Of course, Warren Buffett is the most admired living investor but for my money, I appreciate Seth Klarman’s insights and approach as much if not more than the Oracle. Readers can see all of the Baupost Group’s portfolio moves in easy-to-read spreadsheet format here but below is a summary of items that caught my eye:
- Klarman didn’t open any new big-money positions but he did add substantially to CapitalSource (CSE) and Theravance (THRX). Interesting to note that he moved up the capital structure with convertible debt on both those stocks in addition to adding more equity. Also of interest is Baupost’s selective move into financials with CSE and iStar Financial (SFI). Of course, Klarman thrives on complexity and Baupost has great expertise in commercial financing due to their activities; it may be perilous for less-informed investors to follow.
- Baupost seems to have completely abandoned its medical insurers position by selling off Wellpoint (WLP) and UnitedHealth Group (UNH). I’m not sure what caused the about-face but it definitely was not profit-taking.
- Klarman seems undaunted by the troubles currently roiling the media industry as he continues adding to his News Corp (NWS) stake.
- I noticed some bifurcation on his natural gas positions, with Klarman adding a third to his Breitburn Energy (BBEP) holdings, even as the share price halved, while at the same time, cutting its Linn Energy (LINE) stake by 20%. In a previous investor letter, he indirectly referred to both companies as being well-hedged for at least a few years.
Meryl Witmer, of Barron’s Roundtable renown, runs an extremely focused portfolio. View the spreadsheet breakdown here. My thoughts on her moves:
- Armstrong World Industries (AWI) makes a reappearance in the Witmer portfolio after being sold off last quarter. Unlike Bruce Berkowitz, who divested his Mohawk (MHK) stake, Witmer still seems positive on the flooring industry with stakes in MHK, AWI and Interface (IFSIA). In the midst of a horrific real estate crash, all three companies are still generating solid cash flow so they may not be bad bets.
- Witmer added a new position in Assurant (AIZ), which she discussed in this year’s Roundtable issue. while selling out of Comcast (CMCSA) and Texas Industries (TXI).
- Allegheny Energy (AYE), Kaiser Aluminum (KALU) and Navistar International (NAV) stakes were increased substantially.
- No positions were meaningfully pared, with the largest reduction occurring in Whirlpool (WHR), reduced 7%.
David Einhorn over at Greenlight Capital was a busy man, adding nearly 50 new positions. Probably best to look at the spreadsheet view to see all the changes but below were some items that caught my eye:
- At this rate, Einhorn’s going to become a card-carrying gold bug in no time. New positions in the streetTracks gold ETF (GLD) and Market Vectors gold miners ETF (GDX) comprised 38% of the $1.1B in new positions for Q4. Notice that Einhorn sold out of Kinross Gold (KGC) while buying GDX. Perhaps he didn’t want to bother with trying to add value to his gold-mining bullishness by trying to pick stocks within the sector?
- Two other stocks, AYE and Commscope (CTV), each accounted for roughly 10% of the new positions. Einhorn joins Meryl Witmer in the AYE position so investors looking to coat-tail may want to dig in there.
You can find other managers’ 13F-HR spreadsheets here.