Top Buys and Sells of Baupost's Star Manager Seth Klarman
Healthcare sector: Buy Theravance Inc. (THRX) and Alere Inc. (ALR). Baupost sold $390 million of its prior quarter $1.01 billion position in the healthcare sector. It sold out of its prior quarter $45 million position in biotech Regeneron Pharmaceuticals (REGN). The position was opened in the mid-$20s in the summer of 2010, and it probably sold out in the $40 range last quarter, so this was just profit-taking. Furthermore, Baupost added to its prior quarter positions in biotech PDL Biopharma Inc. (PDLI) and Aveo Pharmaceuticals (AVEO); both positions were opened at the end of 2010, and are indicative of Baupost’s conviction in its buy decision. Furthermore, Baupost holds a large $315 million position in biotech Theravance Inc. (THRX) that was opened in the mid-teens in early 2008, and a $120 million position in Alere Inc. (ALR), a developer of diagnostic products in the areas of infectious disease, cardiology, oncology, drug abuse and women’s health, that was opened in the $30 range in the summer of 2010. THRX traded in the high-$20s last quarter and ALR traded in the $40 range last quarter, so Baupost continuing to hold these positions without any profit-taking is indicative of Baupost’s conviction in its hold decision. Baupost holds a 17.4% of the outstanding shares of THRX and it is a large conviction holding for it. Furthermore, ALR is projected to exhibit strong double-digit revenue and earnings growth going forward and trades at a very attractive forward 12 P/E, near the low-to-mid-end of its historic P/E range.
surf's up......crikey
