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Billionaire Seth Klarman’s Top Stock Picks: Pioneer Natural Resources (PXD) , ViaSat Inc. (VSAT), eBay Inc (EBAY)

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Seth Klarman’s Baupost Group has disclosed its equity portfolio for the reporting period of March 31 in a new 13F filing with the U.S. Securities and Exchange Commission. Baupost Group is one of the world’s largest hedge funds, with nearly $30 billion in assets under management. In 1982, Baupost was launched by professors at Harvard Business School, who then hired their former student Mr. Klarman to manage the fund. Klarman makes large and long-term investments in assets believed to be undervalued and his fund has posted solid returns over the last year, amounting to 30%. Baupost held stakes in 28 positions at the end of the first quarter, with the value of the portfolio standing at $5.95 billion. The five largest holdings of the fund are represented by Cheniere Energy Inc. (NYSEMKT:LNG), ViaSat Inc. (NASDAQ:VSAT), eBay Inc (NASDAQ:EBAY), Micron Technology Inc. (NASDAQ:MU), and Pioneer Natural Resources (NYSE:PXD).


We track the latest moves of more than 700 hedge funds because our research has shown that imitating a portfolio of the 15 most popular small-cap picks among these professional investors can generate an average return of nearly one percentage point in excess of the S&P 500 Total Return Index’s monthly return. Moreover, these picks generated an alpha of around 80 basis points per month. By comparison, the 50 most popular stocks among hedge funds overall (which are mostly large- and mega-cap companies) had a monthly alpha of six basis points and underperformed the market by around seven basis points per month. Our small-cap strategy has returned around 139% in the last 2.5+ years since we started tracking it in real time in August 2012, beating the S&P 500 ETF (SPY) by over 80 percentage points (read more details here).

Baupost’s top holding remains Cheniere Energy Inc. (NYSEMKT:LNG), in which the fund held 13.81 million shares at the end of the first quarter. The stake, which remained unchanged over the quarter, is valued at $1.07 billion. The company’s stock has performed well since May 2014, rising by 33.21%.Cheniere Energy Inc. (NYSEMKT:LNG) is engaged in LNG-related businesses, and it owns and operates the Sabine Pass LNG terminal and Creole Trail Pipeline in Louisiana. The company is building two terminals, which are set to provide it with major export opportunities. Cheniere Energy Inc. (NYSEMKT:LNG) saw a net loss of $267.7 million, or $1.18 per share, in the first quarter, compared to a net loss of $97.8 million, or $0.44 per share, in the same year-ago period. One of the largest stockholders of Cheniere Energy Inc. (NYSEMKT:LNG) is Andreas Halvorsen‘s Viking Global, owning 15.45 million shares as of the end of the first quarter.

The second favorite stock pick of Baupost is ViaSat Inc. (NASDAQ:VSAT), in which the fund held 11.53 million shares worth $687.49 million, as of the end of the first quarter. ViaSat Inc. (NASDAQ:VSAT) is engaged in making satellite and wireless networking applications and has a market cap of $2.95 billion, with the company’s shares dropping by 5.43% during the first three months of 2015. The company is banking on ViaSat-2, its next generation of high-capacity broadband satellite. The satellite is scheduled to be launched in the summer of 2016 with the help of Elon Musk’s SpaceX. It is designed to provide another leap ahead in broadband service quality for residential, mobile, and enterprise satellite services. Another large investor of the company is FPR Partners, led by Bob Peck and Andy Raab, which held 4.71 million ViaSat Inc. (NASDAQ:VSAT) shares as of the end of the first quarter.

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