Rich Pzena’s Latest Portfolio & Strategy Explained

Richard Pzena’s Pzena Investment Management reported an equity portfolio of approximately $30.8 billion in the latest quarter, reflecting the firm’s long-standing deep value investment philosophy. Pzena continues to focus on out-of-favor companies with depressed valuations, where normalized earnings power and mean reversion can drive substantial upside over time.

Unlike highly concentrated quality-growth investors, the portfolio is broadly diversified, with the top 10 holdings representing ~35.7% of total assets. This structure is consistent with Pzena’s approach of building a wide opportunity set across sectors, particularly in cyclical industries, financials, healthcare, and industrials. The firm tends to scale into positions when valuations are most compelling and trim as prices recover toward intrinsic value.

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Portfolio Snapshot

• Total Portfolio Value: ~$30.8B
• Top 10 Weight: 35.7% (moderately diversified)
• Turnover: Moderate — active rebalancing within a value framework

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Top Holdings & Weights

• Magna International (MGA) — ~$1.97B (6.39%)
• Cognizant Technology Solutions (CTSH) — ~$1.24B (4.04%)
• Tyson Foods (TSN) — ~$1.10B (3.57%)
• Baxter International (BAX) — ~$1.08B (3.52%)
• Bristol-Myers Squibb (BMY) — ~$1.04B (3.37%)
• CVS Health (CVS) — ~$989M (3.21%)
• Humana (HUM) — ~$949M (3.08%)
• Citigroup (C) — ~$927M (3.01%)
• Skyworks Solutions (SWKS) — ~$863M (2.80%)
• Capital One Financial (COF) — ~$836M (2.71%)

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Key Takeaways

Classic Deep Value Exposure
The portfolio is heavily tilted toward companies facing temporary headwinds, including healthcare (BMY, CVS, HUM), financials (C, COF), and cyclicals like Magna and Tyson. These positions reflect Pzena’s belief in earnings normalization rather than structural decline.

Diversification Over Concentration
With no single position above ~6.5%, the portfolio spreads risk across many ideas, consistent with a probabilistic value approach rather than concentrated bets.

Financials & Healthcare Emphasis
Large allocations to banks, insurers, and healthcare companies suggest a focus on sectors where sentiment has been weak but fundamentals remain resilient.

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Biggest Changes Last Quarter

Notable Adds

Humana (HUM)
Shares increased by +1.40M (+34.35%)
→ Signals rising conviction in managed care, potentially driven by long-term demographic tailwinds despite near-term cost pressures.

Skyworks Solutions (SWKS)
Shares increased by +3.48M (+27.57%)
→ Suggests a view that semiconductor cyclicality has created an attractive entry point.

Cognizant (CTSH)
Shares increased by +2.63M (+14.94%)
→ Indicates growing confidence in IT services recovery and margin stabilization.

Notable Trims

Citigroup (C)
Shares reduced by -2.44M (-22.98%)
→ Likely profit-taking after relative outperformance within financials.

Dollar General (DG)
Shares reduced by -3.78M (-35.40%)
→ Reflects reassessment amid ongoing consumer pressure and margin challenges.

CVS Health (CVS)
Shares reduced by -1.81M (-11.61%)
→ Partial trim while maintaining a meaningful position.

Magna International (MGA)
Shares reduced by -3.78M (-13.00%)
→ Rebalancing within a top holding after gains.

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Full Exits Last Quarter

Notable full exits include Comerica, Charter Communications, Goldman Sachs, FMC Corp, Cincinnati Financial, Archer-Daniels-Midland, Intel, and TPG.

→ These exits suggest capital recycling from positions that have either reached fair value or where the investment thesis has weakened.

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Summary

Pzena’s latest filing reinforces its disciplined deep value approach: investing in underperforming companies with the expectation of recovery in earnings and sentiment. The portfolio remains diversified, sector-balanced, and opportunistic, with notable additions in healthcare and technology-related cyclicals.

Recent activity shows a mix of adding to beaten-down names while trimming financials and consumer exposures. Overall, the strategy remains consistent—identify mispriced assets, build positions at attractive valuations, and patiently wait for normalization to unlock value.