Gotta Buy Vivendi (ADR VIVHY)

Vivendi's annual report reveals Seth Klarman's Baupost Group owns 25.5 million shares in the company.  Klarman is one of the great value investors of all time.  While his forays into media, satellite and drug companies I don't understand, his investment in Vivendi seems logical enough.  The stock is cheap on a price-earnings, price-sales and price-dividend basis.

According the the annual report, earnings per share were 2.11 euros last year; dividends for 2011 are 1 euro.  Since shares are currently 12.90 euro, that's a 6x PE and a 7.8% yield.  The bulk of its business is telecom, but Vivendi also owns Universal music and Canal Group (a French cable company).  It also owns a 60% stake in Activision Blizzard (publishers of the best-selling Call of Duty videogame franchise).

On initial glance perhaps not a glamorous growth portfolio but definitely a stable of solid cash-cows selling at a very reasonable price.  If Klarman is in, then so am I.