Forget AI: Legendary Value Investor Seth Klarman Is Buying These 10 Value Stocks in 2026

6. Eagle Materials (NYSE:EXP)

Baupost’s Stake: $169,134,000

Eagle Materials (NYSE:EXP) produces cement, gypsum wallboard, aggregates, and recycled paperboard across 70+ facilities in 21 states. Its moat lies in the sheer difficulty of replicating its network — you cannot easily build new cement plants or quarries, and the company’s scale and geographic reach give it real pricing power in local markets.

The business has been under pressure. The Gypsum Wallboard segment — heavily tied to residential construction — saw revenue plunge 16% as housing completions fell and building permits dropped 5.8% year-on-year. A housing recovery is not expected until 2027. However, the Cement segment is holding up well, with volumes growing 9.3% and operating earnings climbing from $86.8 million to $91.3 million. Importantly, management has signaled price increases are coming — which, if volumes hold, should be a meaningful earnings tailwind.

Bulls believe the stock is undervalued. Based on projected full-year figures of $424.5 million in net profits and EBITDA of $782.5 million, Eagle Materials (NYSE:EXP) trades at a discount to every comparable peer. A re-rating to peer averages would imply upside of 79% to 101.5%. Even using the cheapest peer as a benchmark, upside ranges from 2.9% to 22.1%.

J.P. Morgan recently upgraded the stock to Neutral from Underweight with a $225 price target, citing improving cement demand, wallboard weakness that likely troughed in Q4 2025, and an optimistic outlook for the back half of 2026. JPM specifically highlighted healthy infrastructure spending, robust data center construction, and rising demand for warehouses and energy projects as demand drivers.

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