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Klarman Invests in Frontier Communications, Sanchez Energy During Q2

Seth Klarman (Trades, Portfolio) of The Baupost Group runs a concentrated portfolio of 32 stocks; four of them were new holdings added during the second quarter, according to data reported by GuruFocus Real Time Picks.


Frontier Communications Corp (FTR) (FTRPR)

Klarman purchased 13,500,000 shares of Frontier Communications common stock for an average price of $5.94 per share, as well as 325,000 shares of the company's preferred stock under the ticker FTRPR for an average $100.30 per share.

Frontier provides communication services such as internet and telephone lines to rural areas in the U.S. The price of the common stock declined 17% over the last year, closing at $5.35 on Aug. 13 with a forward P/E ratio of 65.36.

Over the past five years, revenue declined by an annual rate of 6.8%, while EBITDA declined by 9.6%. In 2014, the operating margin was 17.18%, toward the low end of the company's history, but higher than the communications services industry median.

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1439562840423.png

Biotie Therapies Corp (BITI)

Klarman purchased 869,643 shares of Finnish drug development company Biotie Therapies for an average of $20.89 per share.

Biotie released its IPO on June 11, pricing shares at $14.88. The stock closed at $17.87 on Aug. 13. The company produces drugs for neurodegenerative and psychiatric disorders; one drug named Selincro is currently being rolled out across Europe to treat alcohol dependency.

For the trailing 12 months, Biotie had losses per share of $8.54. The graph below shows the company's EPS over time.

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1439565523299.png

Sanchez Energy Group (SN)

Klarman also bought 619,505 shares of Sanchez Energy, which traded for an average price of $12.09 during the quarter.

Sanchez Energy explores for and develops unconventional oil and natural gas resources. Its current focus is on the Eagle Ford Shale in South Texas. The stock plummeted 77% over the last year due to the current oil market, closing at $7.69 on Aug. 12.

For the trailing 12 months, Sanchez reported loss per share of $9.76.

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1439564603987.png

Jim Chanos (Trades, Portfolio) and Kyle Bass (Trades, Portfolio) also held stakes in Sanchez as of the first quarter.

View Seth Klarman's latest stock picks here. Not a Premium Member of GuruFocus? Try it free for 7 days.

This article first appeared on GuruFocus.

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