"Tracking Seth Klarman’s Baupost Group Holdings – Q1 2014 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 05/14/2014. Please visit our  article for an idea on how his holdings have progressed over the years and our  highlighting the fund's moves during Q4 2013.Klarman’s US long portfolio increased ~17% from $3.53B to $4.14B this quarter. The very large position in Micron Technology established in Q2 2013 and increased by ~50% in the following quarter was kept steady - its allocation is still at a whopping 29.54% of the US long portfolio. The number of holdings is at 20 but five of them are very small positions that account for less than 0.5% of the US long portfolio each. The stakes are heavily concentrated with Micron Technology, Theravance Inc., and Viasat Inc. together accounting for almost two-thirds of the entire US long portfolio.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. Seth Klarman’s distinct investment style is elaborated in his 1991 book “”: the book is out-of-print and copies sell for a huge premium.New Stakes:Cheniere Energy (LNG): LNG is a large 7.57% of the US long portfolio position established this quarter at prices between $41 and $55. The stock currently trades at $59. The large stake establishment indicates a clear bullish bias.Keryx Biopharma (KERX): KERX is a medium-sized 2.60% of the US long portfolio position established this quarter at prices between $12.16 and $17.04. The stock currently trades at $12.84. A regulatory 13G filing on 05/09/2014 has disclosed that the position has been increased by around 50% to 9.15M shares (10.07% of the business).RF Microdevices (RFMD) & TriQuint Semi (TQNT): RFMD & TQNT are small ~1.25% of the US long portfolio position each established this quarter. The RFMD position was established at prices between $4.51 and $7.93 and the stock currently trades at $8.74. TQNT position was established at prices between $8.07 and $13.55 and the stock currently trades at $14.52.Stake Disposals:Fidelity National Financial (FNF): FNF was a small 1.82% of the US long portfolio position established last quarter at prices between $25.76 and $32.94. It was disposed of this quarter at prices between $29.78 and $33.22. The stock currently trades at $34.45.Rovi Corporation (ROVI): ROVI was a 1.21% of the US long portfolio stake that was reduced by 65% last quarter at prices between $16.47 and $19.80. It was eliminated this quarter at prices between $19.69 and $25.20. The selling first started in Q2 2013 when the position was reduced by ~25% at prices between $20 and $26.50. The original position was established in Q3 2012 at prices between $10.01 and $19.14. The stake was almost doubled in Q1 2013 at prices between $15.43 and $21.43. The stock currently trades at around $23.09. The activity indicates a bearish bias.Stake Increases:Idenix Pharmaceuticals (IDIX): IDIX is a large 7.32% 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 bulk of the position was purchased at prices between $2.93 and $5.93 since Q2 2012. Last quarter saw a ~25% stake increase at prices between $3.56 and $4.85. The activity this quarter consisted of a huge 16.42M stake increase at $6.50 per share on 02/04/2014 - Klarman now controls over one-third of the business. The significant stake increase over several quarters indicates a clear bullish bias.PBF Energy (PBF): PBF is a 3.38% of the US long portfolio position first purchased in Q3 2013 at prices between $21 and $26. It was more than doubled last quarter at prices between $21.44 and $31.46 and was increased by over 175% this quarter at prices between $23.79 and $31.46. The stock currently trades at $29.68. The significant stake build-up spanning several quarters indicates a bullish bias.Theravance Inc (THRX): THRX is a large 15.49% of the US long portfolio position that was increased by 12% in Q3 2013 at prices between $35.80 and $42.64. The stake was increased by over 20% in Q2 2013 as well at prices between $22.50 and $42. Last quarter saw a further ~9% stake increase at prices between $33.74 and $41.53. This quarter saw minor additional buying. The stock currently trades at around $28.86. THRX is a very long-term position that has been in the portfolio since 2008. Baupost controls around 18.22% of the businessTHRX is expected to split-up into two businesses in Q2 2014 - a royalty focused segment that will retain the name and a research focused biopharma segment that will trade under a new ticker TBPH.Viasat (VSAT): VSAT is currently Klarman’s second-largest US long position accounting for 19.02% of the portfolio. Since Q3 2012, the position has seen only minor stake increases. This quarter also saw a marginal increase. Klarman first purchased VSAT in 2008 at much lower prices and so his overall cost-basis is in the high-teens. The stock currently trades well above those ranges at around $59.37. He is sitting on huge gains on the position. The stock was up ~60% in 2013, but Klarman is continuing to hold on.Stake Decreases:BP PLC (BP): BP was Klarman’s second largest 13F position and represented 19.30% of the US long portfolio as of Q2 2013: the huge stake build-up from 2012 onwards happened at prices between $36 and $49. Q3 2013 saw an about-turn as Klarman reduced the position drastically to a 5.85% allocation at prices between $40.50 and $43.50. The stock currently trades at $50.43. The position was marginally increased last quarter but the selling resumed this quarter: a ~45% stake reduction at prices between $46 and $51. The position now stands at 3.68% of the US long portfolio. The activity indicates a clear bearish bias.Kindred Biosciences (KIN): KIN is a very small 1.24% of the US long portfolio position established last quarter at an average cost-basis of around $11. The stake as a percentage of the business is very high at over 17%: 2.8M shares out of the ~15M shares outstanding. The position was disclosed in a 13G filing on 01/09/2014 and that immediately aroused speculative interest that resulted in a huge price-spike. The stock currently trades at over $15.29. This quarter saw a marginal stake reduction.Kept Steady:ChipMOS Technologies (IMOS): IMOS is a small 1.75% of the US long portfolio position established in Q2 2013 at prices between $12.30 and $20 and increased by ~19% in Q3 2013 at prices between $15 and $21. The stock currently trades at around $22.55. Although the relative sizing of the position is small, it is significant that Klarman owns 9.84% of the shares outstanding.Alliance One International (AOI): AOI is a very small position (0.45% of the US long portfolio - 7.24% of the shares outstanding) that was reduced by ~17% in Q3 2013 and kept steady since. As the position size is very small, the activity does not indicate a clear bias.Citigroup WTS (C.WS.A): The warrants have a strike price of $106.10 and expire on 01/04/2019. They currently trade at $6.50 (for ten warrants which can be converted to one Citigroup common stock, Yahoo Ticker C-WTA). The position was increased by ~10% last quarter. The bulk of the 1.62% 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.Micron Technology (MU): MU is a huge 29.54% of the US long portfolio position established in Q2 2013 at prices between $9.10 and $14 and increased by just over 50% in Q3 2013 at prices between $12.55 and $17.60. The stock currently trades outside those ranges at around $26.86. Last quarter saw a ~20% stake reduction at prices between $16.55 and $23.14. Klarman is sitting on large short-term gains on the position.Novagold Resources Inc (NG): NG is a 1.89% stake built up over several quarters in 2012 at prices between $3.5 and $12. The most recent purchases happened in Q3 2012 and Q4 2012 when the stake was increased by roughly one-third at prices between $3.68 and $6.19. The stock currently trades at around $3.18.Syneron Medical Ltd. (ELOS): ELOS is a 1.20% of the US long portfolio position that has been kept steady since Q3 2011. It is a long-term position that has been in the portfolio since Q2 2006.Other very small positions (less than 0.5% of the US long portfolio each) in the portfolio are Alon USA Partners LP (ALDW), American International Group (AIG) warrants, Aveo Pharmaceuticals (AVEO), and Novacopper (NCQ). The spreadsheet below highlights changes to Klarman's US stock holdings in Q1 2014:"