Howard Marks – Oaktree Capital Management – Q3 2024 top 10 portfolio holdings analysis

TRMD – Torm Plc
Portfolio Allocation: 26.03%
Recent Activity: Reduced 8.00%
Shares Held: 40,581,120
Reported Price: $34.07 per share
Value at Reported Price: $1,382,778,000

Torm Plc, a shipping company specializing in oil and product tankers, is the largest holding, even after a reduction in shares. This significant allocation reflects Marks’ confidence in the shipping industry’s long-term potential, driven by global demand for oil transportation.

EXE – Expand Energy Corp.
Portfolio Allocation: 10.64%
Recent Activity: No change reported
Shares Held: 6,870,884
Reported Price: $82.25 per share
Value at Reported Price: $565,130,000

Expand Energy Corp. remains a substantial position in the portfolio. As an energy company, EXE provides exposure to the energy sector, aligning with Oaktree’s focus on industries with steady demand. This position reflects a belief in the continued strength of energy markets.

GTX – Garrett Motion Inc.
Portfolio Allocation: 6.79%
Recent Activity: No change reported
Shares Held: 44,082,816
Reported Price: $8.18 per share
Value at Reported Price: $360,597,000

Garrett Motion, a global leader in turbocharging technology, is a significant holding. This company supplies automotive technology for improved fuel efficiency, reflecting Oaktree’s interest in innovation within the automotive industry and its focus on essential industrial components.

STR – Sitio Royalties Corp A
Portfolio Allocation: 5.07%
Recent Activity: No change reported
Shares Held: 12,935,120
Reported Price: $20.84 per share
Value at Reported Price: $269,568,000

Sitio Royalties Corp, a company focused on mineral and royalty interests, provides exposure to the energy and natural resources sectors. This holding aligns with Oaktree’s interest in alternative assets that generate steady income streams through royalty payments.

INFN – Infinera Corp.
Portfolio Allocation: 3.2%
Recent Activity: No change reported
Shares Held: 25,175,384
Reported Price: $6.75 per share
Value at Reported Price: $169,934,000

Infinera, a technology company specializing in optical networking, offers exposure to the telecommunications sector. This position reflects Oaktree’s interest in supporting the digital infrastructure required for data transmission, which is essential for the expanding digital economy.

AU – AngloGold Ashanti Ltd.
Portfolio Allocation: 2.84%
Recent Activity: Reduced 10.61%
Shares Held: 5,657,451
Reported Price: $26.63 per share
Value at Reported Price: $150,658,000

AngloGold Ashanti, a major gold mining company, provides diversification through precious metals. The reduction in shares suggests a cautious approach, possibly taking profits while maintaining exposure to gold as a hedge against market volatility.

SBLK – Star Bulk Carriers Corp.
Portfolio Allocation: 2.55%
Recent Activity: Reduced 28.30%
Shares Held: 5,712,206
Reported Price: $23.69 per share
Value at Reported Price: $135,322,000

Star Bulk Carriers, another shipping investment, indicates a diversified approach to the shipping industry. The reduction in shares might reflect profit-taking or rebalancing within the sector while still holding a meaningful position in maritime transport.

STKL – SunOpta Inc.
Portfolio Allocation: 2.49%
Recent Activity: No change reported
Shares Held: 20,726,126
Reported Price: $6.38 per share
Value at Reported Price: $132,165,000

SunOpta, a natural and organic food company, aligns with Oaktree’s interest in sustainable investments. This position reflects the foundation’s strategic focus on the growing demand for plant-based and health-conscious consumer products.

LBTYA – Liberty Global Ltd CL A
Portfolio Allocation: 2.37%
Recent Activity: Added 57.12%
Shares Held: 5,973,258
Reported Price: $21.11 per share
Value at Reported Price: $126,095,000

Liberty Global, a telecommunications company, saw a substantial increase in shares, indicating confidence in the telecommunications and media sectors. This addition reflects Oaktree’s interest in companies with strong regional positions in connectivity and media distribution.

TLN – Talen Energy Corp
Portfolio Allocation: 2.34%
Recent Activity: New Buy
Shares Held: 696,676
Reported Price: $178.24 per share
Value at Reported Price: $124,176,000

Talen Energy, an energy generation and infrastructure company, is a new addition. This investment suggests Oaktree’s ongoing commitment to the energy sector, particularly in infrastructure supporting power generation and distribution.

Analysis of Howard Marks’ Q3 2024 Portfolio Strategy

1. Significant Exposure to Shipping and Energy
The large positions in Torm Plc, Expand Energy Corp., and Star Bulk Carriers illustrate Oaktree’s focus on the shipping and energy sectors. These industries provide steady cash flows and align with Oaktree’s interest in assets with high demand and income-generating potential.

2. Strategic Additions in Telecommunications and Renewable Energy
The increase in Liberty Global and the new position in Talen Energy show a commitment to sectors that support digital infrastructure and renewable energy. These investments indicate Oaktree’s adaptation to long-term trends in connectivity and clean energy.

3. Selective Reductions and Profit-Taking
Reductions in AngloGold Ashanti and Star Bulk Carriers suggest a strategy of rebalancing or profit-taking, focusing on high-conviction investments while maintaining exposure to key sectors.

Conclusion
Howard Marks’ Q3 2024 portfolio for Oaktree Capital Management demonstrates a strong focus on shipping, energy, and telecommunications, with select additions in growth sectors like digital infrastructure and renewable energy. The portfolio’s structure reflects Oaktree’s preference for stable, income-generating assets and aligns with long-term trends in global infrastructure and sustainable energy solutions.