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Michael Price Adds to Stake in Popular Value Stock Trinity Place

- By Holly LaFon

Michael Price (Trades, Portfolio), founder and general partner of MFP Partners LP, a public equity manager in New York, has increased by 46.43% his stake in real estate development and intellectual property company Trinity Place Holdings (TPHS).


Price founded his own asset management company in 1998 based on value investing principles. He invests mostly in small and mid-cap companies primarily in the U.S. that trade at significant discounts to their intrinsic value. In potential investment companies, he emphasizes the importance of balance sheets, management teams and capability of withstanding economic downturns.

He started a position in Trinity Place Holdings in the fourth quarter of 2015 when the price averaged $6 and purchased more shares over the following years. According to a filing Wednesday, MFP purchased 2,127,146 shares of the company from another value-focused investor, Marcato Capital Management, the company's second-largest shareholder, on Tuesday.

MFP's purchase price per share was $3.60, lower than the stock's closing price for the day of $4.06. His total purchase price was $7.66 billion.

The transaction also boosted MFP's holding in the company to 6,708,538 shares, giving him a 21% stake. His ownership makes him the company's largest shareholder, displacing fellow value firm Third Avenue Management (Trades, Portfolio), which has a 15.77% stake. Kahn Brothers (Trades, Portfolio) & Co., another prominent value firm, is listed as one of the five largest owners.

Shares of Trinity Place Holdings have sunk 42% over the past year, closing at $3.95 per share Thursday with a $126.01 million market cap.

New York-based Trinity Place Holdings owns real estate in Lower Manhattan, Florida, New Jersey and Brooklyn. The total value of its real estate, as of March 31, was $227.86 million. In addition, it controls the brands Filene's Basement, Stanley Blacker and Running of the Brides, and a slogan.

In May 2018, the company purchased an $81.2 million apartment building in Brooklyn and has filed legal claims against the seller and contractor for construction defects that it discovered caused water damage to the property.

For the first quarter, the company reported $1.3 million in revenue, an increase of $896,000, primarily due to rents from the damaged building it acquired the previous May. It also recorded a net loss of $2.2 million, an increase of $655,000 from the previous year on higher costs and expenses.

Trinity Place Holdings ended the March quarter with $8.88 million in cash, declined from $11.496 million at year-end 2018.

The company is one of the 10 largest positions in Price's portfolio, which listed 110 stocks at the end of the first quarter. His largest position, Intel Corp. (NASDAQ:INTC), accounted for 13.51% of the publicly reported portfolio's space. S&W Seed Company (NASDAQ:SANW), the second-largest position, had a 5.3% portfolio weight.

See Michael Price (Trades, Portfolio)'s portfolio here.

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This article first appeared on GuruFocus.