Seth Klarman is a legendary name in the coverage background space. He entered Wall Street directly out of college, where he worked as an analyst at Mutual Shares Corporation. Klarman continued to Baupost Groupwhere he has always been. Like most coverage fund managers, Klarman has a set of principles that guide their investment decisions. Most of these principles were captured in a 1991 book entitled “Safety Margin: Value Value Investment Strategies for Attentive Investor AVERSOR”.
Klarman has established himself as the main defender of value investment. In fact, this is the central theme of the 1991 book. Defense to eliminate emotions from the investment process and see opportunities for what they are.
He writes: “Investors successfully are usually unpleasant, allowing the greed and fear of others to play in their hands.”
In an interview with Harvard Business School, Klarman insisted that he is not willing to abandon value investment for other approaches. He maintained that “value investment is intellectually elegant. Basically buying offers. It also calls for all studies to show that it works. People who pursue growth, who pursue Highfliers, inevitably lose because they paid a premium price. They lose people who have more patience and more discipline.”
It is not uncommon for Baupost to be one of the best performance coverage funds in the world. The fund could have been behind giants like Third Point and Elliot in the period 2015-2024, but the ability to stay true to a decades strategy and still increase the gains is impressive. Last year, the fund traveled about 20% of its investor team to try to lead the boat to larger profits. That is why Klarman commented that “with a slightly smaller investment team, we have increased the level of energy, approach, accountability and collaboration.”
And these efforts are already bearing fruit. In December last year, the fund had won 10%, the first two -digit return since 2021, according to Bloomberg. In other words, after 42 years in the party, Klarman is still able to turn his investment fortunes. That is why it is wise to see what stocks are in their portfolio, especially those with enormous potential.
For this list, we have painted through the Baupost Group 2024 dry 13f files. We focused only on companies’ actions and excluded interests in ETF and options. From the result, the stocks were classified in ascending order based on the analysts’ price objectives and we selected the 10 best companies with the most potential on the reverse (from April 29).
Why are we interested in the stocks that cover the funds? The reason is simple: our research has shown that we can overcome the market by imitating the best stock options for the best coverage funds. The strategy of our quarterly bulletin selects 14 stocks of small layers and large layers each quarter and has returned 373.4% since May 2014, surpassing its reference point at 218 percentage points (Check out more details here)).
Drum Resource Corporation (NYSE: TBN)
Seth Clarman of Building Post Group
Potential upside down from April 29: 86.48%
BAUDA GROUP PARTICIPATION VALUE: $ 100,979,000
GDS Holdings Limited (NASDAQ: GDS) develops and operates high performance data centers, mainly in China. It provides data centers such as Colocation (Servers), managed services and private connections with public clouds. It also offers hybrid management solutions and outsourced data centers.
In the fourth quarter of 2024, GDS Holdings Limited (NASDAQ: GDS) reported an increase in year -on -year net income of 9.1% year -on -year up to 2.690.7 million RMB ($ 368.6 million) for continuous operations. He stated that growth comes from the decrease in its data centers. Throughout the year, net income grew by 5.5% to RMB10.322.1 million ($ 1,414.1 million). The adjusted Ebitda increased by 13.9% to RMB1.297.7 million per quarter, with a margin of 48.2%.
GDS Holdings Limited (NASDAQ: GDS) executed a milestone transaction on March 10, 2025, which resulted in monetizing a capital interest of 70% in certain data centers to a private reit (P-reit). The transaction was a business value for multiple ebitda of 13 times and produced net cash revenue of RMB5 billion at closing. This movement is aligned with the company’s asset monetization strategy that aims to reduce its net debt to 5-6 times Ebitda for the next 12-24 months. On March 20, 2025, JPMORGAN increased its price for GDS (NASDAQ: GDS) to $ 34.00 from $ 7.50. Analysts maintained a neutral rating.
Generally, GDS Ranks 1st In our list of actions of Seth Klarman’s billionaire, with great potential vice versa. Although we recognize the potential of GDS as an investment, our conviction lies in the belief that AI actions have a greater promise to obtain higher yields and do it in a shorter period. There is an AI stock that increased since the beginning of 2025, while the popular AI actions lost around 25%. If you are looking for a stock of Ia more promising than GDS, but which sells less than five times, see our report on this Stock of AI cheap.
