On Wednesday, May 14th, Seth Klarman’s Baupost Group, presented its Form 13F Filing for the first quarter of 2014 at the U.S. Securities and Exchange Commission. Over the three months ending on March 31st, the fund started only 4 new stock positions, but increased its stakes in several of its preexisting holdings. So, let’s take a look at Mr. Klarman’s portfolio for Q1 2014:
Baupost Group’s strong focus on technology stocks continued through the first quarter, with tech stocks accounting for more than 53% of its portfolio’s value. Its most valuable position –which remained unchanged in relation to the previous quarter, is that in Micron Technology, Inc. (NASDAQ:MU), a $27.4 billion market cap manufacturer and marketer of DRAM, NAND Flash memory, CMOS image sensors and other semiconductor components. The 51.65 million shares that the fund owns (worth more than $1.1 billion) account for 29% of its portfolio.
The second-runner position, however, changed hands, after Baupost boosted its bets on ViaSat, Inc. (NASDAQ:VSAT), another tech company; a $2.7 billion market cap provider of high-speed fixed and mobile broadband services, satellite and wireless networks and secure networking systems, products and services. The fund’s stake, worth more than $780 million, accounts for about 19% of its portfolio. Finally, displaced from its previous second-runner up position, is Theravance Inc (NASDAQ:THRX), a $3.18 billion market cap biopharmaceutical company of which the fund owns more than 20 million shares, valued at roughly $640 million (about 15% of its portfolio).
Interestingly enough, Mr. Klarman’s fourth most valuable holding is a new one: Cheniere Energy, Inc. (NYSEMKT:LNG), a $13.6 billion market cap company engaged in liquid-natural-gas-related businesses. Over Q1 2014, the fund acquired 5.66 million shares of the company, worth more than $300 million, and accounting for 7.5% of its total equity portfolio.
Another acquisition that took place over the first quarter is that of Keryx Biopharmaceuticals (NASDAQ:KERX)’s stock. Baupost now owns about 6.3 million shares of the small-cap biopharmaceutical company, valued at more than $100 million.
Finally, Mr. Klarman’s fund bought, over Q1, stock from two mid-cap tech companies: RF Micro Devices, Inc. (NASDAQ:RFMD) and TriQuint Semiconductor (NASDAQ:TQNT). The fund holds about $50 million in each one of these companies’ stock, and their combined valued stands for 2.5% of its equity portfolio’s value.
Seth Klarman’s Baupost Group is the world’s 11th largest hedge fund, and not without a reason. His founder’s book, Margin of Safety, is somewhat of a bible amongst fundamental investors. His fund pretty much reflects Klarman’s investment philosophy, which emphasizes risk management. This has led it to retrieve some of the highest net gains in the industry. Its portfolio is worth more than $4 billion, and more than half of it is allocated at tech stocks. Another 28% is placed in healthcare stocks, and an extra 17%, in basic materials.
Disclosure: Javier Hasse holds no position in any stocks mentioned.