Every quarter, funds with over USD 100 million under management are required to disclose their US equity holdings in a 13-F regulatory filing. This gives the outside world a chance to see what some of the world’s most famous investors have been buying and selling.

Warren Buffett’s moves every quarter are covered extensively (you can see our summary of his latest activity here). In this article, though, we’re going to cast the net wider and look at some shares bought by three other high-profile investors recently.

But first, a couple of warnings:

  1. You shouldn’t consider buying any stock or fund until you’ve worked out your broader investing strategy. Go here for a step-by-step guide to doing that.

  2. We can see a manager’s 13-F filing but we cannot read their mind. We don’t know why they bought a stock and we don’t know what their plan for it is. Borrowing somebody else’s conviction is rarely a good idea – doubly so if this is based purely on a stock showing up in their portfolio.

The three famous investors we’re going to look at are Michael Burry, Bill Ackman and Seth Klarman.

Michael Burry

Michael Burry is famous for being played by Christian Bale in the Big Short.

Burry’s quarterly 13-F filing is always one of the most followed and you usually know roughly what to expect: contrarian holdings, big position sizes and lots of activity.

In other words, don’t be surprised if some of these holdings have been sold by the time his next filing is made.

Of the stocks in our coverage, two of Burry’s biggest buys were additions to Chinese tech names Alibaba and Baidu. Both shares were already in Burry’s portfolio. As of the filing date, they were his fund’s top and fourth-biggest positions.

These holdings are hardly surprising given Burry’s contrarian nature. After all, they fit with what I recently highlighted as the world’s most hated investment theme. Our analysts think that both shares are undervalued.

Alibaba ADR (NYS: BABA)

  • Moat Rating: Wide Moat
  • Star Rating: ★★★★
  • Fair Value Estimate: USD 100 per ADR

Alibaba comprises of several businesses including its core e-commerce platform businesses Taobao, Tmall and AliExpress, its cloud computing segment AliCloud and a 31% stake in financial technology provider Ant Financial (formerly Alipay).

Alibaba’s ecommerce marketplace businesses Taobao and Tmall have been losing share to Pinduoduo parent company PDD and Douyin. Our Alibaba analyst Chelsey Tam doesn’t see a quick fix for this, but thinks the shares are undervalued at current levels.

Her current Fair Value estimate of USD 100 per ADR is underpinned by an average of 3% yearly growth in adjusted profits over the next decade. There could be further upside if Alibaba can prove its ability to stop the slide in market share for its Taobao and Tmall e-commerce products, while improving margins and expediting its capital return to shareholders. Tam also notes that BABA’s net cash and liquid investments account for around half of its current market capitalisation.

Alibaba’s ADR was a surprise inclusion in the top 10 US-listed shares held by Morningstar Investor users. Go here to see the other nine.

Baidu ADR (NAS: BIDU)

  • Moat Rating: Wide Moat
  • Star Rating: ★★★★★
  • Fair Value estimate: USD 165 per ADR

Baidu is essentially the Chinese Google. Baidu’s online advertising business centres on its dominant market share in Chinese internet search. As more competition for ad dollars has emerged in the shape of players like Tencent and ByteDance, Baidu has increasingly shifted its focus toward its cloud business and - more recently - its flagship AI model Ernie.

Our Baidu analyst Kai Wang recently reduced his Fair Value estimate for the shares by 5% to USD 165 per ADR as he expects China’s weak economic outlook to weigh on Baidu’s advertising business. Strength in Baidu’s cloud and AI segments, however, could offset some of this.

Kai expects revenue in Baidu’s cloud business to rise 15% year-on-year in the second half of 2024, with mid-teens growth in 2025 possible. At USD 90 per ADR, Baidu trades well below Wang’s Fair Value estimate and command a five-star rating.

Bill Ackman

Bill Ackman is the founder and CEO of hedge fund Pershing Square. It's been a busy few months for Ackman, including attempts to float Pershing Square USA and take one of his biggest holdings private in a takeover deal.

Despite this, Ackman still had time to add a couple of new holdings to Pershing’s portfolio. One of those stocks was Nike.

Nike (NYS: NKE)

  • Economic Moat: Wide Moat
  • Star Rating: ★★★★★
  • Fair Value Estimate: USD 124

Nike shares have fallen by more than a third in the past year. The main catalyst for this fall was the weak outlook given in Nike’s June earnings report, but the company has been out of favour for a while.

Economic conditions have been less than ideal, especially in China, which is expected to be a fast-growing market for sportswear. Meanwhile, investors are also concerned that Nike has become less innovative than new competitors like On and Hoka. So far, Nike’s increased focus on direct-to-consumer channels like e-commerce and Nike stores also hasn’t worked as well as hoped.

As he told me in a recent interview, Morningstar’s David Schwarz still believes that Nike is a wide moat company with big advantages in terms of visibility, product development, and distribution. Nike leads sportswear market share in most of the world’s major countries and is still very strong in basketball, running shoes and many other areas. All in all, it is the only sportswear company that Morningstar currently assign a Wide Moat rating.

By fiscal year 2026, Schwarz thinks that Nike can get back to sales growth as demand in its markets improves and new product releases drive sales. Schwarz also thinks that Nike has great opportunities in China and other developing economies such as Africa and India, where incomes are rising, populations are young, and the brand is already well known. Meanwhile, cost cuts should improve profitability and Nike’s direct-to-consumer efforts could help further on this front.

Nike shares have recovered recently to around USD 84 but still trade significantly lower than Schwarz’s Fair Value estimate of USD 124. In a potential silver lining for Nike shareholders, weakness in the shares over the past year could allow the company to execute large repurchases at lower prices than before. Nike management has historically used buybacks as the primary method of returning cash to shareholders.

Seth Klarman

Among other things, Seth Klarman is famous for being the man behind Margin of Safety – a classic investing book that became a collector’s item due to the small number of copies published.

Klarman has built his reputation over several years at Baupost, and his fund established several new positions in the latest quarter. These included health insurer Humana and domain registry business Verisign. Both shares currently command four-star Morningstar ratings.

Humana (NYS: HUM)

  • Moat Rating: Narrow Moat
  • Star Rating: ★★★★
  • Fair Value Estimate: USD 473

Humana is a leading provider of Medicare Advantage (MA) health insurance in the US. Under this arrangement, insurers like Humana are paid a fixed fee per policyholder by the government to provide policies equivalent to federal health insurance. The insurer can then make a profit by providing care more efficiently or by encouraging healthier choices for members that reduce the need for care altogether.

Humana shares have suffered from the company pricing its plans incorrectly in 2024 as the strong post-pandemic recovery in elective surgeries continued. Morningstar’s Julie Utterback thinks that a rebound in profits and cash flows looks likely in 2025 and beyond as Humana reprices its plans. However, that growth may be pressured a bit for the foreseeable future as growth in MA policyholders slows.

Utterback has awarded Humana a Narrow Moat rating. The company is generally the biggest or second biggest provider of Medicare Advantage insurance in territories it operates within – sometimes accounting for a third of members in a county. This gives Humana significant bargaining power with local service providers which provides it with a cost advantage.

In areas where Humana is especially dominant, this can translate into a network effect as more policyholders are attracted by the offer of cheaper or more available services. In turn, the growing number of policy holders attracts further service providers while also boosting Humana’s bargaining power further.

Utterback’s Fair Value estimate of USD 473 per share assumes that Humana can grow its revenue at an average of 7% per year through 2028 while improving earnings by an average of 5% per year. At a recent price of USD 353 per share, the stock screens as undervalued.

Verisign (NAS: VRSN)

  • Moat Rating: Wide Moat
  • Star Rating: ★★★★
  • Fair Value Estimate: USD 195

Verisign provides registry services for several top-level domains, or TLDs, and infrastructure essential to the functioning of the internet. Verisign plays a vital role in supporting the Domain Name System, or DNS, which is akin to a massive address book that matches human friendly domain names to the accompanying numbers-based Internet Protocol, or IP, address.

Verisign has exclusive registry rights for .com and .net internet domains under renewable contracts with the Internet Corporation for Assigned Names and Numbers, or ICANN. These exclusive contracts – which feature the right to raise prices up to a set amount in the final four years – run for six years at a time and have a presumptive right of renewal, provided Verisign meets its contractual obligations.

Morningstar’s Emma Williams expects Verisign will continue to meet its contractual obligations and for the registry agreements to renew into perpetuity, underpinning her Wide Moat rating. The company has provided uninterrupted DNS services for over 27 years and continues to invest in infrastructure and cybersecurity measures to mitigate the risk of service disruptions.

Verisign shares have been weak recently amid weaker than usual demand for .com and .net domains in China and the US. Williams thinks the shares are worth $195 per share, assuming 5% annual revenue growth over the next five years. At a current share price of around $179, they screen as modestly undervalued.

Remember—individual shares should only be considered as part of a deliberate investing strategy. Go here to see a step-by-step guide to building your strategy.

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Terms used in this article

Star Rating: Our one- to five-star ratings are guideposts to a broad audience and individuals must consider their own specific investment goals, risk tolerance, and several other factors. A five-star rating means our analysts think the current market price likely represents an excessively pessimistic outlook and that beyond fair risk-adjusted returns are likely over a long timeframe. A one-star rating means our analysts think the market is pricing in an excessively optimistic outlook, limiting upside potential and leaving the investor exposed to capital loss.

Fair Value: Morningstar’s Fair Value estimate results from a detailed projection of a company's future cash flows, resulting from our analysts' independent primary research. Price To Fair Value measures the current market price against estimated Fair Value. If a company’s stock trades at $100 and our analysts believe it is worth $200, the price to fair value ratio would be 0.5. A Price to Fair Value over 1 suggests the share is overvalued.

Moat Rating: An economic moat is a structural feature that allows a firm to sustain excess profits over a long period. Companies with a narrow moat are those we believe are more likely than not to sustain excess returns for at least a decade. For wide-moat companies, we have high confidence that excess returns will persist for 10 years and are likely to persist at least 20 years. To learn more about how to identify companies with an economic moat, read this article by Mark LaMonica.