In this article, we discuss Billionaire Seth Klarman’s 10 Stock Picks with Huge Upside Potential.
Seth Klarman is a legendary name in the hedge fund space. He entered Wall Street straight out of college, where he worked as an analyst for Mutual Shares Corporation. Klarman then proceeded to Baupost Group, where he has been ever since. Like most hedge fund managers, Klarman has a set of principles that guide his investment decisions. Most of these principles were captured in a 1991 book titled “Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor.”
Klarman has established himself as the foremost proponent of value investing. In fact, this is the central theme of the 1991 book. He advocates for removing emotions from the investing process and seeing opportunities for what they are.
He writes: “Successful investors tend to be unemotional, allowing the greed and fear of others to play into their hands.”
Also: “There is nothing esoteric about value investing. It is simply the process of determining the value underlying a security and then buying it at a considerable discount from that value.”
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In an interview with the Harvard Business School, Klarman insisted that he is unwilling to abandon value investing for other approaches. He maintained that “value investing is intellectually elegant. You’re basically buying bargains. It also appeals because all the studies demonstrate that it works. People who chase growth, who chase highfliers, inevitably lose because they paid a premium price. They lose to the people who have more patience and more discipline.”
No wonder Baupost is one of the best-performing hedge funds in the world. The fund might have lagged behind giants like Third Point and Elliot in the 2015-2024 period but the ability to stay true to a decades-old strategy and still turn up gains is impressive. Last year, the fund culled approximately 20% of its investing team to try and steer the ship towards larger gains. To this, Klarman commented that “with a somewhat smaller investment team, we have increased the level of energy, focus, accountability, and collaboration.”
And these efforts are already bearing fruit. By December last year, the fund had gained 10%, the first double-digit return since 2021, according to Bloomberg. In other words, after 42 years in the game, Klarman is still able to turn his investment fortunes around. That is why it is prudent to see what stocks are in his portfolio, especially those with a huge upside potential.
Seth Klarman of Baupost Group
Our Methodology
For this list, we combed through Baupost Group’s Q4 2024 SEC 13F filings. We focused only on shares in companies and excluded interests in ETFs and options. From the result, we ranked the stocks in ascending order based on analyst price targets and selected the top 10 companies with the highest upside potential (as of April 29).
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Billionaire Seth Klarman’s 10 Stock Picks with Huge Upside Potential
10. CRH plc (NYSE:CRH)
Upside Potential as of April 29: 21.11%
Baupost Group’s Stake Value: $244,383,000
CRH plc (NYSE:CRH) is a provider of building materials and construction solutions. Core products include ready-mixed concrete, cement, aggregates, and asphalt. The company serves markets in construction, infrastructure, and building materials across the Americas, Europe, and Asia-Pacific regions.
In 2024, CRH plc’s (NYSE:CRH) total revenues grew by 2% to $35.6 billion, and net income increased by 15% to $3.5 billion. Adjusted EBITDA rose 12% to $6.9 billion, the company’s 11th consecutive year of margin expansion. The company’s net income margin came in at 9.9%, a 110 basis point improvement year-over-year. The company says the growth is the result of continued commercial excellence, operational efficiencies, and strategic acquisitions. CRH plc (NYSE:CRH) continues to expand its global footprint through strategic acquisitions. Notable recent acquisitions include a $2.1 billion purchase of cement and readymixed concrete assets in Texas and a majority stake in Adbri Ltd, a market leader in cement and aggregates in Australia.
Jim Mintern, company CEO, commented that the strength of their balance sheet has enabled them to “invest $5 billion in 40 value-accretive acquisitions while also returning $3 billion of cash to shareholders through dividends and share buybacks.” As such, the outlook for the business “remains positive, underpinned by favorable demand and positive pricing momentum.”
Nonetheless, on April 14, 2025, RBC Capital analyst Anthony Codling lowered the firm’s price target for CRH (NYSE:CRH) to $108 from $127. However, the analyst maintained an Outperform rating. The firm adjusted its model before the company’s Q1 results, incorporating Q1 2025 weather data and uncertainties in the US economic outlook, the analyst stated in a research report.
9. Alphabet Inc (NASDAQ:GOOGL)
Upside Potential as of April 29: 25.12%
Baupost Group’s Stake Value: $271,565,000
Alphabet Inc (NASDAQ:GOOG) is the parent company of Google, the world’s dominant internet search engine, as well as YouTube, Google Cloud, and other technology ventures. The company offers a search engine (Google), video platform (YouTube), email (Gmail), cloud computing (Google Cloud), and hardware like Pixel phones and Nest smart home devices.
In Q1 2025, Alphabet Inc (NASDAQ:GOOG) reported net income of $34.54 billion, the highest quarterly net income in the company’s history. Consolidated revenue increased by 12% year-over-year to $90.2 billion. The most outstanding highlight is an $8 billion unrealized gain from the company’s investment in SpaceX, which boosted its overall profitability for the quarter.
Alphabet Inc’s (NASDAQ:GOOG) AI initiatives continue to drive user engagement and revenue growth. AI Overviews in Search now reaches over 1.5 billion users per month. On the other hand, Gemini 2.5, the company’s most advanced AI model, is achieving performance breakthroughs. CEO Sundar Pichai highlighted that all 15 of Alphabet’s products, with over half a billion users, now incorporate Gemini models, demonstrating the company’s commitment to AI integration across its ecosystem. On April 25, 2025, Citi maintained a positive outlook on Alphabet (NASDAQ:GOOG). The analysts raised the company’s price target from $195 to $200 and maintained a Buy rating.
8. Solventum Corporation (NYSE:SOLV)
Upside Potential as of April 29: 25.37%
Baupost Group’s Stake Value: $95,543,000
Solventum Corporation (NYSE:SOLV) is a healthcare company that spun off from 3M Company (NYSE:MMM) on April 1, 2024. The company operates through several business segments, including MedSurg, Dental Solutions, and Health Information Systems. It provides medical and surgical supplies, dental equipment and materials, and healthcare information technology solutions to healthcare providers worldwide.
Solventum Corporation (NYSE:SOLV) reported positive sales growth in Q4 2024—increasing by 1.9% to $2.074 billion. For the full year 2024, the company delivered $8.254 billion in sales and $6.70 in adjusted earnings per share. The MedSurg and Dental Solutions segments were the primary drivers of organic sales growth.
The company recently announced the sale of its Purification & Filtration business. This marks a significant milestone in its portfolio optimization strategy. At its 2025 Investor Day, CEO Bryan Hanson outlined an ambitious long-range plan through 2028. The firm targets organic sales growth of 4-5%, operating margins between 23-25%, and EPS compound annual growth rate of 10% over the three years. Still, on this point, Solventum (NYSE:SOLV) is executing a three-phased transformation plan. It focuses on stabilizing the business, enhancing strategic focus, and optimizing its portfolio.
Analysts have given Solventum Corporation (NYSE:SOLV) an average rating of Hold and a 12-month median price target of $82.83, reflecting a 25.37% upside potential from the current price of $66.07 as of April 29.
7. WESCO International, Inc. (NYSE:WCC)
Upside Potential as of April 29: 30.94%
Baupost Group’s Stake Value: $259,799,000
WESCO International, Inc. (NYSE:WCC) provides business-to-business distribution, logistics services, and supply chain solutions. The company distributes electrical, industrial, communications, and security maintenance, repair, and operations (MRO) products. It serves customers in industrial, utility, commercial, institutional, and government markets across more than 50 countries worldwide.
WESCO International, Inc. (NYSE:WCC) returned to sales growth in Q4 2024. Net sales grew by 0.5% year-over-year to $5.5 billion, and organic sales increased by 2.4%. According to management, this growth came on the back of over 70% expansion in the company’s global Data Center business and 20% growth in Broadband Solutions. The company generated $21.8 billion in net sales for the full year 2024. The corporation is making significant progress on its enterprise-wide digitalization efforts and business transformation.
According to CEO John Engel, the company is more than halfway complete on its technology and capabilities build. This is expected to accelerate earnings growth through greater cross-selling, and expand margins through improved pricing and operating cost leverage. For 2025, management expects organic sales to grow 2.5% to 6.5%, operating margin to expand, and free cash flow between $600-800 million.
On March 17, 2025, KeyBanc Capital Markets adjusted its price target for WESCO International, Inc. (NYSE:WCC) to $205 from $245 while maintaining an Overweight rating. Despite this reduction, analyst Ken Newman remains optimistic about WESCO’s prospects, highlighting the company’s improving capital structure and attractive valuation compared to peers.
6. Viasat, Inc. (NASDAQ:VSAT)
Upside Potential as of April 29: 38.74%
Baupost Group’s Stake Value: $104,014,000
Viasat, Inc. (NASDAQ:VSAT) is a global communications company specializing in satellite and wireless technologies. It provides satellite internet, in-flight Wi-Fi, secure communications for governments, and connectivity solutions for maritime and residential customers. Analysts rate the stock as a Moderate Buy, with an average price target of $13.00, ranging from $10.00 to $19.00, reflecting a 38.74% rise from its last price of $9.44.
In FQ3 2025, Viasat, Inc. (NASDAQ:VSAT) reported $1.1 billion in revenue, which was flat year-over-year. The Defense and Advanced Technologies segment registered robust revenue growth of 20%, but was offset by declines in the Communication Services segment. Adjusted EBITDA came in at $393 million, a 3% increase compared to the same period last year. This improvement was driven by strong performance in aviation services, government satellite communications, space and mission systems, and tactical networking products.
Viasat, Inc. (NASDAQ:VSAT) continues to make significant progress in several growth areas. In aviation, the number of commercial in-flight connectivity aircraft in service grew approximately 13% year-over-year, while business jets grew about 18%. The company’s ViaSat-3 F1 satellite has already served over 10,000 flights, with reported speeds of up to 130 Mbps on commercial flights. The company is also pioneering direct-to-device (D2D) satellite connectivity. On April 23, 2025, it demonstrated the technology in Brazil using 3GPP NTN standards to connect smartphones directly via satellite without terrestrial infrastructure.
5. Liberty Global Ltd. (NASDAQ:LBTYK)
Upside Potential as of April 29: 39.86%
Baupost Group’s Stake Value: $518,423,000
Liberty Global Ltd. (NASDAQ:LBTYK) is a multinational telecommunications company that operates primarily in Europe. It provides broadband internet, mobile communications, and television services to residential customers, businesses, and organizations.
In Q4 2024, Liberty Global Ltd. (NASDAQ:LBTYK) reported solid financial performance across its operations. For the full year, the company generated approximately $22 billion in revenue and $8 billion in adjusted EBITDA across its four primary markets. The company has completed several strategic objectives, including spinning off Sunrise to Liberty Global shareholders in November 2024. This transaction delivered a $9 tax-free dividend on an $18 stock. Liberty Global (NASDAQ:LBTYK) is also making significant progress on its UK network company separation with proposals received from Tier 1 infrastructure investors.
The company is doubling down on its active capital management strategy. It repurchased about 10% of its shares in 2024, totaling approximately $700 million, and plans to purchase up to 10% of shares outstanding in 2025. Perhaps this is why this stock accounts for 15% of Seth Klarman’s public equities portfolio. Other institutional investors with substantial interest in the stock include Stifel Financial Corp, Blue Trust Inc., and Bank of New York Mellon Corp. All of these raised their position in the stock in the past quarter. Analysts hold a Moderate Buy opinion on Liberty Global Ltd. (NASDAQ:LBTYK), and their 12-month median price target points to a 39.86% upside from current levels as of April 29.
4. Liberty Broadband Corporation (NASDAQ:LBRDK)
Upside Potential as of April 29: 50.76%
Baupost Group’s Stake Value: $12,755,000
Liberty Broadband Corporation (NASDAQ:LBRDK) is a holding company with interests in various industries. The company has ownership stakes in Charter Communications, one of the largest cable operators in the U.S., and Skyhook, a provider of location technology and intelligence services.
In Q4 2024, Liberty Broadband (NASDAQ:LBRDK) reported that the fair value of its Charter investment was $15.5 billion. For the full year, the company’s GCI subsidiary grew revenue by 4% to $1.0 billion. It also generated $144 million in operating income and $362 million in adjusted OIBDA.
But despite the robust operational performance, the stock’s focus has largely shifted to the company’s pending corporate transactions that will reshape its structure. Nevertheless, the stock continues to soar, with year-to-date performance reaching 16.28% as of April 29. On March 31, 2025, Benchmark revised its price target on Liberty Broadband (NASDAQ:LBRDK) from $130 to $115 and kept a Buy rating.
3. Herbalife Ltd. (NYSE:HLF)
Upside Potential as of April 29: 57.42%
Baupost Group’s Stake Value: $50,848,000
Herbalife Ltd. (NYSE:HLF) is a global health and wellness company. It offers products like protein shakes, meal replacements, and nutritional supplements. The primary target includes people with a healthy and active lifestyle.
Herbalife (NYSE:HLF) posted net sales of $1.2 billion (down 0.6% year-over-year) in Q4 2024. Still, the figure was at the high end of its guidance range. For the full year 2024, net sales were $5.0 billion, down 1.4% compared to 2023 but up 1.2% on a constant currency basis. The company significantly improved its financial position, with Q4 adjusted EBITDA of $150.0 million exceeding guidance. Herbalife (NYSE:HLF) also reduced its total leverage ratio to 3.2x by the end of fiscal year 2024.
On April 25, 2025, the company welcomed Lynda Cloud to its Board of Directors. Cloud brings nearly 30 years of leadership experience in the education, technology, and health sectors. Her expertise in digital learning, consumer experience, and scalable education is expected to support Herbalife’s (NYSE:HLF) strategic priorities. On March 25, 2025, DA Davidson reaffirmed its Buy rating on Herbalife (NYSE:HLF) with a price target of $14.00. Analyst Linda Bolton Weiser highlighted the company’s potential for a turnaround, driven by the new CEO’s strategic initiatives.
2. Tamboran Resources Corporation (NYSE:TBN)
Upside Potential as of April 29: 66.48%
Baupost Group’s Stake Value: $11,982,000
Tamboran Resources Corporation (NYSE:TBN) is an Australian natural gas explorer and producer. It develops low-carbon dioxide (CO₂) unconventional gas resources and serves the energy sector in Australia and the Asia-Pacific region.
In Q2 FY25, Tamboran Resources Corporation (NYSE:TBN) achieved several significant operational milestones. It reported the successful drilling, casing, and cementing of the SS-3H well with a 10,000-foot horizontal section in just 25 days. This is a 43% increase in drilling speed compared to the previous SS-2H well. The company also completed the SS-2H ST1 well across 35 stages, delivering record proppant intensity for the basin with an average of approximately 2,710 pounds per foot (lb./ft)—26% higher than previous wells.
Beyond its immediate operational activities, Tamboran Resources Corporation (NYSE:TBN) is strategically positioning itself for long-term growth. The firm has entered binding agreements with APA Group for the construction, ownership, and operation of a 12-inch Sturt Plateau Pipeline. This project is critical for the proposed SS Pilot Project. Additionally, Tamboran (NYSE:TBN) has signed a non-binding memorandum of understanding with Santos to explore potential Darwin LNG Train 2 expansion and collaboration in their joint EP 161 asset. Analysts hold a Buy rating with a 1-year average price target of $34.67. This projection points to a 66.48% upside potential from the current levels as of April 29.
1. GDS Holdings Limited (NASDAQ:GDS)
Upside Potential as of April 29: 86.48%
Baupost Group’s Stake Value: $100,979,000
GDS Holdings Limited (NASDAQ:GDS) develops and operates high-performance data centers, mainly in China. It provides data center services like colocation (space for servers), managed services, and private connections to public clouds. It also offers hybrid cloud management and outsourced data center solutions.
In Q4 2024, GDS Holdings Limited (NASDAQ:GDS) reported a 9.1% year-over-year net revenue increase to RMB2,690.7 million (US$368.6 million) for continuing operations. It stated that the growth came from the ramp-up of its data centers. For the full year, net revenue grew 5.5% to RMB10,322.1 million (US$1,414.1 million). Adjusted EBITDA rose 13.9% to RMB1,297.7 million in the quarter, with a margin of 48.2%.
GDS Holdings Limited (NASDAQ:GDS) executed a landmark transaction on March 10, 2025, which resulted in monetizing a 70% equity interest in certain data centers to a private REIT (P-REIT). The transaction was at an enterprise value to EBITDA multiple of 13 times and yielded net cash proceeds of RMB500 million at closing. This move aligns with the company’s asset monetization strategy whose aim is to reduce its net debt to 5-6 times EBITDA over the next 12-24 months. On March 20, 2025, JPMorgan raised its price target for GDS (NASDAQ:GDS) to $34.00 from $7.50. The analysts maintained a Neutral rating.
While we acknowledge the potential of GDS Holdings Limited (NASDAQ:GDS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than GDS but that trades at less than 5 times its earnings check out our report about this cheapest AI stock.
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