In this article, we discuss the 10 top stock picks of billionaire Seth Klarman.

Seth Klarman of Baupost Group manages an equity portfolio worth more than $6.7 billion at the end of the second quarter of 2022. Klarman has made a name for himself at the stock market through an investing strategy that closely resembles the get-rich-slow stock picking techniques of legendary value investor Warren Buffett. Unlike Buffett, Klarman does not limit himself to value stocks, and has stakes in prominent growth names like Alphabet Inc. (NASDAQ:GOOG), Micron Technology, Inc. (NASDAQ:MU), and Intel Corporation (NASDAQ:INTC). 

As inflation continues to wreak havoc with stocks, Klarman has come under pressure to reduce his exposure to growth names. In a recent interview with Harvard Business School, the famous money manager, whose personal net worth is in excess of $1.5 billion, said that investors needed to learn as much from bear markets as they did during bull markets. Klarman said that investors today faced more uncertainty about macroeconomic forces, market volatility, and how technology was reshaping industries. 

The moves that Klarman has made at the market in recent months, revealed by the latest 13F filings of his hedge fund, illustrate his investing philosophy for a bear market. During the second quarter of 2022, the value of the equity portfolio of Baupost Group decreased by around $2.5 billion. In this period, Klarman made new purchases in just three stocks, sold out of 6, reduced holdings in 23, and made additional purchases in 4 stocks. The top ten holdings comprise over 68% of the overall portfolio. 

Our Methodology

The companies listed below were picked from the investment portfolio of Baupost Group at the end of the second quarter of 2022. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.

Top Stock Picks of Billionaire Seth Klarman

10. Veritiv Corporation (NYSE:VRTV)

Number of Hedge Fund Holders: 17  

Veritiv Corporation (NYSE:VRTV) operates as a business-to-business provider of value-added packaging products and services. Latest data shows that Baupost Group owned more than 2.5 million shares of Veritiv Corporation (NYSE:VRTV) at the end of the second quarter of 2022 worth over $386 million, representing 5.71% of the portfolio. 

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Veritiv Corporation (NYSE:VRTV), with 126,700 shares worth more than $13 million.

At the end of the second quarter of 2022, 17 hedge funds in the database of Insider Monkey held stakes worth $443 million in Veritiv Corporation (NYSE:VRTV), compared to 19 in the previous quarter worth $549 million.

Just like Alphabet Inc. (NASDAQ:GOOG), Micron Technology, Inc. (NASDAQ:MU), and Intel Corporation (NASDAQ:INTC), Veritiv Corporation (NYSE:VRTV)  is one of the stocks that hedge funds are monitoring. 

9. Viasat, Inc. (NASDAQ:VSAT)

Number of Hedge Fund Holders: 18    

Viasat, Inc. (NASDAQ:VSAT) provides broadband and communications products and services worldwide. Regulatory filings show that Baupost Group owned more than 16.2 million shares of Viasat, Inc. (NASDAQ:VSAT) at the end of June 2022 worth $498 million, representing 7.37% of the portfolio. 

In late May, investment advisory Raymond James maintained an Outperform rating on Viasat, Inc. (NASDAQ:VSAT) stock and lowered the price target to $51 from $58. Analyst Ric Prentiss issued the ratings update. 

At the end of the second quarter of 2022, 18 hedge funds in the database of Insider Monkey held stakes worth $714 million in Viasat, Inc. (NASDAQ:VSAT), compared to 17 in the previous quarter worth $1.2 billion.

Among the hedge funds being tracked by Insider Monkey, California-based investment firm FPR Partners is a leading shareholder in Viasat, Inc. (NASDAQ:VSAT), with 5 million shares worth more than $157 million.

In its Q2 2022 investor letter, Cove Street Capital, an asset management firm, highlighted a few stocks and Viasat, Inc. (NASDAQ:VSAT) was one of them. Here is what the fund said:

“Viasat, Inc. (NASDAQ:VSAT) seems to be either our biggest winner or loser every quarter – annoyingly. The much-delayed launch of the first of three next generational satellites will be at the end of this summer and that event should end this yo-yo in the stock and put us on a more sustainable path in the eyes of the world. Oh, and we think the defense business alone is worth nearly 2x the current price of the stock.”

8. New Oriental Education and Technology Group Inc. (NYSE:EDU)

Number of Hedge Fund Holders: 22  

New Oriental Education and Technology Group Inc. (NYSE:EDU) provides private educational services. Securities filings reveal that Baupost Group owned 8 million shares of New Oriental Education and Technology Group Inc. (NYSE:EDU) at the end of June 2022 worth $162 million, representing 2.40% of the portfolio. 

On July 29, Bank of America analyst Lucy Yu upgraded New Oriental Education and Technology Group Inc. (NYSE:EDU) to Buy from Neutral and raised the price target of $36.60 from $18.80, saying that the current share price was on par with the new cash of the firm.

At the end of the second quarter of 2022, 22 hedge funds in the database of Insider Monkey held stakes worth $721 million in New Oriental Education and Technology Group Inc. (NYSE:EDU), down from 23 in the preceding quarter worth $260 million. 

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Alkeon Capital Management is a leading shareholder in New Oriental Education and Technology Group Inc. (NYSE:EDU), with 7 million shares worth more than $145 million.

In its Q3 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and New Oriental Education and Technology Group Inc. (NYSE:EDU) was one of them. Here is what the fund said:

“The quarter’s leading detractors were Chinese companies that were impacted by the CCP’s regulatory crackdown and liquidity concerns at property developer Evergrande. New Oriental Education and Technology Group Inc. (NYSE:EDU)—the largest provider of private educational services in China—moved sharply lower in July after policymakers implemented new rules which effectively turned Chinese tutoring companies into non-profits. Looking at New Oriental Education, we closed our position as soon as government policy became clear and used the proceeds to allocate to existing holdings.”

7. Liberty Global plc (NASDAQ:LBTYA)

Number of Hedge Fund Holders: 28     

Liberty Global plc (NASDAQ:LBTYA) provides broadband internet, video, fixed-line telephony, and mobile communications services. The hedge fund of Seth Klarman entered the second quarter of 2022 with over 48 million shares of Liberty Global plc (NASDAQ:LBTYA) in the portfolio worth more than $1 billion, representing 15.8% of the portfolio. 

On July 14, Deutsche Bank analyst Robert Grindle maintained a Buy rating on Liberty Global plc (NASDAQ:LBTYA) stock and lowered the price target to $32 from $38, noting that a take-private option being considered by the firm would not be surprising. 

At the end of the second quarter of 2022, 28 hedge funds in the database of Insider Monkey held stakes worth $764 million in Liberty Global plc (NASDAQ:LBTYA), compared to 28 the preceding quarter worth $549 million.

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in Liberty Global plc (NASDAQ:LBTYA), with 39 million shares worth more than $827 million.

6. Qorvo, Inc. (NASDAQ:QRVO)

Number of Hedge Fund Holders: 30 

Qorvo, Inc. (NASDAQ:QRVO) develops and commercializes technologies and products for wireless, wired, and power markets. According to the latest filings, Baupost Group owned over 6.9 million shares of Qorvo, Inc. (NASDAQ:QRVO) at the end of the second quarter of 2022 worth $657 million, representing 9.70% of the portfolio. 

On September 13, Exane BNP Paribas analyst Karl Ackerman initiated coverage of Qorvo, Inc. (NASDAQ:QRVO) stock with a Neutral rating and a price target of $100, noting that the investor sentiment around the shares remained poor. 

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Select Equity Group is a leading shareholder in Qorvo, Inc. (NASDAQ:QRVO), with 725,114 shares worth more than $70 billion. 

At the end of the second quarter of 2022, 30 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in Liberty Global plc (NASDAQ:LBTYA), compared to 33 the preceding quarter worth $1.5 billion.

In addition to Alphabet Inc. (NASDAQ:GOOG), Micron Technology, Inc. (NASDAQ:MU), and Intel Corporation (NASDAQ:INTC), Qorvo, Inc. (NASDAQ:QRVO) is one of the stocks on the radar of elite investors. 

In its Q1 2022 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and Qorvo, Inc. (NASDAQ:QRVO) was one of them. Here is what the fund said:

“Qorvo, Inc. (NASDAQ:QRVO) is one of the two major providers of radio frequency RF systems which are critical components of mobile devices including smart phones and the Internet of Things (IoT). Two transitory concerns have recently affected the company’s stock price. First, supply chain issues continue to be a constraint. Second, Apple recently announced its decision to decrease production of its iPhone SE model. Neither of these issues threatens their long-term competitive position. Qorvo’s value is stable and despite the recent pressure on the stock price, we feel its long-term prospects are promising.”

5. Dropbox, Inc. (NASDAQ:DBX)

Number of Hedge Fund Holders: 32 

Dropbox, Inc. (NASDAQ:DBX) provides a content collaboration platform worldwide. Latest data shows that Baupost Group owned more than 7.8 million shares of Dropbox, Inc. (NASDAQ:DBX) at the end of the second quarter of 2022 worth over $164 million, representing 2.42% of the portfolio.  

On September 12, KeyBanc analyst Thomas Blakey initiated coverage of Dropbox, Inc. (NASDAQ:DBX) stock with an Overweight rating and a $30 price target, highlighting that workflow and add-on services were likely to decrease churn for the firm. 

Among the hedge funds being tracked by Insider Monkey, New York-based firm Renaissance Technologies is a leading shareholder in Dropbox, Inc. (NASDAQ:DBX), with 9.6 million shares worth more than $201 million. 

In its Q2 2022 investor letter, Arch Capital, an asset management firm, highlighted a few stocks and Dropbox, Inc. (NASDAQ:DBX) was one of them. Here is what the fund said:

“In March, we decided to buy Dropbox, Inc. (NASDAQ:DBX) with some of our cash position. We had sold the stock in 2021 due solely to valuation concerns, but with the stock cratering in early 2022, we decided to revisit the company. It turns out, the business was still as strong as ever. If you want more detail on why we like Dropbox, you can read our report from back in Q1 here.”

4. Fiserv, Inc. (NASDAQ:FISV)

Number of Hedge Fund Holders: 59   

Fiserv, Inc. (NASDAQ:FISV) provides payment and financial services technology worldwide. Regulatory filings show that Baupost Group owned more than 3.5 million shares of Fiserv, Inc. (NASDAQ:FISV) at the end of June 2022 2022 worth $314 million, representing 4.64% of the portfolio.  

On August 11, Evercore ISI analyst David Togut upgraded Fiserv, Inc. (NASDAQ:FISV) stock to Outperform from in Line with a price target of $149, up from $101, noting that the firm was embracing a new growth playbook. 

At the end of the second quarter of 2022, 59 hedge funds in the database of Insider Monkey held stakes worth $3.7 billion in Fiserv, Inc. (NASDAQ:FISV), down from 58 in the preceding quarter worth $3.9 billion. 

In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Fiserv, Inc. (NASDAQ:FISV) was one of them. Here is what the fund said:

“While the threat of disruption risk to these established payment companies should not be taken lightly, it is important to note that many of these emerging disruptors are small relative to the massive global payments network and heavily reliant on the very payment infrastructure they are trying to disrupt. This led us to initiate a position in Fiserv, Inc. (NASDAQ:FISV), whose stock dropped to a level that embedded projections for negative long-term growth despite no current evidence of disruption. We think Fiserv will continue to grow despite perceived disruption risks given its scale and efficiency. Fiserv also owns cloud-based payments hardware and software system Clover, which is both bigger and faster growing than Square; this provides an additional degree of protection against further disruption risk.”

3. Intel Corporation (NASDAQ:INTC)

Number of Hedge Fund Holders: 65    

Intel Corporation (NASDAQ:INTC) engages in the design, manufacture, and sale of computer products and technologies. Securities filings reveal that Baupost Group owned over 8.7 million shares of Intel Corporation (NASDAQ:INTC) at the end of June 2022 worth $326 million, representing 4.82% of the portfolio. 

On September 07, Stifel analyst Ruben Roy initiated coverage of Intel Corporation (NASDAQ:INTC) with a Hold rating and a $32 price target, adding that the turn-around strategy of the firm was still in the early innings. 

Among the hedge funds being tracked by Insider Monkey, London-based investment firm Generation Investment Management is a leading shareholder in Intel Corporation (NASDAQ:INTC), with 14 million shares worth more than $552 million. 

In its Q2 2022 investor letter, Baron Funds an asset management firm, highlighted a few stocks and Intel Corporation (NASDAQ:INTC) was one of them. Here is what the fund said:

“Then, there is the case of Intel Corporation (NASDAQ:INTC). A blue-chip tech champion with a market capitalization of over $500 billion in early 2000, the stock was trading at a P/E multiple of 42. It was a fast-growing company whose stock price and multiple declined more or less in line with its peers. However, unlike Google, Intel’s net income has grown from $7.3 billion in 1999 to $19.9 billion in 2021, a compounded annual growth rate of just 4.7%. Its growth from the dot com era has not proven to be durable, and Intel has yet to trade at the price it attained in 1999.”

2. Micron Technology, Inc. (NASDAQ:MU)

Number of Hedge Fund Holders: 69     

Micron Technology, Inc. (NASDAQ:MU) designs, manufactures, and sells memory and storage products worldwide. The hedge fund of Seth Klarman entered the second quarter of 2022 with over 2.7 million shares of Micron Technology, Inc. (NASDAQ:MU) in the portfolio worth more than $151 million, representing 2.23% of the portfolio. 

On September 13, Exane BNP Paribas analyst Karl Ackerman initiated coverage of Micron Technology, Inc. (NASDAQ:MU) stock with an Outperform rating and a $75 price target, noting that there was not much more downside risk to calendar 2023 EPS consensus. 

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Micron Technology, Inc. (NASDAQ:MU), with 9.9 million shares worth more than $515 million.  

In its Q3 2021 investor letter, Hazelton Capital Partners, an asset management firm, highlighted a few stocks and Micron Technology, Inc. (NASDAQ:MU) was one of them. Here is what the fund said:

“It’s hard to explain how shares of Micron Technology, Inc. (NASDAQ:MU), manufacture of DRAM and NAND semiconductor chips, can fall during a global chip shortage. In most industries, focusing on demand can give you a clear insight into what lays ahead for a company. Today, the memory and storage chip industry is no different. However, in the past, companies focused on market share led to the reckless build out of chip fabrication plants (FABs), oversupply, falling average selling prices (ASPs) of memory and storage chips, lower margins, and declining cash flows. As the industry consolidated – there are now just 3 major producers of DRAM and 5 on the NAND side – rational behavior among the key players began to take hold as competitors began focusing more on R&D. Currently, chip pricing remains cyclical although less so than in the past and that cyclicality has a long-term upward bias. The ongoing transition to newer and more robust platforms (3D 176-layer NAND & 1-Alpha node DRAM) has provided the memory and storage chip industry with improved supply capacity under its current manufacturing footprint, ultimately pressuring ASPs. Over the past three years, as most of the large platform conversions have already taken place, being able to add more bits per wafer has reached a saturation point. With no major FAB build outs planned in the near-term by competitors Samsung or SK Hynix, constrained supply and flattening cost curves should lead to durable and upward sloping ASPs once the recent volatility from the chip shortage subsides (…read more)

1. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 153     

Alphabet Inc. (NASDAQ:GOOG) provides various products and platforms such as Google Services and Google Cloud, etc. Latest data shows that Baupost Group owned more than 168,400 shares of Alphabet Inc. (NASDAQ:GOOG) at the end of the second quarter of 2022 worth over $369 million, representing 5.45% of the portfolio.  

On August 3, Tigress Financial analyst Ivan Feinseth maintained a Strong Buy rating on Alphabet Inc. (NASDAQ:GOOG) stock and raised the price target to $186 from $183, noting the resilience of the core cloud and search business of the firm despite misses on earnings. 

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel investment Group is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG), with 3.1 million shares worth more than $6.9 billion.

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) was one of them. Here is what the fund said:

“Alphabet Inc. (NASDAQ:GOOG) is the parent company of Google, the world’s largest search and online advertising company. Shares of Alphabet declined 21.6% in the quarter due to concerns about slower global growth impacting the company’s core advertising business. We retain conviction in Alphabet’s merits as it continues to benefit from growth in mobile and online video advertising, which accrues to its core assets of search, YouTube, and the Google ad network. We are further encouraged by Alphabet’s investments in Cloud, AI, and Autonomous Driving (through its Waymo subsidiary).” 

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Disclosure. None. 10 Top Stock Picks of Billionaire Seth Klarman is originally published on Insider Monkey.