- The position was increased 40.61%.
- The REIT’s shares have fallen around 40% so far this year.
The guru’s Boston-based hedge fund searches for value among a broad range of opportunities, including stocks, distressed debt, liquidations and foreign securities. With a long-term horizon, the renowned investor typically seeks securities trading well below his estimate of intrinsic value and waits for the price to rise. Baupost manages about $31.6 billion in assets.
Having reduced the stake for the past several quarters, GuruFocus Real-Time Picks, a Premium feature based on 13D, 13G and Form 4 filings, showed the guru picked up 7.45 million shares of the Boca Raton, Florida-based company on June 30, impacting the equity portfolio by 0.39%. The stock traded for an average price of $4.88 per share on the day of the transaction.
Klarman now holds 25.8 million shares total, accounting for 1.35% of the equity portfolio. GuruFocus data indicates the firm has lost an estimated 67.31% on the investment since establishing it in the third quarter of 2016.
Previously known as Colony Capital, the real estate investment trust, which owns, invests in and operates digital infrastructure like cell towers and data centers, has a $3.29 billion market cap; its shares were trading around $5 on Tuesday with a price-book ratio of 5.60 and a price-sales ratio of 2.58.
After posting a gain of nearly 80% in 2021, the stock has tumbled around 40% year to date.
The GF Score of 61 out of 100 also suggests the company has poor future performance potential. While it received high points for momentum and a middling rank for profitability, the grades for growth, financial strength and GF Value were low.
In early May, DigitalBridge released its financial results for the first quarter of 2022. It posted a net loss of $262 million, or 46 cents per share, on $257 million in revenue. Both figures improved from the prior-year quarter.
In a statement, CEO Marc Ganzi commented on the “great start to the year” as the company has already delivered on many of its key objectives.
“We’ve announced two important strategic transactions that accelerate and scale our high-performance investment management platform, putting us in a strong position to outperform our financial targets,” he said. “We also made great progress with new core, credit, and ventures investments that advance our progress towards building a full-stack digital infrastructure investor.”
On July 5, DigitalBridge’s board of directors announced a $200 million share repurchase program as well as plans for a reverse stock split, in which one Class A share will be issued in exchange for every four existing common equity shares. The split should occur during the third quarter.
The REIT’s second-quarter 2022 earnings are scheduled to be released on Aug. 4.
GuruFocus rated DigitalBridge’s financial strength 2 out of 10. In addition to debt-related ratios that are underperforming versus competitors as well as its own history, the Altman Z-Score of -0.38 warns the company could be at risk of bankruptcy if its liquidity does not improve.
The REIT’s profitability fared better with a 6 out of 10 rating. It was weighed down by negative margins and returns on equity, assets and capital that underperform a majority of industry peers. However, DigitalBridge also has a high Piotroski F-Score of 7 out of 9, meaning operating conditions are healthy. Despite recording a decline in revenue per share over the past several years, the company has a predictability rank of one out of five stars. According to GuruFocus research, companies with this rank return an average of 1.1% annually over a 10-year period.
Of the gurus invested in the company, Klarman has the largest stake with 3.94% of its outstanding shares. Chuck Akre (Trades, Portfolio)’s Akre Capital Management, Steven Cohen (Trades, Portfolio), Mario Gabelli (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) also have positions in DigitalBridge.
Klarman’s $9.27 billion equity portfolio, which was composed of 54 stocks as of the first quarter, was most heavily invested in the technology sector at 40.66%. He also had smaller holdings in the communication services (38.67%) and health care (5.34%) spaces.
According to the 13F filing for the three months ended March 31, Klarman’s five largest positions were Liberty Global
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.