This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Stocks Seth Klarman Loves

Genworth Financial

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Genworth Financial (GNW) is another name that Klarman and company like right now. Baupost picked up 15 million shares of the mid-cap insurance firm, taking on just over 3% of Genworth's outstanding shares with an $84.9 million position in the stock. Genworth provides mortgage insurance, life insurance, and more nuanced products like long-term care insurance.

The firm was a unit of General Electric (GE) until 2004, when it was spun-off from the blue chip and sent on its own way. Since initially going public, GNW has seen its shares tumble 72%. (It was one of the 10 Worst-Performing S&P 500 Stocks in the Second Quarter.)

A lot of that poor performance has come from exposure to the worst parts of the market. As a major mortgage insurer, a wave of mortgage defaults meant big payouts and the need to raise capital through dilutive equity offerings and increased debt leverage. While the firm has stabilized itself at this point, GNW isn't out of the woods just yet. Another economic hiccup could spark the need for more capital.

>>5 Financial Stocks Hedge Funds Love

In spite of those challenges, Genworth is at least starting to look cheap right now. While the firm's valuation is in line with peers, GNW was known for being one of the more conservative mortgage underwriters going into the crisis, and increased exposure to international mortgage insurance (rather than housing here at home) makes it an even better risk. And even though the firm had to raise capital after the recession, the debt load is more than tenable right now, especially given the mountains of cash that Genworth threw off in the most recent year.

I'd suggest that risk-averse investors steer clear of this stock -- there are a lot of unknowns that still need to get worked out here. But investors looking for a little more excitement could do worse than following Seth Klarman's lead.

3 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,880.36 -31.75 -0.19%
S&P 500 1,970.07 +0.12 0.01%
NASDAQ 4,462.9020 +20.2040 0.45%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs