Seth Klarman Stock Portfolio: Top 5 Stock Picks

Below we delve into the Seth Klarman Stock Portfolio: Top 5 Stock Picks. For our methodology and a more comprehensive list please see Seth Klarman Stock Portfolio: Top 10 Stock Picks.

5. Veritiv Corporation (NYSE:VRTV)

Value of Baupost Group‘s 13F Position: $336 Million

Number of Hedge Fund Shareholders: 19

Seth Klarman’s Baupost Group trimmed the size of its Veritiv Corporation (NYSE:VRTV) holding by 4% during Q3, ending the quarter with 3.44 million shares. There was a jump in hedge fund ownership of Veritiv during the fourth quarter of 2021 in the midst of VRTV shares’ impressive run from less than $12 in the middle of 2020 to more than $120.

The business products and solutions company continues to benefit from the ongoing rise of e-commerce, which is driving demand for its packaging solutions. Veritiv Corporation (NYSE:VRTV) grew organic sales by 15% during the third quarter, while its adjusted EBITDA grew by more than 50%. The company’s adjusted EBITDA margins also reached record highs during the quarter courtesy of aggressive pricing actions.

The strong performance allowed Veritiv to initiate a quarterly dividend of $0.63 per share, which initially equated to a healthy 2.32% yield. That number has since dipped to 1.83% as the stock has bounded upwards by 46% in the fourth quarter. Bank of America analyst George Staphos lowered his price target on Veritiv Corporation (NYSE:VRTV) to $126 from $155 in October, but kept a ‘Buy’ rating on the stock. He believes the packaging sector is cheap right now and a good defensive play, but warns that recession risks loom large over the industry.