In this article, we discuss the 10 Best Stocks To Buy According to Billionaire Seth Klarman.
Billionaire investor and Baupost Group’s CEO, Seth Klarman, has been a proponent of value investing since 1991. In recent interviews, he mentioned starting his career by following the exact principles taught by Ben Graham and later Warren Buffett. While his approach has evolved through years of personal investing, he still stands by the concept of the margin of safety. This suggests that a big discount in value investing offers a margin of safety that protects investors even if their assumptions miss the mark. The value of Baupost’s 13F holdings is approximately $4.8 billion as of September 30, 2025.
Klarman primarily follows a bottom-up investing approach and believes bargains can be found even in expensive markets. He also believes that diversifying across asset classes, industries, and countries is key to creating a balanced portfolio that withstands market volatility. In his view, value investing is one of the safest ways to protect wealth and avoid a ‘blow up’. He points to Warren Buffett’s illustrious career, noting that he never endured a prolonged period of underperformance because he preserved capital and was patient with the markets.
Klarman’s views on disciplined investing are fundamental today, as markets remain dynamic. According to Goldman Sachs Asset Management’s 2026 investment outlook, artificial intelligence, central bank decisions, global trade, fiscal policy, and geopolitical risks are expected to keep the investment landscape complex yet dynamic. Proactive decision-making and diversified investment portfolios thus become very important. In the report, they highlighted that the global geopolitical and economic landscape is increasingly becoming multipolar, which, in their view, provides incremental opportunities. On the outlook for US equities, the report further stated:
“Substantial investment by well-resourced entities positions them to capitalize on transformative technologies and market dynamics. Our focus remains on companies exhibiting high gross margins, fortress balance sheets, and durable end markets. While some smaller counterparts may struggle for a competitive footing, we also see pockets of opportunity across the small and mid-cap segment.”
With that outlook in mind, let’s take a look at the 10 best stocks to buy according to Billionaire Seth Klarman.
Our Methodology
For this list, we used Baupost Group’s Q3 13F portfolio and selected the top 10 holdings. We included Seth Klarman’s stake value for each holding at the end of Q3 2025 and the overall hedge fund sentiment for these stocks as of Q3 2025. The list is arranged in ascending order based on Seth Klarman’s stake value in each position.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. Liberty Global Ltd. (NASDAQ:LBTYK)
Baupost Group’s Stake Value: $254,479,000
Number of Hedge Fund Holders: 32
Liberty Global Ltd. (NASDAQ:LBTYK) is one of the best stocks to buy according to Seth Klarman. As of December 12, the average price target for LBTYK suggests an upside of 22%; however, the Street high indicates an upside of 216%. According to the Q3 13F filings, Seth Klarman’s hedge fund owns 21.65 million Class C common shares of Liberty Global, valued at approximately $254.5 million and accounting for 5.31% of the total portfolio.
On December 4, analyst David Wright from BofA Securities assigned a Sell rating on Liberty Global Ltd. (NASDAQ:LBTYK), along with a price target of $13.90.
Previously, on November 25, Liberty Global stated that it had planned an investment in ElevenLabs, which is one of the top voice AI companies worldwide. Its expertise includes text-to-speech features in an AI platform that provides chat agents, voice output, and voiceovers.
This investment will enable ElevenLabs to scale its voice model worldwide, with support from partners including Salesforce, Bertelsmann, Just Eat, Klarna, and Synthesia. The investment is made through the company’s technology investment arm, Liberty Global Ventures, one of many prominent investors strengthening ElevenLabs’ growth trajectory.
A Partner at Liberty Global Ventures, Rebecca Hunt, commented regarding this planned investment:
“Voice is becoming the next major interface for technology, and ElevenLabs is defining what’s possible in this space. The investment continues our track record of providing early backing for transformational tech infrastructure companies; we are honoured to be backing this category-defining team.”
Liberty Global Ltd. (NASDAQ:LBTYK), established in 2004 and based in Bermuda, offers broadband internet, TV, mobile, and fixed-line phone services to both households and businesses.
9. Ferguson Enterprises Inc. (NYSE:FERG)
Baupost Group’s Stake Value: $259,502,000
Number of Hedge Fund Holders: 87
Ferguson Enterprises Inc. (NYSE:FERG) is one of the best stocks to buy according to Seth Klarman. As of December 12, the average price target for FERG suggests an upside of 17%; however, the Street high indicates an upside of 38%. Seth Klarman owns a $259.5 million stake in Ferguson Enterprises Inc. (NYSE:FERG) as of the third quarter of 2025, which represents 5.42% of the billionaire’s total holdings.
On December 2, Ryan Merkel, an analyst at William Blair, maintained a Buy recommendation on Ferguson Enterprises Inc. (NYSE:FERG). Merkel’s bullish call is based on multiple factors that have contributed to robust performance across large projects and plumbing. The analyst noted that while the HVAC and residential sectors warrant some degree of concern, the overall stance for 2026 was optimistic. This is due to FERG’s comparative advantage in megaprojects and contractor strategies.
Similarly, Ferguson received another Buy rating from Jefferies on December 2, and the firm lifted the price target on the shares from $268 to $289. According to Jefferies, the residential market is likely to remain slow, and the company will see customer activity drop in its branches. Historically, in-store foot traffic has had a modest linear relationship with sales revenue and volume at Ferguson. This could potentially affect the company’s revenue growth, which came in at 3.8% for the past year.
Online activity at fergusonhome.com has remained soft during the first quarter of fiscal 2026, down 25%, 39%, and 42% in August, September, and October, respectively. The investment firm believes that this could be due to the website’s rebranding, as well as weaker DIY demand. On the other hand, household HVAC numbers have taken a hit because of tough economic conditions and customers favoring repairs over swaps, which impacts short-term demand.
Consequently, Jefferies sees headwinds in terms of clearing out inventory throughout H1 of FY2026. Nevertheless, sell-through should remain healthy. FERG, despite these headwinds, has been reaping gains from initiatives prioritizing dual trade contractors, and this has helped the company outperform the market.
Ferguson Enterprises Inc. (NYSE:FERG) is a Virginia-based company that sells plumbing, HVAC, lighting, appliances, and water and wastewater products to both residential and commercial customers.
8. Dollar General Corporation (NYSE:DG)
Baupost Group’s Stake Value: $275,622,000
Number of Hedge Fund Holders: 54
Dollar General Corporation (NYSE:DG) is one of the best stocks to buy according to Seth Klarman. As of December 12, the average price target for DG suggests a downside of a meager 0.11%; however, the Street high indicates an upside of 21%. As of the third quarter of 2025, Klarman owns 2.6 million shares of Dollar General valued at $275.6 million.
On December 5, Truist Financial analyst Scot Ciccarelli maintained a Hold rating on Dollar General Corporation (NYSE:DG) and raised the price target to $129 from $120. The updated price target is attributed to the company’s Q3 financial results, which showed $10.65 billion in sales, up 2.5% and in line with market consensus. While sales met street expectations, DG’s EPS of $1.28 topped Truist’s $0.96 EPS estimate.
According to Truist, Dollar General’s strong earnings were driven by reduced shrink, larger markups, and modest advantage from hurricane-related buying. The investment firm noted that Dollar General’s sales growth has returned to its earlier 2-3% pace after headwinds in 2023 and 2024.
The company’s better margins this year have been driven by diminished inventory, SKU optimization initiatives, and lower shrinkage, as per Truist. The firm reiterated its Hold recommendation, regardless of the improved numbers, as it sees tough margin comparisons next year.
7. WESCO International, Inc. (NYSE:WCC)
Baupost Group’s Stake Value: $317,923,000
Number of Hedge Fund Holders: 49
WESCO International, Inc. (NYSE:WCC) is one of the best stocks to buy according to Seth Klarman. As of December 12, the average price target for WCC suggests an upside of 15%; however, the Street high indicates an upside of 17%. As per Baupost Group’s Q3 13F portfolio, the fund owns 1.5 million shares of WCC, amounting to nearly $318 million.
On December 9, Wolfe Research maintained an Outperform rating on Wesco and lifted the price target from $298 to $307, as reported by The Fly. The investment firm agreed that 2025 was a challenging time for the industry, and it is thus sensible to anticipate a small widening of growth in 2026. This modest growth next year will be supported by revenue traction in H2 2025 and slashed interest rates. Wolfe continues to endorse short-cycle rotation for a third straight year.
Previously, WESCO International, Inc. (NYSE:WCC) announced financial results for the third quarter of 2025 on October 30. Sales growth for Q3 stood at 12%. The company reported an 18% and 12% organic sales growth in Communications & Security Solutions (CSS) and Electrical & Electronic Solutions (EES) segments, respectively. Data center sales came in at $1.2 billion, up 60% year over year, marking a quarterly record. WCC’s Utility segment also demonstrated positive trends.
For the full-year 2025, the company raised its organic sales growth outlook to a range of 8%-9%, which is higher than its prior guidance of 5%-7%. WCC now forecasts adjusted EPS to range from $13.10 to $13.60.
WESCO International, Inc. (NYSE:WCC) is a Pennsylvania-based provider of business-to-business distribution, logistics, and supply chain services in the United States, Canada, and internationally.
6. Union Pacific Corporation (NYSE:UNP)
Baupost Group’s Stake Value: $353,658,000
Number of Hedge Fund Holders: 99
Union Pacific Corporation (NYSE:UNP) is one of the best stocks to buy according to Seth Klarman. As of December 12, the average price target for UNP suggests an upside of 9%; however, the Street high indicates an upside of 22%. As of the third quarter of 2025, billionaire Seth Klarman held nearly 1.5 million units of Union Pacific, worth $353.6 million.
On December 11, Richa Harnain, an analyst at Deutsche Bank, downgraded Union Pacific Corporation (NYSE: UNP) to Hold from Buy and lowered the price target to $245 from $272, according to TheFly. The analyst appeared disappointed by the underperformance of the company’s shares even after reporting two strong quarters. That makes her skeptical about performance if the company reports lower earnings beats and if UNP’s acquisition of Norfolk Southern faces further opposition. These uncertainties underpinned Richa’s downgrade of the stock.
Previously, on November 24, Union Pacific announced that it had signed a deal with the International Brotherhood of Boilermakers (IBB), which ensures the protection of unionized workers’ positions following the merger of UNP and Norfolk Southern. The IBB is the 4th national union to come to a major agreement with UNP, which protects workers of both companies when the merger takes place. The idea is to offer them stable employment for life, contingent on meeting standard employment conditions. The companies declared their intention to merge operations on November 14, and 99.5% of UNP shareholder votes supported the issuance of new common stock related to the Norfolk Southern merger.
Separately, on November 18, Union Pacific announced a $1.38 per-share dividend, payable on December 30, 2025, to shareholders of record as of December 5. The company pays quarterly dividends and has a rich dividend history dating back 126 consecutive years.
Union Pacific Corporation (NYSE:UNP) is one of the largest railroad operators in the United States. It transports a wide range of goods, including grain, food items, fertilizers, coal, and renewable products.
5. Willis Towers Watson Public Limited Company (NASDAQ:WTW)
Baupost Group’s Stake Value: $376,218,000
Number of Hedge Fund Holders: 39
Willis Towers Watson Public Limited Company (NASDAQ:WTW) is one of the best stocks to buy according to Seth Klarman. As of December 12, the average price target for WTW suggests an upside of 14%; however, the Street high indicates an upside of 23%. As of Q3 2025, billionaire Seth Klarman owns over 1 million shares of WTW, valued at $376.2 million.
On December 12, Wells Fargo analyst Elyse Greenspan, who maintains an Overweight rating on WTW, lowered her price target from $362 to $356, according to TheFly. The price target adjustment was due to the incorporation of around 10 cents of estimated EPS dilution from the Newfront Insurance Holdings acquisition. The analyst expects a marginal EPS accretion in 2027 from the deal.
On December 10, WTW and Cushon reported that they have settled on a deal under which WTW’s UK division will acquire Cushon from NatWest Group. Cushon provides smart, easy-to-use pension and savings solutions. This acquisition paves the way for WTW to gain market share and drive growth in the mid-sized British employee pensions and savings market.
As part of the acquisition, Willis Towers gains £4 billion in assets under management from Cushon, as well as 730,000 members. The deal includes a referral clause that allows NatWest’s commercial banking customers to refer their workers to Cushon’s workplace pensions and savings services. The transaction is awaiting regulatory clearance and is projected to close in the first half of 2026.
Willis Towers Watson Public Limited Company (NASDAQ:WTW) provides advisory and brokerage services through two business segments: Health, Wealth & Career and Risk & Broking.
4. CRH plc (NYSE:CRH)
Baupost Group’s Stake Value: $405,669,000
Number of Hedge Fund Holders: 102
CRH plc (NYSE:CRH) is one of the best stocks to buy according to Seth Klarman. As of December 12, the average price target for CRH suggests an upside of 10%; however, the Street high indicates an upside of 30%. According to Klarman’s 13F portfolio, he owns a $405.6 million stake in CRH as of the third quarter of 2025.
On December 1, Jefferies maintained its bullish stance on CRH, assigning the stock a Buy rating and a price target of $140. The firm noted that the company could possibly receive passive capital inflows in the next few months. Jefferies also pointed out that CRH may end up in the S&P 500 lineup. The firm predicts that entering the S&P 500 index could boost the purchase of CRH shares by 114.24 million units, which is equal to an average trading volume of 27 days.
Additionally, Jefferies highlighted CRH’s overall investment thesis, noting that it has made notable investments in US infrastructure, that European demand could start to bounce back, that higher pricing and margins are on the horizon in the US, and that potential M&A activity is underway.
CRH plc (NYSE:CRH) was founded in 1936 and is headquartered in Dublin. It provides building materials and construction solutions, including aggregates, cement, concrete, asphalt, precast elements, hardscape products, and engineered components.
3. Elevance Health, Inc. (NYSE:ELV)
Baupost Group’s Stake Value: $426,195,000
Number of Hedge Fund Holders: 82
Elevance Health, Inc. (NYSE:ELV) is one of the best stocks to buy according to Seth Klarman. As of December 12, the average price target for ELV suggests an upside of 10%; however, the Street high indicates an upside of 18%. According to Klarman’s 13F portfolio, the billionaire holds a $426 million stake in Elevance Health as of Q3 2025.
On November 26, TD Cowen analyst Ryan Langston reiterated a Buy recommendation on Elevance Health and raised the target price from $380 to $400. The firm named the company as its “Best Idea for 2026”, although it added that its managed care segment is still a difficult sector to navigate.
The investment firm added that ELV’s 2026 EPS estimates support a growth outlook. TD Cowen lifted the EPS estimate to $27.25. The higher price target indicates a 12.7x multiple of TD Cowen’s 2027 EPS projection for Elevance.
The firm observed that Elevance Health has “a more balanced risk/reward” profile than other managed care companies because of the comparatively stable group health plan, cuts to Medicare Advantage benefits, and careful Medicaid-related estimates.
Separately, the company had announced its Q3 2025 financial results in late October. Elevance Health’s operating revenue was $50.1 billion for the quarter, a 12% year-over-year increase. Q3 diluted EPS stood at $5.32, and adjusted diluted EPS was $6.03. The quarter saw robust growth in premiums, as well as higher net investment income and product revenues. However, the positive impact was partially offset by a decline in overall medical enrollment due to Medicaid re-verification and rising cost pressures.
Elevance Health, Inc. (NYSE:ELV) is an American healthcare company that provides insurance coverage for individuals, employers, Medicare, Medicaid, and federal employees.
2. Alphabet Inc. (NASDAQ:GOOGL)
Baupost Group’s Stake Value: $452,550,000
Number of Hedge Fund Holders: 243
Alphabet Inc. (NASDAQ:GOOGL) is one of the best stocks to buy according to Seth Klarman. As of December 12, the average price target for GOOGL suggests an upside of 7%; however, the Street high indicates an upside of 40%. As of the third quarter of 2025, billionaire Seth Klarman holds 1.85 million shares of Alphabet valued at $452.5 million.
On December 5, The Fly reported that Truist analyst Youssef Squali maintained a Buy rating on Alphabet and increased the price target from $320 to $350. The analyst informed investors that this holiday season would be a record time for American e-commerce and ad spend, because consumer spending remains robust, driven by strong employment numbers and targeted AI-based advertising. Moreover, third-party data points to a strong early kickoff to holiday spending this quarter. Truist mentioned that the higher price target is thus attributed to larger ad revenues, ongoing e-commerce trends for the holidays, and, to a limited degree, growth in future revenue assumptions for Other Bets as Waymo accelerates its entry into more cities.
Separately, Alphabet delivered a record third quarter, with Q3 results showing consolidated revenue of $102.3 billion, up 16% year over year. The company achieved double-digit growth across every primary business segment. Sundar Pichai, the CEO of Alphabet and Google, commented:
“Our full stack approach to AI is delivering strong momentum and we’re shipping at speed, including the global rollout of AI Overviews and AI Mode in Search in record time. In addition to topping leaderboards, our first party models, like Gemini, now process 7 billion tokens per minute, via direct API use by our customers. The Gemini App now has over 650 million monthly active users. We continue to drive strong growth in new businesses. Google Cloud accelerated, ending the quarter with $155 billion in backlog. And we have over 300 million paid subscriptions led by Google One and YouTube Premium.”
1. Restaurant Brands International Inc. (NYSE:QSR)
Baupost Group’s Stake Value: $529,337,000
Number of Hedge Fund Holders: 33
Restaurant Brands International Inc. (NYSE:QSR) is one of the best stocks to buy according to Seth Klarman. As of December 12, the average price target for QSR suggests an upside of 10%; however, the Street high indicates an upside of 36%. It is the top holding in Seth Klarman’s portfolio, with a position worth $529.3 million.
On December 9, RBC Capital analyst Logan Reich maintained an Outperform rating on Restaurant Brands with a price target of $82, up from $77. The investment firm sees QSR as a ‘top idea’ among international franchised fast food names. The analyst told investors that Restaurant Brands was one of its best picks because improving momentum at Burger King US, further development, smarter growth-focused investments, and lower leverage are supporting the stock’s momentum.
Earlier, on December 2, analysts from Argus Research upgraded Restaurant Brands International Inc. (NYSE:QSR) to Buy from Hold with an $85 price target, according to TheFly. The analysts cited the company’s strong brands and its better-priced menus amid an inflationary environment as supporting earnings.
Separately, on November 10, the company announced it had entered into a joint venture with CPE, a Chinese alternative asset manager, to accelerate Burger King’s growth in China. This collaboration aims to expand the brand’s market presence to more than 4,000 outlets by 2035, up from its existing network of roughly 1,250.
Restaurant Brands International Inc. (NYSE:QSR) is a global fast food company that owns and franchises several food and coffee chains, including Tim Hortons, Burger King, Popeyes, and Firehouse Subs.
While we acknowledge the potential of QSR to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than QSR and that has 100x upside potential, check out our report about this cheapest AI stock.
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