Seth Klarman is one of world's best investors, but gets very little attention relative to his peers. Klarman avoids activism, rarely if ever graces magazine covers and simply devotes all of his efforts to finding mispriced stocks. But thankfully, the mega-investor must file quarterly 13Fs that disclose his Baupost Group's equity positions -- and here's what the latest filing shows.
Now, Klarman's 30-year-plus track record of nearly 20% annualized returns makes him the envy of many professional investors. Even Warren Buffett once said that he views Klarman as one of the market's rare standouts.
Let's check out what Baupost's second-quarter 13F shows that Klarman likes:
Now, I've written about Cheniere a few times, but I've come to realize that the company has a very complicated capital structure that adds to the stock's undervalutation. The reality is that Cheniere has key liquid-natural-gas purchase agreements that stand to generate massive long-term cash flow going forward. As this becomes more clear to the market, I expect the stock to climb.
Baupost's latest 13F shows that the firm added some new names during the second quarter. The biggest of these were various securities related to the Liberty Media conglomerate, including Liberty Interactive (QVCA) and Liberty Media Corp. (LMCA) .
- Baupost bought about a 20% stake in micro-cap Cascadian Therapeutics (CASC) , a biotech that's focused on treating breast cancer.
- The firm took a new $200 million stake in Citigroup (C) , adding to a previous bet on Citigroup warrants.
The Bottom Line
The fact that a mega-investor like Klarman takes a position in something isn't necessary a green light for you to go out and buy it, too.
However, 13F filings are perhaps one of best free sources of new investment ideas -- and plucking picks from "cream-of-the-crop" investors is often a great plan.