"Tracking Seth Klarman’s Baupost Group Holdings – Q2 2013 Update"
"This article is part of a series that provide an ongoing analysis of the changes made to Baupost Group's U.S. stock portfolio on a quarterly basis. It is based on Klarman’s regulatory  filed on 08/14/2013. Please visit our  article for an idea on how his holdings have progressed over the years and our  highlighting the fund's moves during Q1 2013.Klarman’s US long portfolio increased from ~$3.1B to ~$4B this quarter. A very large ~15% position in Micron Technology (MU) was established this quarter and the ~10% position in Theravance (THRX) was increased to a ~16% position. Since inception (1982), Baupost Group’s US long portfolio has accounted for between 2.4% to 15% of the Assets Under Management (AUM). The current allocation is at the high-end of that range. The rest of the AUM is diversified among cash, debt, real estate, and hedges. The fund continues to hold well over a quarter of the AUM in cash. The number of holdings in the US long portfolio remained at 21 this quarter.New Stakes:Micron Technology (MU): MU is huge 14.79% of the US long portfolio position established this quarter at prices between $9.10 and $14. The stock currently trades outside that range at $14.90. The stake establishment indicates a clear bullish bias. But, investors attempting to follow Klarman will have to wait for a better entry point.ChipMOS Technologies (IMOS): IMOS is a small 1.33% of the US long portfolio position established this quarter at prices between $12.30 and $20. The stock currently trades at around $17. The minor stake establishment indicates a mild bullish bias.Yamana Gold (AUY), Kinross Gold (KGC), & Pretium Resources (PVG): These are very small positions in the gold-mining sector established this quarter. Combined, they account for about 1% of the US long portfolio. The minor stake establishment does not indicate a clear bias. However, this allocation is a significant shift as his earlier allocations in the area were focused on the junior gold mining space.Stake Disposals:Directv (DTV): DTV was a minute 0.38% position established last quarter at prices between $47 and $57. The position was disposed of this quarter at prices between $54 and $65. The quick turnaround of a very small position does not indicate a clear bias.Elan PLC (ELN): ELN is a 3.46% position established last quarter at prices between $10 and $12 and disposed of this quarter at prices between $11.50 and $14.15. This was an opportunistic buy for Klarman as it was known that the company might get sold. On July 29, 2013 Perrigo Company (PRGO) agreed to acquire ELN at ~$16.50 per share.News Corp Class B (NWS): News Corporation was Klarman’s largest 13F position as of Q4 2012, with the Class A (NWSA) and Class B (NWS) shares together accounting for almost 17% of the portfolio. In Q1 2013, the position was reduced substantially and was eliminated this quarter. NWS is a long-term holding and Klarman’s cost-basis was very low. During a , Klarman indicated that the breakup value of News Corp in a distressed environment is over $20 per share and in a normal environment should be between $20 and $30. The stock was trading in the $5 range when he made those comments in March 2009. Klarman harvested the gains as the stock traded past his valuation range. On June 28, 2013 News Corp split into two: the publishing division that retained the News Corp name and the movie and TV division which was named Twenty-First Century Fox (FOX) (FOXA).Microsoft Corporation (MSFT) CALLs: MSFT calls were a 1.72% of the US long portfolio established in Q4 2012 and disposed of this quarter. MSFT traded between $26.60 and $31.50 in Q4 2012 and between $28.50 and $36.50 in Q2 2013. The stake disposal indicates a mild bearish bias.Stake Increases:BP PLC (BP): BP is Klarman’s second largest 13F position and represents 19.30% of the US long portfolio. The position was increased by around 60% last quarter at prices between $40 and $45 and marginally this quarter at prices between $40 and $44. The huge stake build-up over the last year has been at prices between $36 and $49. The stock currently trades within that range at $41.50. The large position size indicates a clear bullish bias. For investors attempting to follow Klarman, BP is a very good option to consider.Idenix Pharmaceuticals (IDIX): IDIX is a 2.40% of the US long portfolio stake that was built-up over several quarters starting in Q2 2011. It is a very volatile stock and the price fluctuated between $3.5 and $15 during the period of the stake acquisition. The last two quarters saw a stake doubling at prices between $3.20 and $5.40. This quarter, the position was increased marginally at prices between $3.33 and $5.40. The stock currently trades at $4.34. The significant stake increase over several quarters in the face of falling prices indicates a clear bullish bias. For investors attempting to follow Klarman, IDIX is a good option to consider.Citigroup WTS (C.WS.A): The warrants have a strike price of $106.10 and expire on 01/04/2019. They currently trade at $8 (for ten warrants which can be converted to one Citigroup common stock). The bulk of the 1.84% position was established at prices between $4.50 and $5.80. It is a leveraged bullish bet on Citigroup that would pay off handsomely, if Citigroup common stock trades well above the strike price before expiry.Theravance Inc (THRX): THRX is a large 15.84% of the US long portfolio position that was increased by over 20% this quarter at prices between $22.50 and $42. It currently trades at around $37. It is a very long-term position that has been in the portfolio since 2008. The stock is up around 75% YTD - the price spiked in May following a $1B royalty deal with Elan PLC.Stake Decreases:American International Group (AIG): AIG is a large 11.55% position established in Q4 2012 at prices between $30.68 and $37.21. The position size was increased by close to 80% last quarter at prices between $35 and $40. This quarter saw a turnaround, as the position was trimmed by 15% at prices between $37.50 and $46. The stock currently trades at around $48.Rovi Corporation (ROVI): ROVI is a 3.50% of the US long portfolio stake established in Q3 2012 at prices between $10.01 and $19.14. The position was almost doubled last quarter at prices between $15.43 and $21.43. This quarter, the position was reduced by ~25% at prices between $20 and $26.50. The stock currently trades below that range at around $18.80. The stake reduction indicates a bearish bias.Aveo Pharmaceuticals Inc. (AVEO) and Central Pac Financial Corp. (CPF): AVEO and CPF are small positions, each accounting for less than 1% of the US long portfolio. They were both reduced substantially this quarter. The stake reduction indicates a mild bearish bias.Alliance One International (AOI): AOI is a very small position (0.72% of the US long portfolio) that was reduced marginally this quarter. As the position size is very small and the stake reduction was minor, the activity does not indicate a clear bias.The rest of the portfolio remained steady during the quarter:Viasat (VSAT): VSAT is currently Klarman’s largest US long position accounting for 19.54% of the portfolio. The position was increased marginally in Q3 2012 at prices between $33.85 and $40.85 and again in Q4 2012 at prices between $35 and $41. Since then, the position has been kept steady. The stock currently trades at over $68. Klarman first purchased VSAT in 2008 at much lower price-points but has consistently built the stake over the last five years. He is sitting on huge gains on the position. The stock has returned ~80% this year, but Klarman is continuing to hold on.Oracle Corporation (ORCL): ORCL is a 1.82% of the US long portfolio stake established in Q2 2012 when the price-per-share varied between $25.61 and $29.70. It was trimmed by around 15% in Q3 2012 at prices between $28.82 and $33.10 and by just over 22% in Q4 2012 at prices between $29.58 and $34. The position was reduced by another two-thirds last quarter at prices between $31.25 and $36.34 and kept steady this quarter. The stock currently trades at around $33.50. The activity signifies a clear bearish bias.Enzon Pharmaceuticals Inc. (ENZN) & Ituran Location and Control (ITRN): ENZN and ITRN are very small positions accounting for 0.38% and 0.44% of the US long portfolio respectively. They were both kept steady this quarter. As the position sizes are very small, the stakes do not represent a clear bias.Novagold Resources Inc (NG): NG is a 1.14% stake built up over several quarters last year at prices between $3.5 and $12. The position was increased by one-third in Q3 2012 at prices between $3.68 and $6.19 and marginally in Q4 2012 at prices between $4.19 and $5.60. The stock currently trades well below that range at around $2.90. Klarman is sitting tight in the face of a large price-drop on this position.Novacopper Inc. (NCQ), and Syneron Medical Ltd. (ELOS): These are minute positions, each accounting for less than 1% of the US long portfolio. They were kept steady this quarter and so do not indicate a clear bias.The spreadsheet below highlights changes to Klarman's US stock holdings in Q2 2013:"