Billionaire Seth Klarman’s Top 4 Biotech Stock Picks

1. Clarivate Plc (NYSE:CLVT)

Seth Klarman’s Stake Value: $150.975 million

Clarivate Plc (NYSE:CLVT) provides insights and analytics services. Its subscription-based services are aimed at scientific and academic research, life sciences, patent research and intelligence, industry codes and standards, trademark research and protection.

On November 7, Clarivate Plc (NYSE:CLVT) announced its Q3 earnings result with a non-GAAP EPS of $0.21, topping the consensus by $0.03. The revenue of $647.2 million increased 1.8% YoY and beat the estimates by $15.79 million. Due to the growth of transactional and other revenues, subscription revenues, and recurring revenues, the total organic revenue grew by 1.7%.

In the third quarter, Baupost Group initiated a position in Clarivate Plc (NYSE:CLVT) with 22.5 million shares worth $150.975 million, representing 2.89% of the fund’s portfolio. Leonard Green & Partners was the most significant shareholder of the company, with more than 116.666 million shares worth $782.832 million.

Baron Funds mentioned Clarivate Plc (NYSE:CLVT) in its first-quarter 2023 investor letter. Here is what it said:

“We added to our position in Clarivate Plc (NYSE:CLVT), a leading global information services provider that serves customers across academia and government, life sciences & health care, and intellectual property. Clarivate goes to market with a collection of well-known brands, including Web of Science, ProQuest One, Alma, Cortellis, Derwent, and CompuMark.

Clarivate has an attractive business model. The company’s foundation is its highly valuable proprietary data assets (#1 or #2 player in most markets) that are combined with analytical tools and insights to help users apply the underlying data to everyday business problems. As an important part of the end users’ daily workflow, Clarivate’s indispensable, mission-critical solutions create a sticky and predictable business model with high levels of recurring revenue (about 80% recurring revenue and over 90% renewal rates). Clarivate has strong operating leverage (“build it once, sell it many times”) and should be able to sustain adjusted EBITDA margins in the low to mid-40% range…” (Click here to read the full text)

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