Seth Klarman Stock Portfolio: Top 5 Stock Picks

2. Qorvo, Inc. (NASDAQ:QRVO)

Value of Baupost Group‘s 13F Position: $538 Million

Number of Hedge Fund Shareholders: 36

Qorvo, Inc. (NASDAQ:QRVO) remains Seth Klarman’s second-largest holding for the fourth straight quarter after he trimmed his position by 3% to 6.78 million shares during Q3. Hedge fund ownership of Qorvo is down by 36% over the last two years, the same amount QRVO shares have lost over the last 52 weeks. Steve Cohen’s Point72 Asset Management sold off its stake in Qorvo during Q3.

Qorvo, Inc. (NASDAQ:QRVO) shares have been heavily impacted due to the slump in global smartphone sales, namely the sales of Android devices. The chipmaker’s Q2 of fiscal 2023 cellular revenue fell by 17% year-over-year to $787 million due to lower Android shipments. While Qorvo’s cellular revenue grew by 15% year-over-year, there are mounting fears on that front as well, as it’s been reported that Apple Inc. (NASDAQ:AAPL), the company’s largest customer, may cut back on iPhone production early next year in light of a potential recession and surging inflation dampening demand for its products.

Vulcan Value Partners likes Qorvo, Inc. (NASDAQ:QRVO)’s long-term prospects regardless of the Apple factor, as the fund noted in its Q1 2022 investor letter:

“Qorvo Inc. is one of the two major providers of radio frequency RF systems which are critical components of mobile devices including smart phones and the Internet of Things (IoT). Two transitory concerns have recently affected the company’s stock price. First, supply chain issues continue to be a constraint. Second, Apple recently announced its decision to decrease production of its iPhone SE model. Neither of these issues threatens their long-term competitive position. Qorvo’s value is stable and despite the recent pressure on the stock price, we feel its long-term prospects are promising.”