Tracking Seth Klarman’s Baupost Group Holdings – Q2 2024 Update

This article is part of a series that provides an ongoing analysis of the changes made to Baupost Group’s 13F stock portfolio on a quarterly basis. It is based on Klarman’s regulatory 13F Form filed on 08/13/2024. Please visit our Tracking Seth Klarman’s Baupost Group Holdings article for an idea on how his holdings have progressed over the years and our previous update for the fund’s moves during Q1 2024.

Baupost Group’s 13F portfolio value decreased from $3.65B to $3.63B this quarter. The total number of 13F securities increased from 22 to 24. The portfolio is heavily concentrated with Liberty Global, Willis Towers Watson, CRH plc, Fidelity National Information Services, and Clarivate plc together accounting for ~58% of the 13F holdings.

Since inception (1982), Baupost Group’s 13F portfolio has accounted for between 2.4% to 15% of the Assets Under Management [AUM]. The current allocation is at the high-end of that range. The rest of the AUM is diversified among cash, debt, real estate, and hedges. On average, the fund has held ~25% cash over the last decade. Seth Klarman’s distinct investment style is elaborated in his 1991 book “Margin of Safety: Risk-averse value investing strategies for the thoughtful investor”. The book is out-of-print and copies sell for a huge premium.

New Stakes:

Humana Inc. (HUM): HUM is a fairly large 4.32% of the portfolio position purchased this quarter at prices between ~$301 and ~$374 and the stock currently trades at ~$353.

Solventum Corp (SOLV): The 2.65% SOLV stake established this quarter at prices between $50.75 and $70.06. The stock is now at $59.45.

WillScot Holdings (WSC): WSC is a 2.56% of the portfolio position purchased during the quarter at prices between $36.61 and $44.56. The stock currently trades at $37.01.

Capri Holdings (CPRI): The small 0.91% CPRI stake was purchased this quarter at prices between $30.95 and $45.36 and it currently goes for $32.91.

VeriSign Inc. (VRSN): The very small 0.52% VRSN position was established during the quarter at prices between ~$168 and ~$191 and it currently goes for ~$183.

Stake Disposals:

Warner Bros. Discovery (WBD): A fairly large stake in WBD was established in Q2 2022 at prices between ~$13 and ~$26. The next quarter saw a ~60% increase at prices between ~$11.30 and ~$17.50. The position was decreased by 85% in the last quarter at prices between $8.11 and $11.66. The disposal this quarter was at prices between $6.99 and $8.79. The stock is now at $7.63.

Stake Increases:

Willis Towers Watson (WTW): WTW is a large (top three) ~12% of the portfolio stake established in Q1 2021 at prices between ~$200 and ~$235. The two quarters through Q3 2021 saw a ~60% selling at prices between ~$202 and ~$270 while the next quarter there was a ~25% stake increase at prices between ~$226 and ~$249. There was a similar reduction in Q2 2022 at prices between ~$191 and ~$243. Q3 2022 saw a ~40% increase at prices between ~$192 and ~$221 while during Q1 2023 there was a one-third reduction at prices between ~$220 and ~$257. Q3 2023 saw a ~72% stake increase at prices between ~$196 and ~$234. The stock currently trades at ~$282. There was a minor ~6% increase this quarter.

CRH plc (CRH): The large (top three) 8.72% CRH stake was primarily built during Q3 2023 at prices between ~$53 and ~$60. The stake was decreased by 19% in the last quarter at prices between $65.92 and $87.20. This quarter saw a ~55% stake increase at prices between $72.72 and $86.02. The stock currently trades at ~$85.

Clarivate plc (CLVT): The 6.10% of the portfolio CLVT position was established during Q3 2023 at prices between $6.60 and $9.90. There was a ~13% stake increase in the next quarter. That was followed by a ~20% increase during the last quarter at prices between $7.01 and $9.44. This quarter saw another ~27% stake increase at prices between $5.32 and $7.65. The stock currently trades at ~$6.40.

Jazz Pharmaceuticals (JAZZ): The 3.74% position in JAZZ stake was purchased during Q1 2023 at prices between ~$134 and ~$161. There was a ~40% stake increase during Q2 2023 at prices between ~$123 and ~$147. That was followed by a ~25% increase during Q4 2023 at prices between ~$114 and ~$136. This quarter saw another ~50% stake increase at prices between ~$104 and ~$119. The stock is now at ~$114.

WESCO International (WCC): The 3.50% WCC position was purchased in the last quarter at prices between ~$133 and ~$194. This quarter saw the stake built at prices between ~$152 and ~$191. The stock is now at ~$159.

Eagle Materials (EXP): EXP is a ~2% of the portfolio stake established during the last quarter at prices between ~$196 and ~$272. This quarter saw a ~30% stake increase at prices between ~$213 and ~$274. The stock currently trades at ~$250.

Fortrea Holdings (FTRE): The ~2% FTRE position was primarily built this quarter at prices between $22.48 and $40.28. The stock currently trades at $22.39.

Herbalife (HLF): The 1.47% HLF position was increased by 34% in the last quarter at prices between $8.03 and $15.36. That was followed by a ~130% stake increase this quarter at prices between $7.65 and $11.70. The stock is now at $8.40.

GDS Holdings (GDS): The small ~1% GDS stake saw a ~65% stake increase this quarter at prices between $6.11 and $9.75. The stock currently trades at $13.36.

Stake Decreases:

Fidelity National Information Services (FIS): The large (top five) 7.28% FIS position was purchased during Q3 2022 at prices between ~$76 and ~$105 and it is now at $79.16. There was a ~250% stake increase during Q4 2022 at prices between ~$57 and ~$85. That was followed with a ~125% increase in the next quarter at prices between ~$50 and ~$78. Q2 2023 also saw a ~40% increase at prices between ~$52 and ~$59. This quarter saw a ~37% selling at prices between $66.89 and $78.

Alphabet Inc. (GOOG): The 5.4% GOOG stake was purchased in Q1 2020 at prices between ~$53 and ~$76. The last three quarters of 2020 had seen a ~75% selling at prices between ~$55 and ~$92. There was a ~265% stake increase in Q1 2021 at prices between ~$86 and ~$105. Q4 2021 saw a ~22% trimming at prices between ~$133 and ~$151 while next quarter there was a ~7% increase. The zig-zag trading pattern continued in the next quarter: ~30% reduction at prices between ~$106 and ~$144. That was followed with another ~60% selling during Q3 2022 at prices between ~$96 and ~$123. The stake was rebuilt next quarter at prices between ~$83.50 and ~$105. Q1 2023 saw a ~47% stake increase at prices between ~$87 and ~$109 while the next quarter saw a ~30% selling at prices between ~$104 and ~$128. There was another ~23% reduction during Q4 2023 at prices between ~$123 and ~$143. This quarter also saw a ~65% selling at prices between ~$152 and ~$187. The stock is now at ~$168. They are harvesting gains.

Viasat (VSAT): VSAT is a 4.81% of the portfolio position. Klarman first purchased VSAT in 2008 at a cost-basis in the high-teens. In July 2020, Baupost participated in ViaSat’s 4.47M share private placement by acquiring ~2.56M shares at ~$39 per share. The stock currently trades at ~$18. There was ~7% trimming in the last quarter and a similar reduction this quarter.

Jacobs Solutions (J): Jacobs Solutions is a ~2% of the portfolio stake established during H2 2023 at prices between ~$119 and ~$140. The stake was decreased by 30% in the last quarter at prices between ~$126 and ~$154. The stock currently trades at ~$148. There was a minor ~3% trimming this quarter.

Liberty Media SiriusXM (LSXMK): The ~1% LSXMK stake was primarily built in Q3 2020 at prices between ~$23 and ~$28. Q4 2020 saw a ~14% stake increase. The four quarters through Q2 2022 saw the position doubled at prices between ~$26 and ~$47. The stake was decreased by 69% in the last quarter at prices between $28.56 and $31.21. This quarter saw another ~75% selling at prices between $20.38 and $29.29. The stock currently trades at $22.67.

Note: The prices quoted above are adjusted for the Liberty Live spin-out and reclassification last August.

Theravance Biopharma (TBPH): TBPH is a ~1% of the portfolio position established in Q2 2014 as a result of the spinoff of TBPH from Theravance (now Innoviva). The spinoff terms called for Theravance shareholders to receive 1 share of TBPH for every 3.5 shares of Theravance held. The two quarters through Q3 2021 saw a ~50% stake increase at prices between ~$7 and ~$22.50. The three quarters through Q2 2023 saw a ~45% selling at prices between ~$9.70 and ~$12. There was a ~11% trimming in the last quarter. That was followed by a ~36% reduction this quarter at prices between $8.29 and $9.92. The stock is now at $8.38.

Note: Regulatory filings since the quarter ended show them owning 2.97M shares (6.12% of the business). This is compared to ~4M shares in the 13F report.

Kept Steady:

Liberty Global (LBTYK): LBTYK is currently the largest position at ~24% of the portfolio. It was established in Q3 2018 at prices between $25 and $28.50 and increased by ~120% next quarter at prices between $19.50 and $27.50. There was another ~27% stake increase in Q1 2019 at prices between $19.80 and $25.80. Since then, the activity had been minor. There was a ~10% reduction in Q2 2022 at prices between ~$22 and ~$26. The two quarters through Q3 2023 saw another ~10% trimming. The stock currently trades at $19.49.

The spreadsheet below highlights changes to Klarman’s 13F stock holdings in Q2 2024:

Source: John Vincent. Data constructed from Baupost Group’s 13F filings for Q1 2024 and Q2 2024.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.