In this article we will take a look at the top 5 stock picks in Seth Klarman’s portfolio. You can see our detailed analysis of Klarman’s history, investment philosophy, and hedge fund performance at Seth Klarman’s Portfolio: Top 10 Stock Picks.
5. Viasat, Inc. (NASDAQ:VSAT)
Klarman’s Stake Value: $811.8 million
Percentage of Seth Klarman’s 13F Portfolio: 6.58%
Number of Hedge Fund Holders: 22
Viasat, Inc. (NASDAQ:VSAT) is a communications company based in California that provides high-speed satellite broadband services and secure networking systems that cover military and commercial markets. Ranked fifth on the list of the top 10 stock picks in Seth Klarman’s portfolio, Viasat, Inc. (NASDAQ:VSAT) has a market capitalization of $4.02 billion.
Seth Klarman’s Baupost Group currently holds 16.28 million shares of Viasat, Inc. (NASDAQ:VSAT), amounting to over $811.8 million in worth and representing 6.58% of the fund’s total portfolio value. By the end of the second quarter of 2021, 22 hedge funds out of the 873 tracked by Insider Monkey held stakes in Viasat, Inc. (NASDAQ:VSAT) worth roughly $1.26 billion. This is compared to 26 hedge funds in the previous quarter with a total stake value of approximately $1.18 billion.
For the second quarter of 2021, the company issued its financial report which revealed quarterly revenues of Viasat, Inc. (NASDAQ:VSAT) amounted to $554 million.
On August 9, Needham analyst Ryan Koontz raised the firm’s price target on Viasat, Inc. (NASDAQ:VSAT) to $60 from $54 and keeps a Buy rating on the shares, owing to the company’s “strong” Q1 earnings.
Longleaf Partners Small-Cap Fund, in its Q4 2020 investor letter, mentioned Viasat, Inc. (NASDAQ: VSAT). Here is what Longleaf Partners Small-Cap Fund has to say about Viasat, Inc. in its letter:
“ViaSat (-50%, -2.29%; –, –), the satellite communications company, was also a top detractor this year. We exited our position in September at a moderate loss, but a longer-term opportunity cost after six years of ownership. Over the course of our holding, ViaSat shrunk its residential subscriber churn and raised prices, as we had originally believed they would. Its government business grew revenues and profits strongly, and ViaSat Inflight signed up over 2000 airplanes. But the company will not produce positive FCF for several more years due to the ongoing investment demands of its next-gen satellites and other capital allocation decisions. Hard to quantify threats from new entrants have emerged from the likes of a still questionable but now well-funded SpaceX and a farther-off Amazon constellation. We have also disagreed with management on certain items over our holding period. There is a wide range of outcomes from here for the business, but we felt we could deploy the capital elsewhere with less risk.”
4. Qorvo, Inc. (NASDAQ:QRVO)
Klarman’s Stake Value: $1.04 billion
Percentage of Seth Klarman’s 13F Portfolio: 8.46%
Number of Hedge Fund Holders: 40
Qorvo, Inc. (NASDAQ:QRVO) is a semiconductor company that develops and commercializes technologies and products for wireless and wired connectivity. Ranked fourth on the list of the top 10 stock picks in Seth Klarman’s portfolio, Qorvo, Inc. (NASDAQ:QRVO) has a market capitalization of $19.38 billion.
Seth Klarman’s Baupost Group presently holds more than 5.33 million shares of Qorvo, Inc. (NASDAQ:QRVO), worth $1.04 billion and accounting for 8.46% of the fund’s total investment portfolio. At the end of the second quarter of 2021, 40 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in Qorvo, Inc. (NASDAQ:QRVO), down from 41 in the preceding quarter worth $2.32 billion.
For the second quarter of 2021, Qorvo, Inc. (NASDAQ:QRVO) reported earnings per share of $3.61, beating estimates by $0.58. Qorvo, Inc. (NASDAQ:QRVO) also reported revenues amounting to $29.08 billion, surpassing forecast estimates by $1.19 billion.
On August 5, BMO Capital analyst Ambrish Srivastava raised the firm’s price target on Qorvo, Inc. (NASDAQ:QRVO) to $200 from $190 and keeps a Market Perform rating on the shares.
3. eBay Inc. (NASDAQ:EBAY)
Klarman’s Stake Value: $1.04 billion
Percentage of Seth Klarman’s 13F Portfolio: 8.48%
Number of Hedge Fund Holders: 39
eBay Inc. (NASDAQ: EBAY) is an American multinational e-commerce company that facilitates consumer and business sales in over 190 markets globally. Ranked third on the list of the top 10 stock picks in Seth Klarman’s portfolio, eBay Inc. (NASDAQ:EBAY) has a market capitalization of $47.87 billion.
Seth Klarman’s Baupost Group currently holds 14.89 million shares of eBay Inc. (NASDAQ:EBAY), amounting to $1.04 in worth and accounting for 8.48% of the fund’s portfolio. At the end of the second quarter of 2021, 39 hedge funds in the database of Insider Monkey held stakes worth $3.1 billion in eBay Inc. (NASDAQ:EBAY), down from 51 in the preceding quarter worth $3.76 billion.
On August 11, eBay Inc. (NASDAQ:EBAY) issued its quarterly earnings report for the second quarter of 2021, with reported earnings at $0.99, beating estimates by $0.03. The company also reported revenues of $2.67 billion, crossing estimated revenues by $39.80 million.
Of the hedge funds being tracked by Insider Monkey, Ivy Lane Capital is a leading shareholder in eBay Inc. (NASDAQ:EBAY) with 191,000 shares worth $13.4 billion.
In its Q4 2020 Investor Letter, Steel City Capital highlighted a few stocks and eBay Inc. (NASDAQ:EBAY) is one of them. Here is what the fund said:
“eBay (Long): EBAY continues to be a core holding in the Partnership’s long book despite not having any “sexy” attributes or unknown catalysts. I like EBAY because it checks the boxes of being both capital light and priced as a value stock (low multiple of free cash flow), factors which are attractive in a potentially inflationary environment.
In 3Q’20 the company printed $2.6 billion of revenue vs. guidance of $2.4 billion (a $200 million beat) while full year revenue guidance was taken up by $400 million, implying 4Q’20 would be higher by $200 million as well. Free cash flow from continuing ops was guided to $2.3 billion for the full year, slightly above the $2.0 billion the business regularly generated before getting a Covid/stimulus related boost.
EBAY will have about $4.6 billion of cash on hand at year end5 and should receive another $2.0 billion in after-tax proceeds this quarter related to the sale of its Classifieds portfolio6 . Additionally, the company will receive 540 million shares from Adevinta which are currently valued at ~$8.3 billion, and also holds a warrant to purchase a 5.0% stake in payment processor Adyen which was last valued at ~$775 million. Additional asset sales are also not out of the question7 . Backing everything out at today’s market cap of $38.2 billion gives a clean market cap for the core marketplace of $22.6 billion. At a minimum, I expect $2.0 billion of free cash flow in FY’21, with the potential for a higher figure to the extent the incoming administration is successful in cutting additional stimulus checks. By FY’22, free cash flow should ramp to $2.3 billion after incorporating a full year’s contribution from the managed payments initiative. This values EBAY at 9.6x free cash flow, or 11.7x excluding stock-based comp.”
2. Intel Corporation (NASDAQ:INTC)
Klarman’s Stake Value: $1.22 billion
Percentage of Seth Klarman’s 13F Portfolio: 9.9%
Number of Hedge Fund Holders: 78
Intel Corporation (NASDAQ:INTC) is a California-based firm that markets technologies for smart devices and is among the worlds largest semiconductor manufacturers. Ranked second on our list of the top 10 stocks in Seth Klarman’s portfolio, Intel Corporation (NASDAQ:INTC) has a market capitalization of $219.24 billion.
At present, Seth Klarman’s Baupost Group holds more than 21.7 million shares of Intel Corporation (NASDAQ:INTC), worth over $1.22 billion and representing 9.9% of the investment fund’s portfolio. At the end of the second quarter of 2021, 78 hedge funds in the database of Insider Monkey held stakes worth $6.7 billion in Intel Corporation (NASDAQ: INTC), down from 83 in the previous quarter worth $7.6 billion.
The company issued its quarterly earnings report for the second quarter of 2021 on July 22, with reported earnings per share at $1.24, surpassing estimates by $0.21. Additionally the reported revenues came at $18.53 billion, crossing estimated revenues by $735.06 million.
Alger Spectra Fund, in their Q1 2021 investor letter, mentioned Intel Corporation (NASDAQ: INTC). Here is what the fund said:
“Short exposure to Intel also detracted from performance. Intel designs and manufactures semiconductors for the computing and communications industries. Intel’s proprietary intellectual strength and manufacturing prowess versus the competition is
deteriorating, which is causing the company to lose market share and profit opportunities. The short position detracted from portfolio returns as the share price reacted positively to the announcement of Pat Gelsinger being hired as chief executive officer, a stronger-than-anticipated quarterly earnings report driven by unusually robust PC sales that we believe are unsustainable and the unveiling of “Intel Unleashed,” a new long-term program to help improve manufacturing and spur innovation. This program involves opening two fabrication plants in Arizona, which confirms Intel’s commitment to continue as an integrated design manufacturer. Importantly, Intel continues to experience issues with its next generation server chips which are disadvantaging Intel versus the competition.”
1. Liberty Global Inc. (NASDAQ:LBTY)
Klarman’s Stake Value: $1.45 billion
Percentage of Seth Klarman’s 13F Portfolio: 11.84%
Number of Hedge Fund Holders: 30
Liberty Global Inc. (NASDAQ:LBTY) is a British-Dutch-American multinational telecommunications company that provides converged broadband, video, and mobile communications services. The company has a market capitalization of $16.43 billion and is ranked first on the list of the top 10 stock picks in Seth Klarman’s portfolio.
Seth Klarman’s Baupost Group currently holds 53.9 million shares of Liberty Global Inc. (NASDAQ:LBTY) amounting to $1.45 billion in worth and representing 11.84% of the fund’s portfolio. By the end of the second quarter of 2021, 30 hedge funds out of the 873 tracked by Insider Monkey held stakes in Liberty Global Inc. (NASDAQ:LBTY) worth roughly $806 million. This is compared to 35 hedge funds in the previous quarter with a total stake value of approximately $848 million.
The company released its quarterly earnings report for the second quarter of 2021 on July 29, with reported earnings per share at $19.55, surpassing forecast estimates by $19.06. In addition, the company also reported revenues of $3.11 billion, falling short of the estimated revenues by $146.36 million.
Of the hedge funds being tracked by Insider Monkey, Harris Associates is a leading shareholder in Liberty Global Inc. (NASDAQ:LBTYA) with 51.1 million shares worth $1.38 billion.
You can also take a peek at 10 Best Safe Dividend Stocks According to Billionaire Dan Loeb and 10 Best Robinhood Stocks Under $20.
