Seth Klarman is known for following a value-stock investing mentality , a style made famous by Warren Buffett. With value in mind, here are the changes made to the Baupost Group hedge fund in the second quarter.
New Stocks Added
Klarman is CEO of Baupost Group and the quarterly stock picks made by the Buffett disciple could be ones for investors to watch as they are likely trading below their perceived value or at a discount to some metric used by the hedge funder.
In the second quarter, Klarman added the following stocks, according to a new filing:
- CME Group (NASDAQ:CME): 619,000 shares, $136.7 million value end Q2
- Axalta Coating Systems (NYSE:AXTA): 1,274,356 shares, $43.6 million value end Q2
- Pershing Square Inc (NYSE:PS): 392,000, $12.9 million value end Q2
Of the new purchases, the buy of Pershing Square stock could be the most noteworthy, as Klarman is supporting a fellow hedge funder. Pershing Square is the newly public stock of the hedge fund and financial company ran by Bill Ackman.
Stock Exits
In the second quarter, Klarman made two exits to the portfolio, selling the entire stake in the following stocks:
Portfolio Changes
During the second quarter, Klarman made more than a dozen changes to the existing positions in the Baupost Group investment portfolio. Here are the changes made, as reported by 13finfo.
Increased Stock Positions:
- Norwegian Cruise Line Holdings (NYSE:NCLH): +113%
- Genuine Parts Company (NYSE:GPC): +89%
- GDS Holdings (NASDAQ:GDS): +24%
- Amazon.com Inc (NASDAQ:AMZN): +20%
- Alphabet Class C (NASDAQ:GOOG): +16%
- Ferguson Enterprises (NYSE:FERG): +1%
Decreased Stock Positions:
- WESCO International (NYSE:WCC): -54%
- Eagle Materials (NYSE:EXP): -40%
- Liberty Global (NASDAQ:LBTYK) -36%
- DNOW Inc (NYSE:DNOW): -23%
- Union Pacific (NYSE:UNP): -23%
- Restaurant Brands International (NYSE:QSR): -16%
- Americold Realty Trust (NYSE:COLD): -12%
- Aon PLC (NYSE:AON): -11%
The large number of sales saw major changes to the top 10 with Restaurant Brands, Union Pacific, Wesco and Aon all falling down the list with sales in the quarter.
Top 10 Holdings
At the end of the second quarter, these were the 10 largest holdings for Baupost Group, with their Q1 ranking in parentheses:
- Amazon.com (1): 17%
- Elevance Health (NYSE:ELV) (5): 9.1%
- Restaurant Brands International (2): 9%
- Alphabet Class A (6): 9%
- Ferguson (7): 6.4%
- Genuine Parts (Not in top 10): 6.1%
- Union Pacific (4): 6%
- Visa Inc (NYSE:V) (10): 4.4%
- Wesco (3): 4.2%
- Aon (9): 4.2%
As mentioned above, several of the decreases in positions during the quarter saw major movement into the top 10 holdings by the end of the quarter. While four stocks fell down the list, four also moved up the list. Amazon remained number one for the quarter. Genuine Parts was the only newcomer to the top 10 for the quarter.
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