Seth Klarman of Baupost Group manages a 13F portfolio worth more than $5.2 billion at the end of the fourth quarter of 2025. The top holdings in his equity portfolio are concentrated in the consumer cyclical, technology, and industrial sectors.
In May 2025, Klarman sat down for a conversation with Goldman Sachs President and COO John Waldron, discussing the ways in which his value-oriented investment philosophy was playing out in the stock market. During the talk, Klarman underlined the basic margin of safety as a principle that he had not deviated from, noting that it was simply the idea that you want room to be wrong. He also highlighted the need for investors to understand differentiation. He claimed that the only way to outperform was to be different, and the only way to invest well long-term was to be differentiated from the crowd. Klarman also reflected on how his 1991 book Margin of Safety remains the “calling card” for his strategy today.
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He explained that while the markets had changed—particularly with the rise of private equity and rapid technological shifts—the psychological guardrails he used had stayed the same. While explaining downside protection, he emphasized that the Baupost Group did not just “add up” a margin of safety as a number, but constantly asked how well-protected a portfolio was against “the elements of risk.” Structural guardrails within his fund, per the billionaire, avoided leveraging the portfolio and sought to diversify across countries and asset classes so they were not making a singular bet on one outcome. Perhaps the most famous remark from Klarman during this interview was regarding the difficulty of remaining disciplined when “comps” (market comparisons) were blowing with the wind, noting that value investors must have a higher tolerance for being “lonely” in their positions.
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Our Methodology
To compile our list of the best stocks to buy according to billionaire Seth Klarman, we reviewed the latest 13F filings of Baupost Group. Next, we focused on the top 15 stocks in his portfolio. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q4 2025 database of 1041 elite hedge funds.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Seth Klarman of Baupost Group
Best Stocks to Buy According to Billionaire Seth Klarman
15. Molina Healthcare, Inc. (NYSE:MOH)
Baupost Group’s Stake: $108 Million
Molina Healthcare, Inc. (NYSE:MOH) is a new addition to the 13F portfolio of Baupost Group. This holding comprises more than 620,000 shares. In early February, the company had released earnings for the fourth quarter of 2025, with the management projecting 2026 premium revenue of approximately $42 billion. This is slightly lower than 2025. The management expects Medicaid 2026 rates to average approximately 4% and will not offset the medical cost trend projected at 5%. The guidance assumes Marketplace premium will decline by 50% and that Medicare and Marketplace segments combined present a headwind of $1 per share in 2026.
Molina Healthcare, Inc. (NYSE:MOH) CEO Joseph Zubretsky, while speaking during the earnings call, highlighted a Medicaid contract win in Florida, stating that the contract in this regard was expected to yield $6 billion in annual run rate premium and was expected to go live late 2026. He also noted active engagement in RFPs representing an active pipeline of $50 billion of new opportunities over the next few years.
Molina Healthcare, Inc. (NYSE:MOH) provides managed healthcare services to low-income families and individuals under the Medicaid and Medicare programs and through the state insurance marketplaces in the United States.
