Renowned value investor Seth Klarman (Trades, Portfolio) has recently made a significant transaction in his portfolio. On August 4, 2023, Klarman reduced his stake 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 the financials of Garrett Motion Inc.
Details of the Transaction
On August 4, 2023, Seth Klarman (Trades, Portfolio) reduced his holdings in Garrett Motion Inc by 62.31%, selling off 9,900,000 shares at a trade price of $7.6 per share. This transaction had a -1.29% impact on Klarman's portfolio, leaving him with a total of 5,987,289 shares in the company. Despite the reduction, Garrett Motion Inc still holds a 0.79% position in Klarman's portfolio, representing 2.31% of the company's total shares.
Profile of Seth Klarman (Trades, Portfolio)
Seth Klarman (Trades, Portfolio) is a highly respected figure in the world of value investing. He is the Portfolio Manager of The Baupost Group, an investment partnership he founded in 1983. Klarman is a Cornell University economics graduate and holds an MBA from Harvard University. He is also the author of the $1,000 book "Margin of Safety," a guide to value investing. Klarman's investment philosophy is broad, encompassing traditional value stocks, distressed debt, liquidations, and foreign equities or bonds. He is known for his patient approach, often choosing to hold cash when investment opportunities are scarce. 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's total equity stands at $5.82 billion, with a strong focus on the Communication Services and Technology sectors.
Overview of Garrett Motion Inc
Garrett Motion Inc, based in Switzerland, is a leading provider of 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. Since its IPO on May 3, 2021, the company's stock has seen a 44.55% increase. As of August 9, 2023, the company's market capitalization stands at $2.06 billion, with a stock price of $7.95. However, with a PE percentage of 0.00, the company is currently at a loss. According to GuruFocus, the stock is a possible value trap, with a GF Value of 16.57 and a Price to GF Value of 0.48.
Analysis of Garrett Motion Inc's Financials
Garrett Motion Inc's financial strength is ranked 4/10, with a cash to debt ratio of 0.26. The company's interest coverage is 5.07, ranking it 594th. Its profitability rank is 7/10, with a return on assets (ROA) of 13.78% and a return on equity (ROE) of 10000.00%. The company's growth rank is 5/10, with a three-year revenue growth of 9.00% and a three-year EBITDA growth of 16.70%. However, the company's earnings growth over the same period is -43.30%.
Other Gurus' Investments in Garrett Motion Inc
Other notable gurus who hold shares in Garrett Motion Inc include Mario Gabelli (Trades, Portfolio) and Prem Watsa (Trades, Portfolio). The Baupost Group, led by Seth Klarman (Trades, Portfolio), holds the most shares in the company.
Conclusion
Seth Klarman (Trades, Portfolio)'s recent reduction in his stake in Garrett Motion Inc is a significant move that may have implications for other value investors. Despite the reduction, the company still holds a substantial position in Klarman's portfolio. With its strong market position and potential for growth, Garrett Motion Inc remains a company to watch in the future.
