Hedge Fund Tracking: Seth Klarman, Mohnish Pabrai And Meryl Witmer

by: Davy Bui

It may not be an exaggeration at this point to describe Seth Klarman as a legend in the value investing field as only Warren Buffett surpasses him among active value investors. Klarman's Baupost Group made relatively few moves in the last quarter of 2011:

  • Baupost's only new stake in Q4 was Targacept (TRGT), a biopharmaceutical company. At ~$33M, this position is relatively small compared to total assets but the company's tiny market cap limits how much cash Klarman can plow into the stock. With names like Enzon Pharmaceuticals (NASDAQ:ENZN), Theravance (THRX) and PDL Biopharma (NASDAQ:PDLI) in the portfolio, Klarman is very comfortable investing in the biotech sector.
  • Klarman's only full divestiture was Breitburn Energy Partners (BBEP). He also sold off significant portions of his Alere (NYSE:ALR) and PDLI stakes.
  • Klarman continues to be bullish on gold, adding to positions in Allied Nevada Gold (NYSEMKT:ANV) and Novagold Resources (NYSEMKT:NG).
  • View Baupost Group s complete filing in spreadsheet format.

Mohnish Pabrai is a renowned value investing author and self-professed Warren Buffett acolyte, even going as far as to bid $650,000 in winning a lunch with the Oracle of Omaha. Nowadays, he offers his own lunch dates up for auction to raise money for non-profit organizations. Pabrai was far more active than Klarman in Q4, adjusting all but two of his portfolio holdings:

  • New stakes included Terex (NYSE:TEX), DirecTV (NYSE:DTV) and Citigroup (NYSE:C). Of the three, Pabrai seemed most enthusiastic about TEX since his $30M buy equaled the combined stakes in DTV and C.
  • Pabrai sold off 5 stocks, with exits in Brookfield Infrastructure Partners (NYSE:BIP) and Brookfield Office Properties (BOP) comprising $76.9M of the estimated $77.5M fund raised in the sales. Pabrai also pared down positions in financial stocks like Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) and reduced his stake in Cresud (NASDAQ:CRESY) by over 70%.
  • Pabrai also raised his stake in Berkshire Hathaway (NYSE:BRK.B) from $650k to ~$34M, going from one of the smallest holdings in his portfolio to the second largest.
  • See all of Mohnish Pabrai s Q4 moves in spreadsheet format.

Meryl Witmer is probably best known as a member of the Barron's Roundtable, which holds court in the issues of that magazine at the beginning of every year. She is one of the few traditional value investors of the group, which always makes her picks interesting to me. Here are her Q4 highlights as ascertained from the filings of Eagle Value Partners:

  • Like Klarman, Witmer's Q4 activity was relatively subdued, with the only new buy being a fairly small bet on Delphi Automotive (NYSE:DLPH). Only two positions were exited: Abitibibowater (ABH) and Capital One Financial (NYSE:COF).
  • Witmer did not add significantly to any stakes but more than halved holdings of Collective Brands (NYSE:PSS) and Compass Minerals (NYSE:CMP).
  • Review every 2011 Q4 move by Meryl Witmer in spreadsheet format.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.