Follow the Leader: Seth Klarman

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

As investors, we are always looking for an edge, and there are many to be found. One of the greatest edges we have as small, individual investors is that we don't have to disclose our positions in companies. This is not true for large institutional investors, who must report their holdings to the SEC each quarter. These filed reports, known as 13-F's, are required for funds with over $100 million under management. A look at some of these holdings allows us to follow in the footsteps of some of the best.

The Klarman Edge
Seth Klarman's Baupost has been a force since its beginnings over 25 years ago. From 1983 to 2008, the fund returned 16.5% a year, beating the S&P index by more than six percentage points each year. Klarman has become better known recently for his dour feelings on the state of the global economy. At a recent (and rare, for him) speech at The CFA Institute in Boston, he said, "I'm more worried about the world broadly than I've ever been in my whole career." Despite his morose feelings, though, Klarman is still investing a lot of money. So let's look at his top holdings as of March 31, and do some of our own research to see if they would fit in our own portfolios.

News Corp. (Nasdaq: NWSA  )
Rupert Murdoch's media conglomerate is best known for the Fox television network's broadcasting prowess. The company is the largest holding in Klarman's portfolio, and seems to be a peculiar pick as the broadcast industry has had its share of troubles. News Corp. is also the owner of troubled social networking site MySpace. Murdoch mentioned in a recent conference call that he is confident that the social networking site will be successful in the future. If it can provide any completion for Facebook, MySpace could become a strong area of growth for the company.

ViaSat (Nasdaq: VSAT  )
ViaSat works with the federal government as well as private businesses as a provider of satellite and wireless communications systems. The company works closely with government contractors such as Boeing (NYSE: BA  ) to provide defense solutions aligned with the needs of federal agencies with which the company also works. Clearly in a time of heightened security needs around the world, investing in defense looks like a strong bet.

Theravance (Nasdaq: THRX  )
Theravance is an innovative pharmaceutical company that focuses mainly on respiratory diseases, gastrointestinal disorders, and bacterial infections. What could drive the stock price in the coming months is a potential blockbuster drug to treat chronic obstructive pulmonary disorder (COPD). Theravance is working in a joint venture with GlaxoSmithKline (NYSE: GSK  ) to develop this drug.

Domtar (NYSE: UFS  )
Domtar is the world's second largest paper producer, beaten in size only by International Paper (NYSE: IP  ) . Domtar and its competitors have been able to increase paper prices, even with the recent slide in lumber prices. This has resulted in continued free cash flow growth for the company, which reinstated a $0.25 quarterly dividend earlier this year.

Breitburn Energy Partners (Nasdaq: BBEP  )
Breitburn Energy Partners is a master limited partnership (MLP), which offers investors the tax benefits of a partnership along with the ease of a publicly traded investment. The company develops natural gas and oil properties and produces oil and gas from those properties. Breitburn's shares have already increased by more than 60% this year, but investors can still take advantage of a dividend yield over 9%.

How often do you follow a guru's stock picks? Do you agree with Klarman's top picks? Let us know in the comment box below.

The Motley Fool is recommending 50 stocks in 50 days for its new "11 O'Clock Stock" series. For more information, click here. Then come back to every weekday at 11 a.m. ET for a brand new pick!

Andrew Bond owns no shares in the companies listed. The Fool owns shares of GlaxoSmithKline. Try any of our Foolish newsletters today, free for 30 days. The Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1265097, ~/Articles/ArticleHandler.aspx, 10/24/2016 11:33:22 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 hours ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 3:59 PM
BBEPQ $0.43 Down -0.04 -9.09%
BreitBurn Energy P… CAPS Rating: ****
FOXA $25.57 Down -0.26 -1.01%
Twenty-First Centu… CAPS Rating: ***
GSK $40.68 Down -0.45 -1.09%
GlaxoSmithKline CAPS Rating: ***
IP $46.71 Down -0.29 -0.62%
International Pape… CAPS Rating: ****
THRX.DL $0.00 Down +0.00 +0.00%
Theravance CAPS Rating: **
UFS $36.50 Down -0.14 -0.38%
Domtar CAPS Rating: *****
VSAT $72.78 Up +0.43 +0.59%
ViaSat CAPS Rating: **