Seth Klarman (Trades, Portfolio) has revealed an addition to his holding of Translate Bio Inc. (TBIO, Financial) by 2.85% according to GuruFocus’ Real-Time Picks.
Klarman is a value investor and portfolio manager of the investment partnership The Baupost Group. Founded in 1983, The Baupost Group now manages $7 billion, and has averaged returns of nearly 20% annually since its inception. Klarman is the author of the book "Margin of Safety," which sells for over $1,000 since it is out of print. Klarman attended Cornell University, where he received a degree in economics, and later attended Harvard University, where he earned an M.B.A.
Klarman has been adding to the holding since it was first purchased in the second quarter of 2018. On June 26, the guru purchased 500,000 shares for an average price of $22. Overall, the purchase had a 0.16% impact on the equity portfolio. GuruFocus estimates that the guru has gained 62.19% on the holding.
Portfolio overview
At the end of the first quarter, Klarman’s portfolio included 32 stocks, with eight new holdings. By weight, the portfolio is most invested in the communication services (43.30%), technology (16.12%) and consumer cyclical (14.49%) sectors.
New holdings at the end of the first quarter included Alphabet Inc. (GOOG, Financial), Facebook Inc. (FB, Financial) and HD Supply Holdings Inc. (HDS, Financial).
Translate Bio
Translate Bio is a clinical-stage mRNA therapeutics company developing a new class of potentially transformative medicines to treat diseases caused by protein or gene dysfunction. The company is developing MRT5005 for the treatment of cystic fibrosis and MRT5201 for the treatment of ornithine transcarbamylase deficiency.
On July 1, the stock was trading at $17.60 with a market cap of $1.10 billion. The company avoided the punishment that many publicly traded companies saw in March. The share price had been trending upward since April before seeing a slip during the time that Klarman made his purchase.
GuruFocus gives the company a financial strength rating of 5 out of 10 and a profitability rank of 1 out of 10. The company has a cash-to-debt ratio of 12.4 that places it higher than 55.44% of biotechnology companies. The debt-to-equity ratio similarly surpasses the industry. However, the company faces a negative operating and net margin percentage that has led to the low profitability rank. Cash flows have been increasingly negative over time for the company.
Klarman is by far the largest guru shareholder with 28.68% of shares outstanding. Other top guru shareholders include FMR LLC (Trades, Portfolio), Atlas Venture Advisors Inc. (Trades, Portfolio), RTW Investments LLC (Trades, Portfolio), BlackRock Inc. (Trades, Portfolio) and Omega Fund Management (US) Inc. (Trades, Portfolio).
Disclaimer: Author owns no stocks mentioned.
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