Forget AI: Legendary Value Investor Seth Klarman Is Buying These 10 Value Stocks in 2026
Bloomberg reported that Seth Klarman’s Baupost Group delivered about 20% annualized returns over its first 26 years, but about 4% annualized from 2014-2024, with roughly $7 billion in client withdrawals from 2021-2025. The firm is refocusing on distressed debt and special situations. The article highlights Baupost stakes in DNOW ($43.2M), NCLH ($67.9M), and MOH ($84.5M), citing DNOW’s $2.22B post-MRC deal scale, NCLH’s Q1 2026 profit ($104.7M), and MOH’s Q1 2026 adjusted EPS of $2.35 vs $1.29 co
How this was made
The 30-second read
Why it matters
It provides company-specific thesis bullets (DNOW’s post-merger issues and data-center pivot; NCLH’s profitability recovery and turnaround plan; MOH’s Medicaid margin trough recovery with an EPS beat). However, it is not a primary-source earnings/regulatory update within the article—most details are framed as investment theses and portfolio context.
Market read
Traders can use the article as a thematic watchlist for value/turnaround/Medicaid cyclicality, but it offers limited truly new, time-sensitive information beyond the cited company-specific metrics.
What to watch
For DNOW, the durability of data-center cooling demand vs broader industrial cyclicality is unclear; for NCLH, debt maturity and fuel/cost inflation sensitivity could overwhelm cost savings; for MOH, Medicaid rate-setting and medical cost trend timing could reverse the margin trough narrative.
Background
The piece profiles Seth Klarman/Baupost’s value approach and then lists 10 holdings from Baupost’s Q1 portfolio, emphasizing low P/E and “old-economy” exposure.
Ticker impact
Article highlights DNOW’s post-merger pressure (accounting charges, Oracle ERP issues) and frames data-center cooling as a new growth vector.
Near-term price action likely depends on whether investors believe the data-center customer ramp offsets merger-related drag.
The text provides concrete post-deal issues and a quantified customer ramp (0→11 customers), but it’s still a promotional/strategy framing rather than a fresh filing or print.
Article cites NCLH returning to profitability in Q1 2026 and points to a CEO turnaround plan ($125m cost savings) amid heavy debt.
Stock sensitivity likely remains high to execution on cost cuts and cash flow/leverage progress.
The article includes specific operational metrics (Q1 revenue/net income, occupancy expectation, cost savings), but it does not present a new earnings/guidance release within the article itself.
Article states MOH’s Q1 2026 adjusted EPS surged to $2.35 vs $1.29 consensus, attributing it to margin trough recovery in 2026.
If the margin recovery thesis holds, further upside could follow; otherwise, the stock may revert on Medicaid rate/cost dynamics.
The text provides a concrete earnings datapoint (EPS $2.35 vs $1.29) and a clear catalyst narrative (Medicaid rate adjustments and cost cycle), making it actionable for positioning.
Market effects
Supports a read-across that value investors are rotating toward industrial distributors (DNOW), travel/turnarounds (NCLH), and managed care Medicaid cyclicality (MOH) rather than AI/mega-cap growth.
No explicit regional macro linkage beyond general rate/market regime discussion.
Limited; cruise and healthcare are globally exposed but the article provides no cross-border policy or demand shock.
Counterpoint
The article is a listicle/strategy piece: it may over-weight “value” framing while underplaying that merger/ERP execution (DNOW) and leverage/cost execution (NCLH) remain key risks; MOH’s recovery could be rate-cycle dependent.
Key entities
- personSeth Klarman
Value investor and founder of The Baupost Group; the article uses his 2026 buying thesis as the framing.
- asset_managerThe Baupost Group
Klarman’s firm; the article claims it narrowed focus to distressed/special situations and highlights Q1 portfolio holdings.
