Billionaire Seth Klarman’s Picks Beat the Market in Q1

#3 Paypal Holdings Inc (NASDAQ:PYPL)

 – Shares Owned by Baupost Group (as of December 31): 11.11 Million

 – Value of Holding (as of December 31): $402.16 Million

The $47 billion online payments company, which recently cancelled a $3.6 million project in North Carolina owing to the state’s anti-gay law that allows businesses to discriminate against gays and lesbians, saw its stock price surge by 8.8% during the first quarter. Baupost inched up its stake in Paypal Holdings Inc (NASDAQ:PYPL) by 1% during the final three months of 2015, with the stock ranking as its sixth-largest position. Piper Jaffray’s Gene Munster recently reiterated his ‘Underweight’ rating on PayPal, and has a price target of $33 on the stock, which is 14% lower than its current value. The analyst believes that there is very little chance that the company will be acquired, while it continues to face headwinds, including from competition such as Apple Pay, which recently launched on mobile sites. Activist investor Carl Icahn‘s Icahn Capital is another major shareholder of Paypal Holdings Inc (NASDAQ:PYPL), owning about 46.27 million shares.

#2 EMC Corporation (NYSE:EMC)

 – Shares Owned by Baupost Group (as of December 31): 29.25 Million

 – Value of Holding (as of December 31): $751.11 Million

A new stake in EMC Corporation (NYSE:EMC) during the fourth quarter turned out to be a success for Baupost, as shares of the company rose by about 4.5% in the first quarter. In October, news of EMC’s merger with Dell surprised the markets, as it will rank as the largest such deal ever conceived in the technology sector. The merger is expected to be completed in the second half of this year. It was recently reported by Bloomberg that the storage equipment giant is looking to sell its Documentum unit to lighten the load for Dell. Raymond James downgraded EMC to ‘Outperform’ from ‘Strong Buy’, as the shares approached the firm’s $29 price target and as the shareholder vote at EMC this spring nears. Paul Singer‘s Elliott Management held about 42.23 million shares of EMC Corporation (NYSE:EMC) on December 31.

#1 Cheniere Energy, Inc. (NYSEMKT:LNG)

 – Shares Owned by Baupost Group (as of December 31): 26.09 Million

 – Value of Holding (as of December 31): $971.84 Million

Baupost boosted its Cheniere Energy, Inc. (NYSEMKT:LNG) holding by 15% during the fourth quarter, which turned out to be unwise, as the stock was one of the worst performers for the firm in the first quarter, losing about 9.3%. After years of construction, the company finally made its first delivery of natural gas to Brazil. According to Goldman Sachs, the company will generate $4.45 in free cash flow per share upon the completion of its Sabine Pass facility, but until that is done, it remains to be seen how safely and efficiently Cheniere will run the terminal. It is perhaps that uncertainty that is keeping investors away from the company. Andreas Halvorsen’s Viking Global upped its stake in Cheniere Energy, Inc. (NYSEMKT:LNG) by 22% in the fourth quarter, to 15.92 million shares.

Disclosure: None