BOSTON (TheStreet) -- Seth Klarman, founder of Boston-based hedge fund Baupost Group, is followed closely because his investment philosophy is irreverent and his long-term performance is outstanding. The press-wary guru, who manages more than $20 billion, disclosed first-quarter holdings over the weekend. Klarman is a value investor.
Klarman's investment manual, Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor, only in publication briefly, now fetches thousands of dollars in the secondary market as his value investing insight is considered second-to-none.
Baupost held just 16 stocks as of March 31. It sold out of its position in Regeneron Pharmaceuticals (REGN), which has appreciated 62% in 2011 and 125% in 12 months, with, presumably, a hefty profit. Baupost decreased its position in four stocks: Enzon Pharmaceuticals (ENZN), CapitalSource (CSE), Breitburn Energy (BBEP) and Ituran Location (ITRN). It amplified its stakes in PDL BioPharma (PDLI) and AVEO Pharma (AVEO).
Klarman, who worked for famed investor Michael Price before founding Baupost in 1982, found two stocks in the bargain bin during the quarter, which he considers to be solid value investments: Allied Nevada Gold (ANV) and Sycamore Networks (SCMR).
His position in Allied Nevada, was substantial, worth $87 million and accounting for 4.9% of the portfolio. His stake in Sycamore, on the other hand, is modest, at $2.4 million, or just 0.1% of the portfolio. Still, Klarman vets all investment ideas thoroughly before purchasing, so it's possible he's still building a stake in Sycamore. His bet on Allied Nevada likely got off to a rocky start as its stock is down 15% in the past month, in part due to a commodities sell-off. Here's a look at these picks.
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