According to current portfolio statistics, a Premium feature of gurus, four stocks in Seth Klarman (Trades, Portfolio)’s equity portfolio that are trading below Peter Lynch’s earnings line are Liberty Global PLC (LBTYK, Financial)(LBTYA, Financial), Intel Corp. (INTC, Financial), eBay Inc. (EBAY, Financial) and Nexstar Media Group Inc. (NXST, Financial).
Klarman's Boston-based Baupost Group invests in a wide range of securities, including common stock, preferred stock, distressed debt and liquidations. The guru also warned that investing is not just about producing absolute returns, but also paying attention to the risks involved.
Klarman applies a value approach to investing. Legendary Fidelity Magellan Fund manager Peter Lynch formulated a simple rule to measure the relative valuation of a stock: Compare the stock price to an earnings line at 15 times earnings per share. According to Lynch, a stock with a price-earnings ratio less than 15 is considered undervalued.
Klarman owns 53,971,307 Class C shares and 7,657,205 Class A shares of Liberty Global (LBTYK, Financial)(LBTYA, Financial), giving the positions 11.87% and 1.69% weight in his equity portfolio. According to top 10 holdings statistics, a Premium feature, Class C shares Liberty Global represent’s Baupost’s top holding as of the second quarter.
GuruFocus ranks the U.K.-based cable operator’s financial strength 4 out of 10 on the back of a moderately low Altman Z-score of 2.06 and interest coverage and debt ratios that underperform more than 68% of global competitors.
Other gurus with holdings in Liberty Global include Dodge & Cox and Jim Simons (Trades, Portfolio)’ Renaissance Technologies. Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) slashed 74.46% of its holding during the second quarter, selling 5,470,446 Class C shares.
GuruFocus ranks the Santa Clara, California-based semiconductor giant’s profitability 8 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank and an operating margin that has increased approximately 4.70% per year on average over the past five years and is outperforming more than 92% of global competitors.
GuruFocus ranks the San Jose-based retail company’s profitability 7 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and profit margins and returns that outperform more than 95% of global competitors.
Nexstar Media Group
GuruFocus ranks the Irving, Texas-based media company’s profitability 8 out of 10 on several positive investing signs, which include a five-star business predictability rank, a high Piotroski F-score of 8 and an operating margin that is near a 10-year high of 29.82% and outperforms over 94% of global competitors.