Seth Klarman (Trades, Portfolio), manager of The Baupost Group, has revealed a new buy into Outbrain Inc. (OB, Financial) according to GuruFocus’ Real-Time Picks, a Premium feature.
Klarman's Boston-based hedge fund searches for value opportunities through a wide array of options, including stocks, distressed debt, liquidations and foreign equities. Despite investing around the world in many different options, Klarman does not mind holding cash when opportunities are scarce. He adamantly warns people against investing without considering the risks incurred to generate returns.
On July 31, Klarman purchased 10.23 million shares to establish a new position in Outbrain (OB, Financial). On the day of the purchase, the shares traded at an average price of $19.62, placing Klarman at an estimated gain of 1.33% since the holding was established. Overall, the purchase had a 1.58% impact on the portfolio.
Outbrain is a platform powering the open web that matches audiences with personalized content and ads, driving quality engagement. Its platform delivers ads to end-users that appear as links to articles, products and videos on media partners' sites. It derives revenue primarily from advertisers through user engagement with the ads that it places on media partners' web pages and mobile applications. The company generates the vast majority of its revenue from Europe, the Middle East and Africa, followed by the U.S. and others.
On Aug. 10, the stock was trading at $19.88 per share with a market cap of $1.07 billion. The shares fell to $19 after debuting on the public market, but have clawed their way back toward $20 per share over the last week.
GuruFocus gives the company a financial strength score of 6 out of 10 and a profitability rank of 1 out of 10. There are currently no severe warning signs issued for the company. Last year, Outbrain brought in elevated cash flows and reported positive net income after reporting losses in the year prior.
Klarman is currently the only guru shareholder and claimed 19% of shares outstanding for the company with the new buy.
Portfolio overview
Klarman’s portfolio contains 58 stocks with 18 new holdings as of the end of the first quarter. It is valued at $12.53 billion and has seen a turnover rate of 21%. Top holdings include Intel Corp. (INTC, Financial), Liberty Global PLC (LBTYK, Financial), eBay Inc. (EBAY, Financial), Qorvo Inc. (QRVO, Financial) and Viasat Inc. (VSAT, Financial).
The top sectors represented are technology (32.82%), communication services (31.31%) and financial services (11.55%).
