Value Investing Legend Seth Klarman is Buying These 3 Stocks for the Rest of 2022

2. New Oriental Education & Technology Group Inc. (NYSE:EDU)

Percentage of Baupost Group’s 13F portfolio: 2.4%

Value of Baupost Group’s Stake: $162.88 million

Number of Hedge Fund Holders: 22

New Oriental Education & Technology Group Inc. (NYSE:EDU), more commonly referred to as New Oriental, is a provider of private educational services in China. Securities filings reveal that Seth Klarman’s Baupost Group owned over 8 million shares of New Oriental Education & Technology Group Inc. (NYSE:EDU) at the end of June 2022 worth $162.88 million, representing 2.4% of the portfolio. EDU was a new arrival in Klarman’s portfolio in the second quarter.

On July 29, BofA analyst Lucy Yu upgraded New Oriental Education & Technology Group Inc. (NYSE:EDU) to Buy from Neutral with a price target of $36.60, up from $18.80. According to the analyst, the stock’s current share price is on par with the company’s new cash and that fiscal year 2023 will “market a year of a new start.”

At the end of the second quarter of 2022, 22 hedge funds in the database of Insider Monkey held stakes worth $721 million in New Oriental Education & Technology Group Inc. (NYSE:EDU), compared to 23 in the preceding quarter worth $260 million.

In its Q3 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and New Oriental Education & Technology Group Inc. (NYSE:EDU) was one of them. Here is what the fund said:

“The quarter’s leading detractors were Chinese companies that were impacted by the CCP’s regulatory crackdown and liquidity concerns at property developer Evergrande. New Oriental Education & Technology Group Inc. (NYSE:EDU)—the largest provider of private educational services in China—moved sharply lower in July after policymakers implemented new rules which effectively turned Chinese tutoring companies into non-profits. Looking at New Oriental Education & Technology Group Inc. (NYSE:EDU), we closed our position as soon as government policy became clear and used the proceeds to allocate to existing holdings.”