5 High Growth Value Stocks to Buy According to Seth Klarman

4. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Holders: 177

Baupost Group’s Stake Value: $207,930,000

3-year Revenue Growth: 66.8%

Seth Klarman raised his Meta Platforms, Inc. (NASDAQ:META) stake in the fourth quarter of 2022 by 151%, holding 1.72 million shares worth nearly $208 million, representing 3.39% of the total 13F securities. 

Financial Times recently reported that Meta Platforms, Inc. (NASDAQ:META) may be considering another round of layoffs due to performance reviews and budgetary uncertainty within the company, as noted by BofA analyst Justin Post. While the article did not provide specific numbers regarding the potential layoffs, Post believes that there is still room for further streamlining in the company. He pointed out that Meta Platforms, Inc. (NASDAQ:META) had around 58,000 employees two years ago, compared to an estimated 76,000 today. Additionally, Meta has the highest operating expense per employee among major online media platforms, according to BofA. Although Metaverse spending may be inflating operating expenses by up to 25%, the analyst believes that there is still potential to reduce Meta’s cost structure. Despite these concerns, BofA maintained a Buy rating and a $220 price target on Meta Platforms, Inc. (NASDAQ:META) shares on February 13. 

According to Insider Monkey’s Q3 data, 177 hedge funds were long Meta Platforms, Inc. (NASDAQ:META), compared to 185 funds in the last quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 11.8 million shares worth $1.60 billion. 

Vulcan Value Partners made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q4 2022 investor letter:

“During the quarter we sold Meta Platforms, Inc. (NASDAQ:META) after owning the business for over four years. The fundamentals of our investment case were based on the tremendous number of users that spent time on its various properties and the advertising dollars that flowed to the company as a result. We believed its competitive advantage was that the platform was, more or less, a monopoly on people’s time and attention. The rise of TikTok and other emerging platforms has given us pause on the company’s ability to maximize that advantage. From our perspective, the idea of “one platform to rule them all” may now be a thing of the past as social offerings have become more fragmented.

In addition, though our research has indicated that much of the initial damage done from Apple’s iOS 14.5 privacy changes has been repaired, we remain concerned with Apple’s influence over the digital advertising ecosystem. Apple is one of the largest gatekeepers to Meta’s mobile services, and it has become more difficult for us to gauge the pace of change emerging from Apple relating to privacy, as well as evaluating Apple’s ambitions in advertising…” (Click here to read the full text)