In the wake of the 13Fs filed with the SEC earlier this month, the portfolio analyses keep rolling. It’s now time to see what Baupost Group founder Seth Klarman had going on in Q4. Spoiler alert: Klarman was relatively quiet, his U.S. portfolio now composed of 19 entries vs. 20 in Q3.
Seth Klarman’s New Acquisitions
Last quarter, Seth Klarman added three new positions to his fund: Fidelity National Financial Inc (NYSE:FNF), Kindred Biosciences Inc (NASDAQ:KIN) and Alon USA Partners LP (NYSE:ALDW), which now account for a combined 2.9% of his portfolio.
Canyon Capital Has Tapped Into The Pandemic Fallout: In-Depth Analysis [Q4 Letter]
Canyon Balanced Funds was up more than 41% net since the end of last year's first quarter. It took about 10 months for the fund to recover from the lows in that quarter, a few months longer than the 2009 rebound after the Global Financial Crisis. The fund has a little over $26 million in Read More
The billionaire’s biggest buy was of insurance and mortgage giant Fidelity National Financial, which now composes 1.82% of his fund. On February 12th, the company reported full-year 2013 earnings of $108 million, down from $166 million in 2012. It has apparently been unfazed by lower earnings, the FNF stock price up +24.36% since the start of Q4 and +1.95% YTD. Both Daniel Loeb and John Paulson are also betting on this one.
Seth Klarman’s Increased Positions
Klarman continues to trust his instincts on a number of long-term picks, increasing his positions in five of them. In fact, he upped the ante in four of his top five allocations: Theravance Inc (NASDAQ:THRX), ViaSat, Inc. (NASDAQ:VSAT), BP plc (ADR) (NYSE:BP) and Idenix Pharmaceuticals Inc (NASDAQ:IDIX). The investor also increased his allocation in PBF Energy Inc (NYSE:BPF), now his ninth-largest position.
It was Theravance that got the biggest purchase, with Klarman acquiring 1.63 million shares at a value of $718 million. A steady performer in the biotech sector, Theravance benefits from its own development of drugs and strategic collaboration with pharmaceutical companies. Its stock has been fluctuating since October 2013, but news of Klarman’s purchase gave it a boost. THRX is up +11.58% YTD even though it endured larger-than-expected losses the last quarter.
Seth Klarman’s Decreased Positions
As for his reduced stakes, Klarman only wound down three, the largest being in Micron Technology, Inc. (NASDAQ:MU). The company is still the billionaire’s largest investment by a wide margin, composing 31.83% of his fund. It is also a top holding on the iBillionaire Index (NYSE:BILLION) and held by David Einhorn, Richard Chilton, Ray Dalio and George Soros. With the exception of Einhorn, all of the aforementioned investors decreased their MU positions in Q4.
Apart from Micron, Klarman scaled back his stakes in Rovi Corporation (NASDAQ:ROVI) and Enzon Pharmaceuticals Inc (NASDAQ:ENZN).
Seth Klarman’s Sold Out Positions
Klarman unloaded a handful of companies as well, which collectively composed 2.9% of his fund in Q3: Oracle Corporation (NYSE:ORCL), Central Pacific Financial Corp. (NYSE:CPF) and Ituran Location and Control Ltd. (US) (NASDAQ:ITRN).