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Seth Klarman Buys Warrants, 2 New Stocks

Holly LaFon

Holly LaFon

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Seth Klarman, the legendary investor of the Boston-based Baupost Group, bought four new stocks in the first quarter, according to GuruFocus Real Time Picks Data. He is a cautious value investor who often holds significant cash reserves when profitable ideas do not present themselves. “In my opinion, the market tells you when you buy things. And when things are really cheap, on a Graham and Dodd valuation basis, you should like them more,” he said in an Endowment Management Seminar in 2008.

The New Buys of First Quarter 2013

AIG Warrants (AIG.WS)

Klarman bought 638,943 AIG warrants in the first quarter, which have a value of $9.71 million. AIG issued warrants in January 2011 as part of its recapitalization. The warrants grant the holder the right to purchase AIG shares at $45 per share at any time in the next 10 years. The warrants reached a 52-week high of $19.75 this week.

Directv (DTV)

Klarman bought 207,300 shares of his third largest new buy at $52 per share in the first quarter. The current price is $64.70. Klarman traded a larger holding several years ago, buying shares at an average price of $30 and selling two quarters later at an average price of $37.



Directv is a provider of digital television entertainment in the U.S. and Latin America. Directv has a market cap of $35.91 billion; its shares were traded at around $64.71 with a P/E ratio of 13.80 and P/S ratio of 1.30. Directv had an annual average earnings growth of 28.5% over the past five years.

Citigroup Warrants (C.WS)

Klarman in his second largest new holding purchased 94,137,507 warrants of Citigroup (C), which have a value of $47.63 million.

Citigroup warrants are now trading at $0.62, near their 52-week high of $0.63, and off their 52-week low of $0.29.

Elan Corp. PLC (ELN)

Klarman bought 9,126,227 shares of Elan Corp. PLC, his largest new holding, at an average price of $11 per share in the first quarter. The stock gained 4% since then from his average purchase price.



Elan Corp. is an Ireland-based neuroscience-based biotech company working to develop much-needed medical therapies. Elan shareholders filed a lawsuit this week against guru Steven Cohen of SAC Capital for alleged insider trading.

Elan Corp PLC has a market cap of $6.91 billion; its shares were traded around $11.45 with a P/S ratio of 853.30 and P/B of 10.6.

Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Seth Klarman.


Rating: 2.7/5 (6 votes)

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