In this article, we discuss the 3 stocks value investing legend Seth Klarman is buying for the rest of 2022. If you want to see our detailed analysis of Seth Klarman’s investment strategy and views on the current market situation, go directly to Value Investing Legend Seth Klarman is Buying These 6 Stocks for the Rest of 2022.
3. Warner Bros. Discovery, Inc. (NASDAQ:WBD)
Percentage of Baupost Group’s 13F portfolio: 3.56%
Value of Baupost Group’s Stake: $241.56 million
Number of Hedge Fund Holders: 68
Warner Bros. Discovery, Inc. (NASDAQ:WBD) is an American multinational mass media and entertainment conglomerate that offers consumers a differentiated portfolio of content, brands and franchises across television, film, streaming and gaming. Investment firm Baupost Group holds 18 million WBD stocks as of Q2 2022.
Klarman’s fund initiated a new stake in the company during Q2.
Earlier this August, Citi analyst Jason Bazinet lowered the price target on Warner Bros. Discovery, Inc. (NASDAQ:WBD) to $21 from $29 and kept a Buy rating on the shares post the Q2 results. The analyst continues to like the company based on the merits of its direct-to-consumer pivot and potential synergies from its recently closed merger.
At the end of the second quarter of 2022, 68 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in Warner Bros. Discovery, Inc. (NASDAQ:WBD), up from 47 in the previous quarter worth $790 million. Among the hedge funds being tracked by Insider Monkey, New York-based firm Laurion Capital Management is a leading shareholder in Warner Bros. Discovery, Inc. (NASDAQ:WBD), with 13.5 million shares worth more than $338 million.
Here is what Longleaf Partners said about Warner Bros. Discovery, Inc. (NASDAQ:WBD) in its second quarter investor letter:
“Warner Bros. Discovery, Inc. (NASDAQ:WBD) – A new purchase within the last year, media conglomerate Warner Bros Discovery’s (WBD) stock price has been materially impacted by a terrible Netflix quarter (that probably is a good sign for WBD long-term) and fears of a downturn impacting advertising revenues and subscribers. While we believe these are valid concerns, media has historically been an attractive industry for our style of investing and media companies have been inflation beneficiaries. While the market is taking a “show me” approach to see how the merger will unfold, we believe the company has multiple levers to grow free cash flow per share. We saw eight different insiders buy shares personally in the quarter, which is an extremely strong vote of confidence from people who have a clear view of the challenges and opportunities facing the company.”
