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Mohnish Pabrai’s Investment Fund: Latest Portfolio (13F Filing Q1 2010)

(This post is part of our series on tracking hedge fund portfolios. If you’re unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund filings.)

Next up in our series is Mohnish Pabrai and his Pabrai Investment Fund. He is a value investor in the true sense of the word and has followed in the footsteps of Warren Buffett in numerous ways. Firstly, his fund is structured similarly to Buffett’s Partnerships where he charges no management fee and then no incentive fee until the fund gains at least 6%. Once Pabrai clears this hurdle, he charges a 25% incentive fee. Typical hedge funds charge a 2% management fee and a 20% performance incentive. Pabrai has in the past won an auction for lunch with Warren Buffett as well.

For 2009, Pabrai’s funds performed well after having a poor 2008. Last year, his PIF2 finished up 122.5%, PIF3 up 125%, and PIF4 up 118.8% as noted in our hedge fund performance numbers post. Pabrai recently presented at the Value Investing Congress and you can read in-depth notes from the event here.

The positions listed below were their long equity, note, and options holdings as of March 31st, 2010 as filed with the SEC. All holdings are common stock unless otherwise denoted:

Brand New Positions
International Coal Group (ICO)

Increased Positions
Fairfax Financial Holdings (FFH): Increased position by 0.34%
Terex (TEX): Increased by 0.02%

Reduced Positions
Teck Resources (TCK): Reduced position by 99.5%
Harvest Natural Resources (HNR): Reduced by 14.74%
Potash (POT): Reduced by 2.03%
Pinnacle Airlines (PNCL): Reduced by 0.25%
Air Transport Services Group (ATSG): Reduced by 0.24%
CapitalSource (CSE): Reduced by 0.18%
Berkshire Hathaway (BRK.B): Reduced by 0.02%

Positions They Sold Out of Completely
n/a

Pabrai’s Portfolio (by percentage of assets reported on 13F filing)

1. Potash (POT): 11.89%
2. Brookfield Properties (BPO): 10.89%
3. Harvest Natural Resources (HNR): 10.80%
4. Fairfax Financial (FRFHF): 9.28%
5. Berkshire Hathaway (BRK.B): 7.81%
6. Cresud (CRESY): 7.20%
7. Leucadia National (LUK): 5.90%
8. Goldman Sachs (GS): 5.68%
9. Air Transport Group (ATSG): 5.42%
10. Horsehead Holding (ZINC): 4.83%
11. CapitalSource (CSE): 4.72%
12. Pinnacle Airlines (PNCL): 4.48%
13. Terex (TEX): 3.62%
14. Wells Fargo (WFC): 3.50%
15. International Coal Group (ICO): 3.45%
16. Interactive Brokers (IBKR): 0.46%
17. Teck Resources (TCK): 0.07%

As you can see, Pabrai favors many natural resource type plays and has held some of them for quite some time. Potash (POT) is the most notable as it is his largest position. However, he has essentially sold completely out of Teck Resources (TCK), as he only has a tiny part of his position left. Pabrai also started a brand new stake in International Coal Group (ICO). Given that he is a true value investor, you won’t see as much turnover in his portfolio to begin with so that wraps up the major moves. For more on Pabrai, head to his recent insight at the Value Investing Congress.

Assets reported on the 13F filing were $332 million this quarter. Data from the SEC is aggregated and sorted automatically by Alphaclone, our source for hedge fund tracking, replicating, and performance backtesting (Market Folly readers can receive a special free 30 day trial). Remember that these filings are not representative of the hedge fund’s entire base of AUM.

This post is part of our daily hedge fund portfolio tracking series. We’ve already detailed activity from numerous managers so click the links below to be taken to the respective portfolio updates: Seth Klarman’s Baupost Group, Warren Buffett’s Berkshire Hathaway, Stephen Mandel’s Lone Pine Capital, and Bill Ackman’s Pershing Square, David Einhorn’s Greenlight Capital, Eddie Lampert’s RBS Partners, and David Tepper’s Appaloosa Management. Be sure to check back daily for new hedge fund updates.

David Tepper’s Appaloosa Management Trims Financials & Airlines, Buys Blue-Chip Health Stocks (13F Filing Q1 2010)

(This post is part of our series on tracking hedge fund portfolios. If you’re unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund filings.)

Next up in our coverage is David Tepper’s hedge fund Appaloosa Management. Tepper’s hedge fund focuses on companies that other people have thrown in the towel on and he takes concentrated positions in distressed debt and equity. This investment style was epitomized in the heart of the financial crisis when Tepper bought numerous financial stocks. This wager earned him billions and he gained a few spots on the Forbes billionaire list. He is from Pittsburgh and owns the NFL’s Pittsburgh Steelers. While Appaloosa won big with their financials bet, they were also one of the top hedge fund losers in 2008. Needless to say, it’s been a volatile past few years for Appaloosa. Previously, Tepper was a high yield bond trader for Goldman Sachs.

The positions listed below were their long equity, note, and options holdings as of March 31st, 2010 as filed with the SEC. All holdings are common stock unless otherwise denoted:

Brand New Positions
Pfizer (PFE)
Johnson & Johnson (JNJ)
Merck (MRK)
Valero Energy (VLO)
Yahoo (YHOO)
SuperMedia (SPMD)
Sunoco (SUN)
Tesoro (TSO)
Con-way (CNW)
YRC Worldwide (YRCW)
Continental Airlines (CAL)
Arkansas Best (ABFS)
American Commercial Lines (ACLI)

Increased Positions
Navistar International (NAV): Increased position by 293.6%
Goodyear Tire & Rubber (GT): Increased by 32.6%
Newcastle Investment Group (NCT): Increased by 17.9%
Willis Group Holdings (WSH): Increased by 15.6%
Hartford Financial (HIG): Increased by 5.4%

Reduced Positions
Office Depot (ODP): Reduced position by 81.1%
XL Capital (XL): Reduced by 73.5%
Valassis Communication (VCI): Reduced by 61%
Citigroup (C): Reduced by 54.8%
AMR Corp (AMR): Reduced by 44.04%
Delta Airlines (DAL): Reduced by 37.6%
SunTrust Banks (STI): Reduced by 35.7%
Fifth Third Bancorp (FITB): Reduced by 30.2%
E*Trade Financial (ETFC): Reduced by 28.9%
OfficeMax (OMX): Reduced by 27.6%
UAL Corp (UAUA): Reduced by 26.1%
BB&T (BBT): Reduced by 25.6%
Capital One Financial (COF): Reduced by 25.4%
CNO Financial (CNO): Reduced by 25%
Brunswick (BC): Reduced by 20.3%
Wells Fargo (WFC): Reduced by 18.5%
Microsoft (MSFT): Reduced by 18.5%
US Airways (LCC): Reduced by 13.2%
Gramercy Capital (GKK): Reduced by 11.9%
Strategic Hotels & Resorts (BEE): Reduced by 7.7%
Bank of America (BAC): Reduced by 5.9%
Maguire Properties (MPG): Reduced by 3.65%

Positions They Sold Out of Completely
Rite Aid (RAD)
Hospitality Properties Trust (HPT)

Top 15 Holdings (by percentage of assets reported on 13F filing)

1. Bank of America (BAC): 20.47%
2. Wells Fargo (WFC): 10.54%
3. Citigroup (C): 9.55%
4. Fifth Third Bancorp (FITB): 8.74%
5. Hartford Financial (HIG): 7.07%
6. SunTrust Banks (STI): 5.56%
7. Pfizer (PFE): 4.18%
8. Capital One (COF): 3.50%
9. Johnson & Johnson (JNJ): 3.13%
10. Microsoft (MSFT): 2.70%
11. Merck (MRK): 2.43%
12. Valero (VLO): 2.14%
13. Yahoo (YHOO): 1.96%
14. UAL Corp (UAUA): 1.66%
15. Willis Group Holdings (WSH): 1.64%

Back when we covered Appaloosa’s fourth quarter portfolio, we noted they were buying airlines. Well, this time around they were trimming those positions. While Tepper also trimmed positions in numerous financials, they are still some of his largest holdings. The top half of his portfolio looks pretty similar to last quarter, but take note that he sold over half his Citigroup (C) position and almost a third of his Fifth Third Bancorp (FITB) stake. Despite these sales, these positions are still some of his largest. We also highlight that Appaloosa sold 30% of their SunTrust Banks position and we mention this because we just saw Warren Buffett’s Berkshire Hathaway exit their STI stake completely.

Tepper also made a few notable buys in the first quarter of 2010 including Pfizer, Johnson & Johnson, and Merck. Obviously he’s playing the blue-chip health theme here that we’ve seen so many other hedge funds flock to as many of these companies are undervalued. Just yesterday we noted David Einhorn added to his PFE position as well. Lastly, Tepper also started a new stake in SuperMedia (SPMD), a company we recently saw John Paulson start a position in as well.

Assets reported on Appaloosa’s 13F filing were $2.6 billion this quarter. Data from the SEC is aggregated and sorted automatically by Alphaclone, our source for aggregating the hedge fund portfolio movements and backtesting the performance (Market Folly readers can receive a special free 30 day trial). Remember that these filings are not representative of the hedge fund’s entire base of AUM.

This post is part of our daily hedge fund portfolio tracking series. We’ve already detailed activity from numerous managers so click the links below to be taken to the respective portfolio updates: Seth Klarman’s Baupost Group, Warren Buffett’s Berkshire Hathaway, Stephen Mandel’s Lone Pine Capital, and Bill Ackman’s Pershing Square, David Einhorn’s Greenlight Capital, and Eddie Lampert’s RBS Partners. Be sure to check back daily for new hedge fund updates.

CPI declines 0.1%, Core CPI Flat

Eddie Lampert’s RBS Partners Portfolio: 13F Filing Q1 2010

(This post is part of our series on tracking hedge fund portfolios. If you’re unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund filings.)

Next up is RBS Partners, the parent company of Eddie Lampert’s hedge fund ESL Investments. Prior to forming ESL, Lampert worked with Robert Rubin at Goldman Sachs’ risk arbitrage department. Lampert graduated from Yale where he was a member of the skull and bones secret society, as well as Phi Beta Kappa. He runs highly concentrated portfolios and his focus has long been on the retail sector, most notably through his ownership of Sears Holdings (SHLD). He has graced Forbes’ billionaire list but was also one of the top hedge fund losers in 2008. In terms of recent investment activity, we saw that Lampert bought AutoNation (AN) shares and his Sears Holdings purchased Bill Ackman’s stake in Sears Canada. Our coverage of RBS also includes Lampert’s 2010 annual letter.

The positions listed below were their long equity, note, and options holdings as of March 31st, 2010 as filed with the SEC. All holdings are common stock unless otherwise denoted:

Brand New Positions
n/a

Increased Positions
n/a

Reduced Positions
Wells Fargo (WFC): Reduced position by 62.7%
SLM (SLM): Reduced by 62.1%
Acxiom (ACXM): Reduced by 60.1%
Genworth Financial (GNW): Reduced by 7.7%
Sears Holdings (SHLD): Reduced by 7%
Capital One (COF): Reduced by 4.91%
AutoZone (AZO): Reduced by 4.33%
AutoNation (AN): Reduced by 3.33%

Positions They Sold Out of Completely
Bank of America (BAC)

Eddie Lampert’s Entire Portfolio (by percentage of assets reported on 13F filing)

1. Sears Holdings (SHLD): 54.27%

2. AutoZone (AZO): 27.21%

3. AutoNation (AN): 11.36%

4. Capital One (COF): 3.09%

5. CIT Group (CIT): 1.44%

6. Genworth Financial (GNW): 1.21%

7. Citigroup (C): 1.03%

8. Acxiom (ACXM): 0.15%

9. Wells Fargo (WFC): 0.14%

10. SLM (SLM): 0.11%

Lampert obviously runs a highly concentrated portfolio so there’s not a lot to cover in terms of changes. We want to quickly point out that while it *appears* as if Lampert was trimming positions in Sears, AutoNation, and AutoZone, that’s not the case. As we detailed previously, Lampert was distributing these shares to some of his different investment vehicles as well as to investors in his funds.

Be advised that since this filing he has actually bought AN shares which we detailed in April. In terms of selling, Lampert actually sold over 60% of his stakes in Acxiom, SLM Corp, and Wells Fargo. He also sold entirely out of his small stake in Bank of America (BAC). Other than that, there’s not a whole lot to update you on.

Assets reported on RBS Partners’ 13F filing were $12.2 billion this quarter. Data from the SEC is aggregated and sorted automatically by Alphaclone, our source for hedge fund tracking, replicating, and performance backtesting (Market Folly readers can receive a special free 30 day trial). Remember that these filings are not representative of the hedge fund’s entire base of AUM.

This post is part of our daily hedge fund portfolio tracking series. We’ve already detailed activity from numerous managers so click the links below to be taken to the respective portfolio updates: Seth Klarman’s Baupost Group, Warren Buffett’s Berkshire Hathaway, Stephen Mandel’s Lone Pine Capital, and Bill Ackman’s Pershing Square, David Einhorn’s Greenlight Capital. Be sure to check back daily for new hedge fund updates.

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