In this piece, we will take a look at the 13 high growth value stocks to invest in according to Seth Klarman. If you want to skip our overview of value stocks and an introduction to Klarman's investing history, then you can skip ahead and take a look at the 5 High Growth Value Stocks to Invest in According to Seth Klarman.
One of the more well known investment strategies on Wall Street, which has also seen some of the most professional investors attest to its success is value investing. When compared to today's high frequency trading and quantitative model based stock market trading environment, value investment is a classical approach that evaluates whether a firm's underlying fundamentals and business models can cause share price appreciation in the future.
Two of the most well known value investors of our time are Warren Buffett of Berkshire Hathaway and Seth Klarman of the Buapost Group. Buffett's Berkshire is one of the biggest investment holding companies in the world, with Insider Monkey's research showing that the combined value of its 13F investments as of December 2023 end was a whopping $347 billion. As part of our regular coverage of hedge fund investments, Insider Monkey also analyzed Berkshire's Q4 2023 investment portfolio as part of our coverage of Warren Buffett 2024 Portfolio: Top 12 Stock Picks. You can take a look at the portfolio by clicking on the link, but the top three picks were American Express Company (NYSE:AXP), Bank of America Corp (NYSE:BAC), and Apple Inc.(NASDAQ:AAPL).
Another follower of value investing is Seth Klarman. His hedge fund had $4.5 in Q4 2023 holdings, and some of the biggest positions were technology companies such as Viasat, Inc. (NASDAQ:VSAT) and Alphabet Inc. (NASDAQ:GOOG). So what is value investing? Well, the key principle of this strategy is determining the fair value of stock and comparing it with the market price through a metric called the margin of safety. The margin of safety is the difference between the fair value and the market price, and the greater this difference is, the more comfortable a value investor feels in betting their money on an equity.
Just like we have done with Buffett's investments, we also took a look at Klarman's value stock picks. The latest such coverage was 12 Best Value Stocks To Buy Heading Into 2024 (Picked By Seth Klarman), and the top three stocks in this list were Willis Towers Watson Public Limited Company (NASDAQ:WTW), The Liberty SiriusXM Group (NASDAQ:LSXMA), and Fidelity National Information Services, Inc. (NYSE:FIS). Since it's March 2024, it's important to see how well these stocks have performed over the past six months since they were disclosed by Baupost for Q3 2023. Well, the three stocks' share price performance over the past six months has been 27.73%, 27%, and 26%. Interestingly, all three of Klarman's top value stock picks in Q3 are up by 26% or 27%, despite the fact that these are relatively stable companies with few catchy products like NVIDIA Corporation's (NASDAQ:NVDA) Blackwell GPU.
Finally, before we head to our list of the high growth value stock picks of Seth Klarman, Warren Buffett's latest letter to Berkshire shareholders also features some hidden gems for value investing. In his letter, Buffett shares:
Speed of communication and the wonders of technology facilitate instant worldwide paralysis, and we have come a long way since smoke signals. Such instant panics won’t happen often – but they will happen. Berkshire’s ability to immediately respond to market seizures with both huge sums and certainty of performance may offer us an occasional large-scale opportunity. Though the stock market is massively larger than it was in our early years, today’s active participants are neither more emotionally stable nor better taught than when I was in school.
These seizures are the perfect opportunity for value investing since they can open up large differentials between the fair value and the market price. Buffett's long history of trading has also seen him capitalize on such seizures early in his career, with perhaps the most notable being his trifles with the shares of American Express Company (NYSE:AXP).
With these details in mind, let's take a look at Seth Klarman's top high growth value stocks. A couple of notable names are Clarivate Plc (NYSE:CLVT), Warner Bros. Discovery, Inc. (NASDAQ:WBD), and Alphabet Inc. (NASDAQ:GOOG).
Seth Klarman of Baupost Group
Our Methodology
To make our list of Seth Klarman's high growth value stocks, we ranked all stocks in Baupost Group's Q4 2023 investment portfolio by their 3-year average revenue growth rate (5-year if the 3-year estimate was in the red) and picked the top stocks. The revenue growth data was sourced from Morningstar Financial.
For these high growth value stocks, we used hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
13. Herbalife Ltd. (NYSE:HLF)
Number of Q4 2023 Hedge Fund Shareholders: 35
Average 3-Year Revenue Growth Rate: 0.69%
Baupost Group's Q4 2023 Stake: $
Herbalife Ltd. (NYSE:HLF) is an American weight management, sports, and nutrition products provider. The average share price target of $12.80 prices in a hefty double digit percentage upside to the shares after the February 2024 Herbalife Ltd. (NYSE:HLF) share price drop in the wake of the firm's latest earnings report that saw it miss estimates.
Insider Monkey dug through 933 hedge funds for their fourth quarter of 2023 shareholdings and found that 35 had invested in the company. Herbalife Ltd. (NYSE:HLF)'s biggest hedge fund investor is William Duhamel's Route One Investment Company as it owns $157 million worth of shares.
Along with Warner Bros. Discovery, Inc. (NASDAQ:WBD), Clarivate Plc (NYSE:CLVT), and Alphabet Inc. (NASDAQ:GOOG), Herbalife Ltd. (NYSE:HLF) is a high growth value stock in Baupost Group's investment portfolio.
12. Fidelity National Information Services, Inc. (NYSE:FIS)
Number of Q4 2023 Hedge Fund Shareholders: 66
Average 5-Year Revenue Growth Rate: 3.12%
Baupost Group's Q4 2023 Stake: $
Fidelity National Information Services, Inc. (NYSE:FIS) provides technology services to the finance industry. The firm has missed analyst EPS estimates in three out of its four latest quarters and the shares are rated Buy on average.
By December 2023 end, 66 out of the 933 hedge funds covered by Insider Monkey's research were Fidelity National Information Services, Inc. (NYSE:FIS)'s investors. Michael Gelband's ExodusPoint Capital owned the largest stake which was worth $399 million.
11. Viasat, Inc. (NASDAQ:VSAT)
Number of Q4 2023 Hedge Fund Shareholders: 15
Average 3-Year Revenue Growth Rate: 3.44%
Baupost Group's Q4 2023 Stake: $
Viasat, Inc. (NASDAQ:VSAT) is a satellite based broadband telecommunications firm headquartered in California. Amidst tough competition in the satellite internet market due to SpaceX's Starlink satellite internet constellation, the firm scored a win in March 2024 when it made a deal with a Korean airline to provide connectivity on planes.
By the end of last year's fourth quarter, 15 out of the 933 hedge funds profiled by Insider Monkey had held a stake in Viasat, Inc. (NASDAQ:VSAT). Seth Klarman's Baupost Group was the largest shareholder through its $452 million stake, with the investment also being the biggest in the portfolio.
10. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC)
Number of Q4 2023 Hedge Fund Shareholders: 50
Average 3-Year Revenue Growth Rate: 5.64%
Baupost Group's Q4 2023 Stake: $62.8 million
SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) enables businesses to manage their financial, office, and other business functions. It's one of the strongest rated stocks on our list of high growth value stocks as the shares are rated Strong Buy on average.
As of Q4 2023 end, 50 out of the 933 hedge funds tracked by Insider Monkey had bought the firm's shares. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC)'s biggest hedge fund investor is Richard S. Pzena's Pzena Investment Management through its $884 million investment.
9. Jacobs Solutions Inc. (NYSE:J)
Number of Q4 2023 Hedge Fund Shareholders: 39
Average 3-Year Revenue Growth Rate: 6.42%
Baupost Group's Q4 2023 Stake: $94.4 million
Jacobs Solutions Inc. (NYSE:J) is a sizeable engineering consulting company headquartered in Dallas, Texas. The firm has had a busy March, after teaming up with one of Britain's largest utilities and securing a contract for work on an American air force base.
For their fourth quarter of 2023 shareholdings, 39 out of the 933 hedge funds part of Insider Monkey's database had invested in Jacobs Solutions Inc. (NYSE:J).
8. CRH plc (NYSE:CRH)
Number of Q4 2023 Hedge Fund Shareholders: 65
Average 3-Year Revenue Growth Rate: 8.20%
Baupost Group's Q4 2023 Stake: $231 million
CRH plc (NYSE:CRH) is one of the biggest construction and building materials providers in the world. The firm's stock soared to a record high at the close of February 2024 after it beat analyst EPS estimates for its latest quarterly results.
Insider Monkey dug through 933 hedge fund portfolios covering their December quarter of 2023 shareholdings to find that 65 were CRH plc (NYSE:CRH)'s investors.
7. Garrett Motion Inc. (NASDAQ:GTX)
Number of Q4 2023 Hedge Fund Shareholders: 32
Average 3-Year Revenue Growth Rate: 8.6%
Baupost Group's Q4 2023 Stake: $28.9 million
Garrett Motion Inc. (NASDAQ:GTX) is a midsized car parts company based in Switzerland. The firm's fourth quarter financial results were a comforting bunch, as not only did Garrett Motion Inc. (NASDAQ:GTX) meet analyst EPS estimates but it also announced a hefty $235 million share buyback program.
For their fourth quarter of 2023 shareholdings, 32 out of the 933 hedge funds covered by Insider Monkey's research had bought a stake in the firm. Howard Marks' Oaktree Capital Management was the largest Garrett Motion Inc. (NASDAQ:GTX) shareholder through its $426 million investment.
6. Tower Semiconductor Ltd. (NASDAQ:TSEM)
Number of Q4 2023 Hedge Fund Shareholders: 28
Average 3-Year Revenue Growth Rate: 10.78%
Baupost Group's Q4 2023 Stake: $82.7 million
Tower Semiconductor Ltd. (NASDAQ:TSEM) is an Israeli semiconductor manufacturer that makes sensors and other associated products. The firm purportedly faced a setback in March 2024 when a media report claimed that it was facing troubles in India in setting up new sites.
As of Q4 2023 end, 28 out of the 933 hedge funds tracked by Insider Monkey had invested in Tower Semiconductor Ltd. (NASDAQ:TSEM). Richard Mashaal's Rima Senvest Management owned the biggest stake which was worth $218 million.
Clarivate Plc (NYSE:CLVT), Tower Semiconductor Ltd. (NASDAQ:TSEM), Warner Bros. Discovery, Inc. (NASDAQ:WBD), and Alphabet Inc. (NASDAQ:GOOG) are some top Seth Klarman high growth value stock picks.
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Disclosure. None.13 High Growth Value Stocks to Invest in According to Seth Klarman was initially published on Insider Monkey.
