Finding Good Picks Among 13Fs

 | May 15, 2014 | 1:30 PM EDT
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Another and another batch of 13F filings have been released. One of my favorites, the Baupost filing is out. Baupost is the investment firm run by Seth Klarman, who after more than 30 years and a near 20% annualized rate of return, deserves to have his ideas looked at every time.

Baupost had some modest, yet meaningful activity. The firm opened a new stake in Cheniere Energy (LNG) a company that distributes and markets liquefied natural gas. The stake was worth $300 million so it was not an insignificant investment for Baupost.

Another $300 million stake was initiated in Idenix Pharmaceuticals (IDIX). Idenix has a market cap of under $900 million, so Baupost has a 30% stake in this business. Idenix is focused on developing treatments for viral diseases with a primary focus on hepatitis C treatments.  

Baupost completely exited stakes in Enzon Pharmacueticals (ENZN), Fidelity National Financial (FNF), and Rovi (ROVI). Baupost's biggest positions continues to be Micron Technology (MU).  

The Smead fund is another quality portfolio to follow. Operating out of Seattle, Washington -- about as far from Wall Street as you can get in the U.S. -- the $830 million portfolio held 28 securities as of March 31, 2014. I'm a big fan of fund managers who realize that holding hundreds of stocks offers no benefits of diversification.  

Bristol Myers Squibb (BMY) was a new position for Smead as was Chubb (CB). The firm sold out of its stake in Mylan (MYL).  

Smead's largest position was Gannett (GCI) a $6 billion collection of newspaper and media assets that Smead feels is very misunderstood. Gannett is the largest newspaper publisher in the U.S., but recently the company has been scooping up local TV stations in order to diversify its revenue base.

Gannett is a name I'm planning on digging deep into. I love businesses with lots of owned assets. Shares trade for $27 valuing the company at $6 billion. The shares yield nearly 3%.

Despite the frothy market, the idea list is expanding. In the event of a natural correction, having a buy list ready to go can create a bigger payoff than you realize.

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