Seth Klarman Is Buying These 5 Value Stocks in 2026

3. Elevance Health (NYSE:ELV)

Baupost’s Stake: $373,301,000

Elevance Health (NYSE:ELV) is a key holding in Klarman’s portfolio. It is one of the largest health insurers in the US, serving 45.4 million members. The stock has been hammered by rising healthcare costs, disappointing government payment rates, and regulatory pressure. But the recovery appears to be gaining traction. In Q1 2026, revenue and EPS showed growth and the benefit expense ratio — which measures claims costs against premium income — improved to 86.8%, down from 90% in 2025.

A key regulatory cloud also lifted. The Centers for Medicare and Medicaid Services raised its 2027 Medicare Advantage payment rate to levels better than the market expected.

Management responded by raising full-year 2026 adjusted EPS guidance.

Longer term, an aging population, AI-driven cost efficiencies, and an improving regulatory relationship all support the bull case. At a forward P/E of 14.46x and still nearly 30% below its former highs, Klarman appears to be betting the worst is firmly behind this business.

Hotchkis & Wiley Large Cap Fundamental Value Fund stated the following regarding Elevance Health, Inc. (NYSE:ELV) in its Q1 2026 investor letter:

“Elevance Health, Inc. (NYSE:ELV) is one of the largest health insurers, yet it trades at a discount to the broader market despite being a high quality business that grows faster than GDP and returns a significant portion of its cash to shareholders. Q1 performance was weak, driven by disappointing FY26 guidance amid declining Medicaid enrollment and flat Medicare reimbursement rates proposed by the Trump administration. We view these pressures as medium-term noise and believe Elevance has the ability to improve margins over time through benefit adjustments and/or higher premiums.”