Renowned value investor Seth Klarman (Trades, Portfolio) has recently made a significant addition to his portfolio. On July 13, 2023, Klarman acquired 21,139,372 shares in Garrett Motion Inc (GTX, Financial), a leading provider of engineered turbocharger and electric-boosting technologies. This article will delve into the details of this transaction, provide an overview of Klarman's investment philosophy, and analyze Garrett Motion Inc's stock performance and financial health.
Details of the Transaction
The transaction took place on July 13, 2023, with Klarman adding 18,064,372 shares to his holdings in Garrett Motion Inc. This represents a 587.46% change in shares and has an impact of 2.64% on his portfolio. The shares were purchased at a price of $7.44 each, bringing Klarman's total holdings in the company to 21,139,372 shares. This represents 2.26% of his portfolio and 7.96% of Garrett Motion Inc's total shares.
Profile of Seth Klarman (Trades, Portfolio)
Seth Klarman (Trades, Portfolio) is a highly respected figure in the investment world. He is the founder and portfolio manager of The Baupost Group, an investment partnership he established in 1983. Klarman is a graduate of Cornell University and Harvard University, and is the author of the $1,000 book "Margin of Safety". His investment philosophy is centered around value investing, with a focus on a wide array of investments ranging from traditional value stocks to more esoteric investments like distressed debt, liquidations, and foreign equities or bonds. Klarman currently holds 30 stocks in his portfolio, with a total equity of $5.82 billion. His top holdings include Alphabet Inc (GOOG, Financial), Liberty Global PLC (LBTYK, Financial), Qorvo Inc (QRVO, Financial), Viasat Inc (VSAT, Financial), and Veritiv Corp (VRTV, Financial). His portfolio is heavily weighted towards the Communication Services and Technology sectors.
Overview of Garrett Motion Inc
Garrett Motion Inc is a Switzerland-based company that designs, manufactures, and sells engineered turbocharger and electric-boosting technologies for light and commercial vehicle original equipment manufacturers (OEMs) and the vehicle independent aftermarket. The company also offers automotive software solutions. Garrett Motion Inc operates in a single segment and has a market cap of $1.98 billion. As of July 18, 2023, the company's stock price stands at $7.45, with a PE percentage of 10.35. According to GuruFocus's valuation, the stock is potentially a value trap, with a GF Value of 15.91 and a Price to GF Value ratio of 0.47.
Analysis of Garrett Motion Inc's Stock Performance
Since its IPO on May 3, 2021, Garrett Motion Inc's stock has gained 35.45%. However, the stock has seen a year-to-date decline of 5.7%. The company's GF Score stands at 57, indicating a poor future performance potential. The stock's ranks for balance sheet, profitability, growth, GF Value, and momentum are 5, 7, 5, 4, and 0 respectively. The stock's F Score is 6, and its Z Score is 1.40.
Financial Health of Garrett Motion Inc
Garrett Motion Inc's financial health is a mixed bag. The company's cash to debt ratio is 0.24, and its interest coverage stands at 5.37. The company's ROE is not applicable, but its ROA is 14.53. The company's gross margin and operating margin have both seen a decline of 5.00% and 5.10% respectively. Over the past three years, the company's revenue growth has been 3.60%, while its EBITDA growth has been 10.90%. The company's earning growth over the same period is not applicable.
Other Gurus' Involvement
Other notable investors who hold shares in Garrett Motion Inc include Mario Gabelli (Trades, Portfolio) and Prem Watsa (Trades, Portfolio). This suggests that the stock may have potential value that these seasoned investors have identified.
Conclusion
In conclusion, Seth Klarman (Trades, Portfolio)'s recent acquisition of shares in Garrett Motion Inc represents a significant addition to his portfolio. While the company's stock performance and financial health present a mixed picture, the involvement of other notable investors suggests potential value. As always, investors are advised to conduct their own thorough research before making investment decisions.
