Top Five Stock Picks of Billionaire Value Investor Seth Klarman

#3 Alcoa Inc. (NYSE:AA)

Shares Owned by Baupost Group LLC (as of September 30): 52.27 Million

Value of Holding (as of September 30): $504.93 Million

Baupost Group added a 52.27 million-share position in Alcoa Inc. (NYSE:AA) to its portfolio during the third quarter, which accounts for 8.41% of that portfolio’s value as of September 30. At the end of September, Alcoa announced its plans to separate into two independent, publicly-traded companies: one of them is set to focus on upstream aluminum production and midstream products, while the other will be focused on downstream specialist metals and products. The aforementioned separation is intended to qualify as a tax-free transaction for U.S. federal income tax purposes, but it may also create two businesses that will lure different types of investors. Meanwhile, the shares of Alcoa have lost 49% since the beginning of the year and are currently trading at a trailing price-to-earnings ratio of 20.49, which is slightly below the 22.70 ratio of the S&P 500. Joe Huber’s Huber Capital Management owns 4.36 million shares of Alcoa Inc. (NYSE:AA) as of the end of the third quarter.

#2 ViaSat Inc. (NASDAQ:VSAT)

Shares Owned by Baupost Group LLC (as of September 30): 11.53 Million

Value of Holding (as of September 30): $741.47 Million

Seth Klarman’s Baupost Group held its position in ViaSat Inc. (NASDAQ:VSAT) unchanged during the third quarter at 11.53 million shares. The broadband services and technology company has seen its shares drop by nearly 4% since the beginning of the year, partially owing to its disappointing results for the fiscal second quarter that ended September 30. The company reported revenues of $353.3 million, which were down by 1.5% year-over-year. Meanwhile, its non-GAAP diluted per share net income came in at $0.30, compared to $0.68 reported in the same period last year. Just recently, ViaSat sealed a partnership with Virgin America, which enables travelers to benefit from a o21quicker Wi-Fi connection on Virgin’s airbus aircraft, and will also bring Netflix to air travelers. Mason Hawkins’ Southeastern Asset Management added 1.17 million shares to its position in ViaSat Inc. (NASDAQ:VSAT) during the September quarter, ending the three-month period with 4.65 million shares.

#1 Cheniere Energy Inc. (NYSEMKT:LNG)

Shares Owned by Baupost Group LLC (as of September 30): 22.67 Million

Value of Holding (as of September 30): $1.09 Billion

Cheniere Energy Inc. (NYSEMKT:LNG) was by far the largest equity holding of Baupost Group at the end of the third quarter, representing 18.24% of its portfolio. Seth Klarman’s hedge fund lifted its stake in the energy company by 7.30 million shares during the bloody quarter. The U.S liquefied natural gas exporter has seen its stock decline by 32% since the start of 2015. The low oil-price environment and fast-growing supply of LNG is anticipated to put downward pressure on the nation’s gas exports, which might hinder Cheniere’s operations. Meanwhile, Cheniere’s Sabine Pass LNG export plant in Louisiana is expected to receive its first tanker for loading at the beginning of 2016. Andreas Halvorsen’s Viking Global cut its position in Cheniere Energy Inc. (NYSEMKT:LNG) by 4.12 million shares during the third quarter and held an 11.32 million-share stake as of September 30.

Disclosure: None