One stalwart value investor recently increased his stake in a bank and a crane maker, while exiting an investment in an appliance maker.
Edgar Wachenheim III’s
Greenhaven Associates bought up
Citigroup
stock, doubled an investment in
Terex,
and sold all its shares of
Whirlpool.
Greenhaven, which manages $9.4 billion of U.S.-traded securities, disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
Citigroup stock ended 2023 with a 14% gain, compared with a 24% rise in the
S&P 500 index.
Greenhaven bought 2.9 million more shares in the fourth quarter to lift its investment to 16.1 million shares.
“We strongly believe that Citigroup’s shares are deeply undervalued because the bank and its management are much better and stronger than their reputations,” Wachenheim wrote in an email. “We hear from a number of sources that Jane Fraser is doing an excellent job as Citi’s relatively new CEO.”
Wachenheim said his firm expects Citi’s tangible book value will average $105-$110 in 2026, and that the bank should be able to earn at least $11 a share, assuming a normal economy. “Thus, if the shares merely sell at book value and at 10 times normal earnings, an investor can double his or her money over the next two or so years (which is why we are excited about the shares),” he wrote.
Citi stock closed at $53.67 on Friday, and the year-to-date gain stands at 4.3% compared with a rise of 2.5% in the S&P 500 index.
Where did the funds to buy more Citigroup stock come from? “We sold Whirlpool to pay for the shares of Citigroup, etc. that we were purchasing,” Wachenheim wrote, saying Whirlpool’s balance sheet became “too stretched” after it bought InSinkErator from Emerson for cash.
Whirlpool stock slipped 14% in 2023. Greenhaven owned 1.6 million Whirlpool shares at the end of September, and sold them all before 2023 ended.
“
Oshkosh
should be a major beneficiary of the sharp increase in spending for infrastructure in the U.S. over the next few years,” Wachenheim wrote. “A large fraction of the company’s revenue comes from products used in construction, including aerial work platforms, concrete mixing trucks, and cranes.”
He said Greenhaven believes Oshkosh can earn $15-$16 a share in 2026, and that the stock should be valued at about 16 times that, in line with the market. That implies a price topping out at about $256.
Oshkosh shares rose 23% in 2023, just shy of the S&P 500’s performance, leaving the stock at about $112 on Friday. But Greenhaven kept its Oshkosh investment flat from the end of the third quarter to the end of the fourth at 2.5 million shares.
On the other hand, Greenhaven bought 733,690 more shares of Terex, an Oshkosh peer, to end the fourth quarter with 1.5 million shares. Terex topped Oshkosh last year, surging 35%, so does the outlook for Oshkosh still hold for Terex?
“I could say ditto for Terex, which is a high-quality manufacturer of aerial work platforms (under the Genie brand), and also manufactures equipment that crushes and sorts aggregate,” Wachenheim wrote. His reasoning is that as spending on infrastructure boosts demand for aggregates—gravel, crushed stone, and sand used to make concrete and asphalt—producers will need more equipment.
“We believe that Terex’s earning power in 2026 will be $9.00-plus per share and that the shares are worth at least 12.5 times earnings—and thus that the shares in 2026 will be worth at least twice what they are selling for now.” Greenhaven’s call implies a price of about $113, while the stock ended Friday at $61.50 for a year-to-date gain of 7.0%.
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at [email protected] and follow @BarronsEdLin.
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