In this article will see top 4 stock picks of Seth Klarman from the first quarter of 2024. To see Klarman’s take on the current market situation and details on his returns, click: Seth Klarman 2024 Portfolio: Top New Stock Picks.
For this article, we chose stocks in which Seth Klarman opened new positions or increased his hold in the first quarter of 2024.
4. Herbalife Ltd. (NYSE:HLF)
Seth Klarman’s Stake Value: $22,561,000
Fitness supplements and nutritional products company Herbalife Ltd. (NYSE:HLF) got Seth Klarman’s attention in the fourth quarter of 2022, when the value investor bought two million shares of the company. In the fourth quarter, Baupost increased its position in Herbalife Ltd. (NYSE:HLF) by 20%, ending the quarter with a $22.6 million position in the company. Herbalife Ltd. (NYSE:HLF) shares have lost about 29% so far this year.
3. WESCO International, Inc. (NYSE:WCC)
Seth Klarman’s Stake Value: $35,236,000
WESCO International, Inc. (NYSE:WCC) provides electrical, power, security and logistics solutions. WESCO International, Inc. (NYSE:WCC) is up about 8% so far this year. Of the 933 hedge funds in Insider Monkey’s database, 39 hedge funds reported having stakes in the company. Seth Klarman opened a new position in WESCO International, Inc. (NYSE:WCC) during the first quarter, worth about $35.2 million.
Here is what Artisan Partners had to say about WESCO International, Inc. (NYSE:WCC) in its Q1 2024 investor letter:
“We ended our investment campaigns in Lululemon, WESCO International, Inc. (NYSE:WCC) and BJ’s Wholesale Club during the quarter. WESCO’s 2020 acquisition of Anixter made it the largest US electrical and data center distributor, further strengthening its brand and allowing the company to benefit from supply chain advantages. Our thesis was that the company would benefit from incremental spending increases due to multiple secular trends (energy transition, electrification, reshoring, etc.) while capturing cross-selling opportunities between the two customer bases. Since initiating the position, we have been disappointed in financial results and decided to exit it in favor of higher conviction beneficiaries of these secular trends.”
2. Eagle Materials Inc. (NYSE:EXP)
Seth Klarman’s Stake Value: $71,199,000
With a PE ratio of about 18, building materials company Eagle Materials Inc. (NYSE:EXP) is one of the notable stocks Seth Klarman bought this year. Baupost opened a stake worth about $71.2 million in Eagle Materials Inc. (NYSE:EXP).
In February this year, Jefferies published a list of stocks that have seen improvement in their ROE and showed momentum. According to Jefferies these stocks also have strong balance sheets. Eagle Materials Inc. (NYSE:EXP) was one of these stocks.
Horizon Kinetics LLC mentioned Eagle Materials Inc. (NYSE:EXP) in its Q4 2023 investor letter. Here is what the firm said:
“One such example, which might lately be found in some strategies, is Eagle Materials Inc. (NYSE:EXP). It is one of the largest U.S. producers of cement and aggregates, as well as gypsum wallboard. Traditionally, cement makers were highly localized businesses, because cement’s high weight/value ratio makes it uneconomic to truck farther than about a 150-mile radius. A new highway or construction project in the area would be profitable, but when that activity ended, the quarry might have to close until the next time. Over many years, Eagle Materials has taken that cyclicality out of the business by acquiring other such companies, even though any single location remains subject to the historically episodic demand in its immediate environs. It now has dozens of facilities throughout the mid-west and into the sunbelt.
The highly local monopolistic characteristics of each location still remain, though, which lends that character to the entire company. And for obvious reasons, it’s unlikely that many more cement plants will be built in this country. Eagle Materials has 25 to 50 years or more of reserves at every location. This is a kind of business that can benefit from a long-term rising price environment.”
1. Clarivate Plc (NYSE:CLVT)
Seth Klarman’s Stake Value: $227,346,000
Data and information services company Clarivate Plc (NYSE:CLVT) has been in Seth Klarman’s portfolio since the third quarter of last year. Since then Baupost has added to its stakes in the company. During the first quarter, the hedge fund increased its stake in Clarivate Plc (NYSE:CLVT) by 20%, ending the period with a $227 million stake.
Earlier this month Clarivate Plc (NYSE:CLVT) posted first quarter results. Adjusted EPS in the period came in at $0.14, meeting estimates. Revenue in the quarter fell 1.3% year over year to $621.2 million, surpassing estimates by $6.35 million.
You can also take a look at Michael Burry Is Selling These Stocks in 2024 and Jim Cramer’s Latest Stock Picks in May 2024
