In this article, we will take a look at the 10 stocks to sell according to billionaire Dan Loeb. To skip our analysis of Dan Loeb’s profile, investment strategy, and 13F holdings, you can go directly to see the 5 Stocks to Sell According to Billionaire Dan Loeb.
Daniel Seth Loeb is the CEO and Chief Investment Officer of Third Point LLC, a New York-based asset management firm founded in 1995. With a net worth estimated $3.5 billion and three decades of investment expertise, Dan Loeb is famous for launching activist campaigns against corporate boards of companies across various industries and countries.
Dan Loeb graduated from the Columbia University with a bachelor’s degree in Economics in 1983 and founded Third Point LLC in 1995 to pursue his activist brand of investing. He has served on the board of five publicly traded companies, Ligand Pharmaceuticals, POGO Producing Co., Massey Energy, Yahoo!, and Sotheby’s.
Third Point employs an event-driven, value-oriented investment style and seeks to identify situations where a catalyst could unlock value. The hedge fund focuses on delivering exceptional risk adjusted returns with limited market exposure and had $13.9 billion in assets under management as of July 31, 2022. Third Point’s activist investment approach has generated strong results in the past. As of June 30, its flagship offshore fund, Third Point Offshore Fund, Ltd., had an annualized return of 13.7% since its inception in December 1996.
As of Q2 2022, Dan Loeb’s Third Point’s 13F portfolio is valued at $4.2 billion and comprised 79 total positions. During the quarter, the hedge fund added 4 new positions, increased exposure to 8 positions, decreased exposure to 35 positions and completely disposed of 21 positions. The 10 stocks to sell according to billionaire Dan Loeb accounted for 24.24% of the portfolio weight in Q1 2022.
Recent bloodbath in the equity market, caused by rising inflation and interest rate hikes, is raising concerns about further investments in the market. Talking about the recent market situation, Dan Loeb said in his Q2 investor letter:
“During the second quarter, we significantly reduced risk and took steps to protect capital in a tumultuous market with an uncertain economic backdrop driven by inflation pressures, the prospect of significantly higher interest rates, geopolitical instability, supply chain disruptions, a likely recession in Europe, and a possible recession domestically.”
Methodology
We went through the regulatory filings of Dan Loeb’s Third Point LLC for the first and second quarters of 2022 and identified the stocks in the portfolio that were disposed of by the hedge fund during the second quarter. We have taken the top 10 stocks from the portfolio and have ranked them #10 to #1 based on the portfolio weight of each stock in Q1 2022.
10 Stocks to Sell According to Billionaire Dan Loeb
10. Leslie’s, Inc. (NASDAQ:LESL)
Third Point’s Stake Value in Q1 2022: $58,080,000
Percentage of Third Point’s 13F Portfolio in Q1 2022: 0.75%
Number of Hedge Fund Holders: 19
Phoenix, Arizona-based Leslie’s, Inc. (NASDAQ:LESL) is one of the world’s largest retailers of swimming pool supplies with more than 975 physical locations and multiple digital platforms. It offers pool and spa chemicals, pool cleaners, pool equipment, cleaning accessories, and pool inflatables and floats.
As of Q1 2022, Dan Loeb’s Third Point owned 3,000,000 shares of Leslie’s, Inc. (NASDAQ:LESL), accounting for 0.75% of its 13F portfolio. The hedge fund shed 50% of its stake in the company in Q1 2022, compared to the previous quarter. The hedge fund exited its entire position in the stock during Q2 2022.
In August, Leslie’s, Inc. (NASDAQ:LESL) released its financial results for the quarter ended July 2, 2022. Its revenue increased by 13% y-o-y to $674 million, while net income increased by 4% y-o-y to $123 million. It recorded a normalized EPS of $0.68 for the quarter, missing the analyst consensus by $0.06.
On October 3, MKM Partners analyst David Bellinger initiated coverage of Leslie’s, Inc. (NASDAQ:LESL) with a ‘Neutral’ rating and a $14 price target for the shares.
As of Q2 2022, 19 of the 895 hedge funds tracked by Insider Monkey owned shares of Leslie’s, Inc. (NASDAQ:LESL), valued at $127 million. Its largest shareholder was Amy Minella’s Cardinal Capital with ownership of 3.2 million shares valued at $49 million.
Like Microsoft Corporation (NASDAQ:MSFT), Zendesk, Inc. (NYSE:ZEN), and S&P Global Inc. (NYSE:SPGI), Dan Loeb’s Third Point exited out of Leslie’s, Inc. (NASDAQ:LESL) in Q2.
9. Ingersoll Rand Inc. (NYSE:IR)
Third Point’s Stake Value in Q1 2022: $76,784,000
Percentage of Third Point’s 13F Portfolio in Q1 2022: 0.99%
Number of Hedge Fund Holders: 28
Davidson, North Carolina-based Ingersoll Rand Inc. (NYSE:IR) is a global market leader with a broad range of air, fluid, energy, and medical technologies. It manufactures compressor, pump, vacuum, and blower products sold are sold under more than 40 market-leading brands, including Ingersoll Rand and Gardner Denver.
Dan Loeb’s Third Point owned 1,525,000 shares of Ingersoll Rand Inc. (NYSE:IR), accounting for 0.99% of its 13F portfolio, as of Q1 2022. The stock was a new addition to Third Point’s portfolio in Q1 2022 and the hedge fund exited its entire position in the stock during Q2 2022.
In August, Ingersoll Rand Inc. (NYSE:IR) released its financial results for the second quarter of 2022. Its revenue increased by 13% y-o-y to $1.4 billion, while net income declined by 41% y-o-y to $139 million. It generated a normalized EPS of $0.54 for the quarter, exceeding the consensus by $0.02.
On October 6, Ingersoll Rand Inc. (NYSE:IR) announced that it had agreed to acquire SPX FLOW’s Air Treatment business for $525 million. The Air Treatment business manufactures desiccant and refrigerated dryers, filtration systems and purifiers for dehydration in compressed air with manufacturing facilities in the U.S., Germany, and South Korea.
Earlier on October 3, Barclays analyst Julian Mitchell lowered the price target on Ingersoll Rand Inc. (NYSE:IR) shares to $57 from $59 but maintained an ‘Overweight’ rating for the shares.
As of Q2 2022, 28 hedge funds tracked by Insider Monkey held shares of Ingersoll Rand Inc. (NYSE:IR), worth $434 million. Henry Ellenbogen’s Durable Capital Partners was the largest shareholder in the company with ownership of 4.6 million shares valued at $193 million.
8. The Mosaic Company (NYSE:MOS)
Third Point’s Stake Value in Q1 2022: $85,120,000
Percentage of Third Point’s 13F Portfolio in Q1 2022: 1.10%
Number of Hedge Fund Holders: 50
The Mosaic Company (NYSE:MOS) is a leading integrated producer of concentrated phosphate and potash. It engages in every phase of crop nutrition, from the mining of resources to the production of crop nutrients, feed, and industrial products for customers around the globe.
The Mosaic Company (NYSE:MOS) was added to Dan Loeb’s Third Point portfolio during Q1 2022. The hedge fund had accumulated ownership of 1,280,000 shares of the company accounting for a portfolio weight of 1.35%. The hedge fund exited its entire position in the stock during Q2 2022.
In August, The Mosaic Company (NYSE:MOS) released the financial results for the second quarter of 2022. Its revenue increased by 92% y-o-y to $5.4 billion, while its net income surged by 137% y-o-y to $1.04 billion. It reported a normalized EPS of $3.64 for the quarter, missing the consensus by $0.36. It also declared a quarterly cash dividend of $0.15 per share.
On October 4, Citi analyst P. J. Juvekar lowered the price target on The Mosaic Company (NYSE:MOS) shares to $58 from $61 but maintained a ‘Buy’ rating on the shares.
As of Q2 2022, 50 hedge funds owned shares of The Mosaic Company (NYSE:MOS), valued at $896 million. Soroban Capital Partners is its largest shareholder with ownership of 6.7 million shares valued at $318 million.
7. Suncor Energy Inc. (NYSE:SU)
Third Point’s Stake Value in Q1 2022: $114,120,000
Percentage of Third Point’s 13F Portfolio in Q1 2022: 1.48%
Number of Hedge Fund Holders: 47
Calgary, Alberta-based Suncor Energy Inc. (NYSE:SU) is an integrated energy company with operations across oil sands development, production and upgrading, offshore oil and gas production, petroleum refining in Canada and the United States and its Petro-Canada retail and wholesale distribution networks.
Suncor Energy Inc. (NYSE:SU) was added to the 13F portfolio of Third Point in Q1 2022 with ownership of 3,500,000 shares accounting for 1.48% of its portfolio. The hedge fund exited its entire position in the stock during Q2 2022.
In August, Suncor Energy Inc. (NYSE:SU) reported the financial results for the quarter ended July 31, 2022. Its revenue increased by 70% y-o-y to $12.5 billion, while it generated a net income of $3.1 billion. It reported a normalized EPS of $2.11 for the quarter, beating the consensus by $0.02.
On August 8, Credit Suisse analyst William Janela assumed coverage of Suncor Energy Inc. (NYSE:SU) with an ‘Outperform’ rating and unchanged price target of C$63.
According to the Insider Monkey data on 895 leading hedge funds, 47 hedge funds were long Suncor Energy Inc. (NYSE:SU) shares as of Q2 2022, with the total shares held by hedge funds valued at $2.4 billion. Arrowstreet Capital was the largest shareholder on record with ownership of 16.6 million shares valued at $583 million.
6. Rivian Automotive, Inc. (NASDAQ:RIVN)
Third Point’s Stake Value in Q1 2022: $153,060,000
Percentage of Third Point’s 13F Portfolio in Q1 2022: 1.99%
Number of Hedge Fund Holders: 35
Rivian Automotive, Inc. (NASDAQ:RIVN), based in Irvine, California, designs, develops, and manufactures category-defining electric vehicles and accessories and sells them directly to customers. It has launched three vehicles so far, R1T and R1S adventure vehicles, and EDV – an electric delivery van custom-designed for Amazon.
Dan Loeb’s Third Point became bearish on its investment in Rivian Automotive, Inc. (NASDAQ:RIVN) shares and shed 25% of its stake in Q1 2022 compared to the previous quarter, bringing the number of shares owned by the hedge fund to 3,046,574 with a portfolio weight of 1.99%. The hedge fund exited its entire position in Q2 2022.
On October 3, Rivian Automotive, Inc. (NASDAQ:RIVN) released its production results for Q3 2022. The company produced 7,363 vehicles and delivered 6,584 vehicles during the period and affirmed its 25,000 vehicles annual production guidance announced previously.
Following the announcement, Truist analyst Jordan Levy reiterated his stance on Rivian Automotive, Inc. (NASDAQ:RIVN) shares and maintained a $65 price target and a ‘Buy’ rating on the shares. The analyst said that even though “the company’s Q3 production numbers missed expectations, the affirmed FY22 target is the more important component of the release.”
As of Q2 2022, Rivian Automotive, Inc. (NASDAQ:RIVN) shares were held by 35 of the 895 hedge funds tracked by Insider Monkey, valued at $1.6 billion. Phillipe Laffont’s Coatue Management was the largest shareholder in the company with ownership of 18.9 million shares valued at $486 million.
Dan Loeb’s Third Point also exited out of Microsoft Corporation (NASDAQ:MSFT), Zendesk, Inc. (NYSE:ZEN), and S&P Global Inc. (NYSE:SPGI).
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5. Microsoft Corporation (NASDAQ:MSFT)
Third Point’s Stake Value in Q1 2022: $154,155,000
Percentage of Third Point’s 13F Portfolio in Q1 2022: 2.00%
Number of Hedge Fund Holders: 258
Redmond, Washington-based Microsoft Corporation (NASDAQ:MSFT) is a leading technology company with products include operating systems, cross-device productivity applications, server applications, business solution applications, desktop and server management tools, software development tools, and video games. Microsoft Corporation (NASDAQ:MSFT) boasts over 1.4 billion monthly active devices running its flagship operating system, Windows 10 or 11.
Dan Loeb’s Third Point’s held 500,000 shares of Microsoft Corporation (NASDAQ:MSFT), accounting for 2.0% of its 13F portfolio, as of Q1 2022. The hedge fund shed its stake by 69% during Q1 2022, compared to the previous quarter and disposed of the remaining shares in Q2 2022.
On September 20, board of directors of Microsoft Corporation (NASDAQ:MSFT) declared a quarterly dividend of $0.68 per share, reflecting a 10% increase over the previous quarter’s dividend. Following the announcement, Morgan Stanley analyst Keith Weiss said the dividend hike highlights the stock’s “durable high-teens total return profile” when factored along with Microsoft’s high-teens percentage EPS growth. The analyst maintains an ‘Overweight’ rating and a price target of $354 for the shares.
As of Q2 2022, Microsoft Corporation (NASDAQ:MSFT) is the most sought-after stock among the 895 hedge funds tracked by Insider Monkey as 258 of these hedge funds held shares in the software giant, valued at $56 billion. Ken Fisher’s Fisher Asset Management was its largest hedge fund shareholder with ownership of 28.7 million shares valued at $7.4 billion.
4. Zendesk, Inc. (NYSE:ZEN)
Third Point’s Stake Value in Q1 2022: $228,551,000
Percentage of Third Point’s 13F Portfolio in Q1 2022: 2.97%
Number of Hedge Fund Holders: 63
Zendesk, Inc. (NYSE:ZEN) is a service-first customer relationship management company allowing organizations to deliver omnichannel customer service and customize and build apps across the customer journey. It boasts more than 160,000 paid customer accounts across 160 countries and territories.
Dan Loeb’s Third Point’s held 1,900,000 shares of Zendesk, Inc. (NYSE:ZEN), accounting for 2.97% of its 13F portfolio, as of Q1 2022. The hedge fund increased its stake in the company by 46% during the first quarter and exited its entire position in the stock during Q2 2022.
On September 19, Zendesk, Inc. (NYSE:ZEN) shareholders approved the merger agreement for the acquisition of Zendesk, Inc. (NYSE:ZEN) by a consortium led by Hellman & Friedman and Permira after a lengthy strategic review process of the company. The transaction comprises a cash consideration of $77.50 per common share and values the entire equity of the company at $10.2 billion.
As of Q2 2022, 63 of the 895 hedge funds tracked by Insider Monkey held Zendesk, Inc. (NYSE:ZEN) shares valued at $1.9 billion. Glen Kacher’s Light Street Capital is its biggest shareholder.
3. IQVIA Holdings, Inc. (NYSE:IQV)
Third Point’s Stake Value in Q1 2022: $254,331,000
Percentage of Third Point’s 13F Portfolio in Q1 2022: 3.31%
Number of Hedge Fund Holders: 53
Research Triangle Park, North Carolina-based IQVIA Holdings, Inc. (NYSE:IQV) is a leading global provider of advanced analytics, technology solutions, and clinical research services to the life sciences industry. It operates in more than 100 countries.
As of Q1 2022, Dan Loeb’s Third Point owned 1,100,000 shares of IQVIA Holdings, Inc. (NYSE:IQV), accounting for 3.31% of the hedge fund’s 13F portfolio. The hedge fund shrunk its stake in the company by 17% in Q1 2022 and dumped the rest of the stake in the second quarter.
On October 6, Barclays analyst Luke Sergott lowered the price target on IQVIA Holdings, Inc. (NYSE:IQV) shares to $215 from $235 but maintained an ‘Overweight’ rating on the shares. The analyst believes there is a potential for guide-downs and misses based on currency fluctuations for the life science tools and diagnostics group.
As of Q2 2022, 53 of the 895 hedge funds tracked by Insider Monkey held IQVIA Holdings, Inc. (NYSE:IQV) shares, valued at a combined total of $2.8 billion. Thomas Steyer’s Farallon Capital was its largest hedge fund shareholder with ownership of 3.2 million shares valued at 697 million.
2. Intuit Inc. (NASDAQ:INTU)
Third Point’s Stake Value in Q1 2022: $348,609,000
Percentage of Third Point’s 13F Portfolio in Q1 2022: 4.53%
Number of Hedge Fund Holders: 75
Intuit Inc. (NASDAQ:INTU) is a global financial technology platform allowing consumers and small businesses to manage their finances, get and retain customers, save money, pay off debt and do their taxes with ease, among other solutions. Its platforms include TurboTax, Credit Karma, QuickBooks, and Mailchimp and serve over 100 million customers.
Intuit Inc. (NASDAQ:INTU) was ranked #5 on Third Point’s 13F portfolio based on its weight of 4.53%, as of Q1 2022. The hedge fund held 725,000 shares of Intuit Inc. (NASDAQ:INTU), 37% less than the number of shares held at the end of the previous quarter. The hedge fund exited its entire position in the stock during Q2 2022.
In August, Intuit Inc. (NASDAQ:INTU) released its financial results for the quarter ended July 31, 2022. Its total revenue decreased by 6% y-o-y to $2.4 billion, while it reported a net loss of $56 million. It reported a normalized EPS of $1.10 for the quarter, $0.12 more than the analyst consensus. The company also declared a quarterly cash dividend of $0.68 per share.
On October 3, JPMorgan analyst Mark Murphy downgraded Intuit Inc. (NASDAQ:INTU) shares to ‘Neutral’ from ‘Overweight’ with a $360 price target.
As of Q2 2022, 75 of the 895 hedge funds tracked by Insider Monkey held Intuit Inc. (NASDAQ:INTU) shares valued at a combined total of $5.4 billion. Terry Smith’s Fundsmith LLP was its largest hedge fund shareholder with ownership of 2.4 million shares valued at $914 million.
1. S&P Global Inc. (NYSE:SPGI)
Third Point’s Stake Value in Q1 2022: $393,773,000
Percentage of Third Point’s 13F Portfolio in Q1 2022: 5.12%
Number of Hedge Fund Holders: 84
S&P Global Inc. (NYSE:SPGI) is a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide.
As of Q1 2022, Dan Loeb’s Third Point owned 960,000 shares of S&P Global Inc. (NYSE:SPGI), accounting for 5.12% of its 13F portfolio. The hedge fund shed 4% of its stake in Q1 2022, as compared to the previous quarter and exited its remaining position in the stock during Q2 2022.
In August, S&P Global Inc. (NYSE:SPGI) released its financial results for the second quarter of 2022. Its total revenues increased by 42% y-o-y to $3.0 billion, while its net income increased by 20% y-o-y to $1.0 billion. It reported a normalized EPS of $2.81 for the quarter, missing the consensus by $0.12.
On September 28, the board of directors of S&P Global Inc. (NYSE:SPGI) declared a regular quarterly cash dividend of $0.85 per common share. The company has paid regular dividends since 1937 and has increased its dividends annually for at least the last 49 years.
As of Q2 2022, S&P Global Inc. (NYSE:SPGI) shares were held by 84 of the 895 hedge funds tracked by Insider Monkey, with a total value of $7.2 billion. Chris Hohn’s TCI Fund Management was its largest hedge fund shareholder with ownership of 8.8 million shares valued at $3.0 billion.
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Disclosure: None. 10 Stocks to Sell According to Billionaire Dan Loeb is originally published on Insider Monkey.
