We recently published a list of Billionaire Seth Klarman’s 10 Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where WESCO International, Inc. (NYSE:WCC) stands against other billionaire Seth Klarman’s stock picks with huge upside potential.

Seth Klarman is a legendary name in the hedge fund space. He entered Wall Street straight out of college, where he worked as an analyst for Mutual Shares Corporation. Klarman then proceeded to Baupost Group, where he has been ever since. Like most hedge fund managers, Klarman has a set of principles that guide his investment decisions. Most of these principles were captured in a 1991 book titled “Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor.”

Klarman has established himself as the foremost proponent of value investing. In fact, this is the central theme of the 1991 book. He advocates for removing emotions from the investing process and seeing opportunities for what they are.

He writes: “Successful investors tend to be unemotional, allowing the greed and fear of others to play into their hands.”

Also: “There is nothing esoteric about value investing. It is simply the process of determining the value underlying a security and then buying it at a considerable discount from that value.”

READ ALSO: Billionaire Andreas Halvorsen’s 10 Stock Picks With Huge Upside Potential and Billionaire Steve Cohen’s 10 Large-Cap Stock Picks With Huge Upside Potential.

In an interview with the Harvard Business School, Klarman insisted that he is unwilling to abandon value investing for other approaches. He maintained that “value investing is intellectually elegant. You’re basically buying bargains. It also appeals because all the studies demonstrate that it works. People who chase growth, who chase highfliers, inevitably lose because they paid a premium price. They lose to the people who have more patience and more discipline.”

No wonder Baupost is one of the best-performing hedge funds in the world. The fund might have lagged behind giants like Third Point and Elliot in the 2015-2024 period but the ability to stay true to a decades-old strategy and still turn up gains is impressive. Last year, the fund culled approximately 20% of its investing team to try and steer the ship towards larger gains. To this, Klarman commented that “with a somewhat smaller investment team, we have increased the level of energy, focus, accountability, and collaboration.”

And these efforts are already bearing fruit. By December last year, the fund had gained 10%, the first double-digit return since 2021, according to Bloomberg. In other words, after 42 years in the game, Klarman is still able to turn his investment fortunes around. That is why it is prudent to see what stocks are in his portfolio, especially those with a huge upside potential.

Our Methodology

For this list, we combed through Baupost Group’s Q4 2024 SEC 13F filings. We focused only on shares in companies and excluded interests in ETFs and options. From the result, we ranked the stocks in ascending order based on analyst price targets and selected the top 10 companies with the highest upside potential (as of April 29).

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

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WESCO International, Inc. (NYSE:WCC)

Upside Potential as of April 29: 30.94%

Baupost Group’s Stake Value: $259,799,000

WESCO International, Inc. (NYSE:WCC) provides business-to-business distribution, logistics services, and supply chain solutions. The company distributes electrical, industrial, communications, and security maintenance, repair, and operations (MRO) products. It serves customers in industrial, utility, commercial, institutional, and government markets across more than 50 countries worldwide.

WESCO International, Inc. (NYSE:WCC) returned to sales growth in Q4 2024. Net sales grew by 0.5% year-over-year to $5.5 billion, and organic sales increased by 2.4%. According to management, this growth came on the back of over 70% expansion in the company’s global Data Center business and 20% growth in Broadband Solutions. The company generated $21.8 billion in net sales for the full year 2024. The corporation is making significant progress on its enterprise-wide digitalization efforts and business transformation.

According to CEO John Engel, the company is more than halfway complete on its technology and capabilities build. This is expected to accelerate earnings growth through greater cross-selling, and expand margins through improved pricing and operating cost leverage. For 2025, management expects organic sales to grow 2.5% to 6.5%, operating margin to expand, and free cash flow between $600-800 million.

On March 17, 2025, KeyBanc Capital Markets adjusted its price target for WESCO International, Inc. (NYSE:WCC) to $205 from $245 while maintaining an Overweight rating. Despite this reduction, analyst Ken Newman remains optimistic about WESCO’s prospects, highlighting the company’s improving capital structure and attractive valuation compared to peers.

Overall, WCC ranks 7th on our list of billionaire Seth Klarman’s stock picks with huge upside potential. While we acknowledge the potential of WCC as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than WCC but that trades at less than 5 times its earnings check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.