We analyzed Baupost's holdings in its Q1 2012 13-F to identify its highest conviction bets, choosing the biggest buys and sells in size, exactly where the buy/sell is also a significant proportion of its prior quarter position in that company. Depending on that analysis, the following are its top rated 3 high conviction bullish moves (see Table):
News Corp. (NWSA): NWSA is an international diversified media and entertainment holding business, engaged in newspaper, magazine and book publishing, Television broadcasting, and film production and distribution. Baupost added a new $530 million in Q1, its largest invest in by far. Other leading institutions with big bullish bets on NWSA in Q1 incorporate New York-based mega fund Bank of New York Mellon Corp. adding five.7 million shares to its 26.5 million shares prior quarter position, and Boston-based mega fund MFS Investment Management adding two.9 million shares to its three.9 million shares prior quarter position.
The collapse in the share value from the January rally has in element been triggered by profit-taking, and also in component by an early-April announcement by Abbott Laboratories (ABT) of constructive outcomes from its hepatitis C trials that sent most rival hepatitis C drug developers down.
The following are Baupost's high conviction bearish picks, depending on its Q1 selling activity (see Table):
Microsoft Corp. (MSFT), that is the world's top software business, developing operating systems, business software and also other applications for servers, PCs and intelligent devices, in which it cut $157 million in Q1 from its $376 million prior quarter position;
Genworth Economic Inc. (GNW), a top U.S.-based international insurance firm offering life and long-term care insurance, annuities, asset management services and mortgage insurance worldwide, in which it cut out completely in Q1 its $58 million prior quarter position;
PDL Biopharma Inc. (PDLI), that develops treatments for cancer and immune disorders based on proprietary antibody humanization technology, in which it cut out completely in Q1 its $52 million prior quarter position;
Alere Inc. (ALR), that is a developer of patient diagnostic, monitoring and health management products and services focused in the areas of infectious disease, cardiology, oncology, toxicology, and women's health, in which it cut $36 million in Q1 from its $39 million prior quarter position; and
Targacept Inc. (TRGT), that is a development-stage biotech that discovers and develops NNR Therapeutics, a brand new class of drugs for the therapy of CNS illnesses and disorders, in which it cut out completely in Q1 its $28 million prior quarter position.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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