of shares held and the value of the position.

PVAM also sold its holdings in Granite Construction Inc. (GVA), Pinnacle Financial Partners Inc. (PNFP), and AIMMUNE Therapeutics Inc. (AIMT), among other companies.

Insights and Outlook

PVAM's portfolio changes over the two quarters suggest that the company is taking a cautious approach to investing in certain sectors. The reduction in holdings in GIFI and GVP, for example, indicates that PVAM may be wary of companies that are struggling in industries that are experiencing disruption or decline.

On the other hand, PVAM's acquisition of UTI signals that the company sees potential in a company that has been facing challenges. This suggests that PVAM is willing to take calculated risks in order to capture long-term value in certain opportunities.

Overall, PVAM's investment strategy appears to be focused on finding undervalued companies with strong fundamentals, even if those companies face short-term challenges. As long as those fundamentals remain intact and the companies can weather the storm, PVAM may see significant upside potential in these positions over the long term.

Investors looking to follow PVAM's lead may want to consider companies that are undervalued and have strong fundamentals, but may be facing near-term challenges. Additionally, investors may want to consider adding exposure to the automotive and diesel industries, as UTI's position in PVAM's portfolio suggests that these sectors may be poised for growth.