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Mittleman Brothers, LLC Quarterly Report June 2019

Mittleman Brothers, LLC, a New York-based investment management firm, released its Quarterly Report – a copy of which may be downloaded below. The company offers its services to high-net-worth individuals and institutions. It focuses on generating returns from long-term investments in undervalued securities while reducing risk. As Co-founder, Chief Investment Officer, and Managing Partner, Christopher P. Mittleman is responsible for the firm’s investment policy and portfolio management.

In its Quarterly Report for June 2019, the firm reported that its Mittleman Global Value Equity Fund – Class P underperformed the MSCI ACW Total Return Index by 9.5% during the second quarter. The fund, which declined 4.6% return for Q2 2019, named its top 3 performing stocks (CMIC Holdings (2309 JP), Sberbank (SBRCY), and First Pacific Co. (142 HK)) and bottom 3 performing stocks (AMC Entertainment (AMC), Clear Media (100 HK), and Village Roadshow (VRL AU)).

“The Mittleman Global Value Equity Fund – Class P declined 4.6% net of fees in the second quarter of 2019, underperforming the MSCI ACW Total Return Index by 9.5%.

In Q2 2019, the top three performing stocks, from a contribution standpoint, were CMIC Holdings (2309 JP): $13.88 to $18.94 (+36.8%), Sberbank (SBRCY): $13.18 to $15.28 (+17.1%), and First Pacific Co. (142 HK): $0.36 to $0.41 (+11.4%).

The bottom three performing stocks, from a contribution standpoint, were AMC Entertainment (AMC): $14.85 to $9.33 (-35.8%), Clear Media (100 HK): $0.88 to $0.58 (-33.8%), and Village Roadshow (VRL AU): $2.30 to $1.98 (-14.0%). Detailed portfolio commentary for Q2 2019 follows below

Quarterly investment review

“Now, just remember that this thing isn’t as black as it appears.” — George Bailey, It’s a Wonderful Life5 . Equity markets were broadly higher in Q2 2019. Large-cap outperformed small-cap equities and growth remained in vogue over value once again. The S&P 500 returned 4.3% during the quarter and 18.5% calendar year-to-date. International (non-US) equities underperformed the US, even as the US dollar weakened. Developed markets, as measured by the MSCI EAFE Index, rose 3.7%, with strength from continental Europe. Emerging markets, as measured by the MSCI EM Index, eked out a 0.6% gain, hampered by China trade concerns. Nothing transpired during Q2 2019 that was so fundamentally negative as to justify the Fund’s already incredibly undervalued collection of equities getting cheaper, Meanwhile, generally expensive shares continued to rise sharply. Today, as in 1999, what the Fund owns is very cheap, and what is popular is very expensive. The popular, expensive shares have won the race over the past few years, and decisively so.”

You can download a copy of Mittleman Brothers, LLC’s Quarterly Report June 2019 here:

Mittleman Brothers, LLC Quarterly Report June 2019

You can also see the list of our 2019 Q2 investor letters and download them on this page.