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Seth Klarman Buys XPO Logistics, Exits 3 Positions in 2nd Quarter

CEO and portfolio manager of hedge fund Baupost Group, Seth Klarman (Trades, Portfolio), bought only one stock and closed three positions during the second quarter.

Baupost reported its portfolio update Wednesday, disclosing a new stake in XPO Logistics Inc. (NYSE:XPO) and substantial increases to existing holdings, such as Bristol-Myers Squibb Co. (NYSE:BMY), Liberty Global PLC (NASDAQ:LBTYA) and Nexstar Media Group Inc. (NASDAQ:NXST).

Klarman, who has been with Baupost since its founding in 1982, is an adherent of value investing and author of the out-of-print book, "Margin of Safety," which sells for four-digit figures. LCH Investments NV ranked him as the fifth most profitable hedge fund manager in 2018.

Klarman typically seeks securities that trade well below his estimate of intrinsic value and holds for the long term while he waits for their price to rise. The equity portfolio listed 30 stocks as of the end of June, with a value of $10.73 billion. Baupost manages about $27.4 billion in assets.

The portfolio is invested most heavily in consumer cyclical stocks, which represent 26.39% of holdings, followed by health care at 23% and technology at 15.74%.

Klarman's second-quarter buy, XPO Logistics, is a global transportation and logistics provider that fell 32% in stock price over the past year. Two of his sales, Celgene Corp. (NASDAQ:CELG) and The Walt Disney Co. (NYSE:DIS), Klarman had just purchased in the first quarter. He also exited Pioneer Natural Resources Co. (NYSE:PXD), a position he held since the third quarter of 2017.

New buys

XPO Logistics Inc. (NYSE:XPO)

Klarman purchased 1.5 million shares of XPO Logistics Inc., giving it 0.81% portfolio weight. The stock's second-quarter share price averaged $59.

XPO Logistics Inc. has a market cap of $6.03 billion; its shares were traded around $65.44 Wednesday with a price-earnings ratio of 22.40 and price-sales ratio of 0.47.

Adds

Bristol-Myers Squibb Co. (NYSE:BMY)

Klarman bought 9 million Bristol-Myers Squibb Co. shares, increasing the holding by 225% to 13 million shares. The holding represented 5.5% of the portfolio. The stock's second-quarter share price averaged $47.

Bristol-Myers Squibb Co. has a market cap of $74.66 billion; its shares were traded around $45.64 with a price-earnings ratio of 12.01 and price-sales ratio of 3.15. The trailing 12-month dividend yield of Bristol-Myers Squibb Co. is 3.57%. The forward dividend yield of Bristol-Myers Squibb Co. is 3.53%. Bristol-Myers Squibb Co. had annual average earnings growth of 18.40% over the past five years.

Liberty Global PLC (NASDAQ:LBTYA)

Klarman purchased 2,483,500 shares of Liberty Global PLC, increasing the position by 50.1% to 7,440,705 shares. The holding represented 1.87% of the portfolio. The stock's second-quarter share price averaged $26.

Liberty Global PLC has a market cap of $18.84 billion; its shares were traded around $26.08 Wednesday with a price-sales ratio of 1.70.

Nexstar Media Group Inc. (NASDAQ:NXST)

Klarman purchased 397,755 shares of Nexstar Media Group Inc., increasing the holding by 39.78% to 1,397,755 shares. The holding represented 1.32% of the portfolio. The stock's second-quarter share price averaged $107.

Nexstar Media Group Inc. has a market cap of $4.25 billion; its shares were traded around $92.08 with a price-earnings ratio of 11.64 and P/S ratio of 1.59. The trailing 12-month dividend yield of Nexstar Media Group Inc.is 1.87%. The forward dividend yield of Nexstar Media Group Inc. is 1.81%. Nexstar Media Group Inc. had annual average earnings growth of 27.9% over the past 10 years. GuruFocus rated Nexstar Media Group Inc. the business predictability rank of 4-star.

See Seth Klarman (Trades, Portfolio)'s portfolio here.

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This article first appeared on GuruFocus.