10 Stocks to Sell in 2023 According to Billionaire Steve Cohen

In this article, we discuss 10 stocks to sell in 2023 according to billionaire Steve Cohen.

Point72 Asset Management of billionaire Steve Cohen recently disclosed its Q1 holdings. The fund’s portfolio worth stood at $32.29 billion by the end of March 2023, up 9.74% from its the previous quarter.

Bloomberg cited Steve Cohen on May 17, who said that investors’ excessive concern about a potential market decline is causing them to overlook the significant opportunities presented by artificial intelligence. He believes that being overly preoccupied with the probability of a recession might cause them to miss out on the substantial potential for growth and success. Cohen emphasized the importance of recognizing and capitalizing on the “big wave” of opportunities that arise from advancements in artificial intelligence. 

Cohen expressed his belief that the emerging field of artificial intelligence will likely generate new employment opportunities. Although he expressed concerns about the potential displacement of certain jobs, he anticipates that overall profit margins will improve. This improvement would alleviate the need for the Federal Reserve to implement further interest rate hikes as a measure to control inflation. As a result, Cohen expects that such a scenario would positively impact the markets and contribute to their growth. Steve Cohen said he is “actually pretty bullish”. 

Institutional Investor estimated that Steve Cohen, the founder of Point72 Asset Management and owner of the New York Mets, generated personal capital gains of over $1.7 billion from his hedge fund last year. The hedge fund itself achieved a net gain of approximately 10% in 2022. It is worth noting that this estimation does not account for the founder’s share of the fees generated by the hedge fund, implying that his total earnings were likely even higher than the reported figure.

In Q1 2023, Steve Cohen’s hedge fund acquired 1182 new stocks, sold off 469 stocks entirely, made additional purchases in 368 stocks, and reduced holdings in 505 stocks. Some of the popular stocks the billionaire dumped include Tesla, Inc. (NASDAQ:TSLA), The Walt Disney Company (NYSE:DIS), and Apple Inc. (NASDAQ:AAPL). 

Our Methodology 

For this list, we selected the most popular stocks removed from billionaire Steve Cohen’s 13F portfolio during the first quarter of 2023. Cohen’s fund sold its entire stakes in these companies in the March quarter. The stocks are ranked in ascending order of the number of hedge fund holders in each firm as of Q4 2022. 

Stocks to Sell in 2023 According to Billionaire Steve Cohen

10. Albemarle Corporation (NYSE:ALB)

Number of Hedge Fund Holders: 46

Albemarle Corporation (NYSE:ALB) specializes in the development, production, and distribution of specialized chemicals for various industries. The company is divided into three main segments – Lithium, Bromine, and Catalysts. In Q4 2022, Steve Cohen owned 64,962 shares of Albemarle Corporation, worth $14 million. In Q1 2023, the billionaire disposed of his entire stake in the company. He also discarded his stakes in Tesla, Inc., The Walt Disney Company, and Apple Inc..

On May 11, KeyBanc last night upgraded Albemarle Corporation to Overweight from Sector Weight with a $270 price target. The analyst believes that the risk/reward ratio for lithium has improved following the company’s recent earnings report. They anticipate an upturn in demand for lithium in China, which has been experiencing a downturn since November 2022. According to channel checks conducted within the Chinese lithium industry, inventories at the battery cell and electric vehicle levels are declining and expected to reach a low point in the next few months. The analyst suggests that this could lead to a resumption of purchase orders from major buyers in the near future.

According to Insider Monkey’s fourth quarter database, 46 hedge funds were bullish on Albemarle Corporation, compared to 49 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is the biggest stakeholder of the company.

Carillon Tower Advisors made the following comment about Albemarle Corporation in its Q4 2022 investor letter:

“Albemarle Corporation (NYSE:ALB) is a global specialty chemicals company with leading positions in lithium, bromine, and refining catalysts. The stock gave back some of its recent gains amid investor concerns about how the future price of lithium could be affected by a potential decelerating rate of growth in overall electric vehicle (EV) production and demand, primarily in China. Despite these potential near-term headwinds, longer-term the global lithium market remains tight, and Albemarle plays a critical role in the battery value chain and remains well-positioned for the overall continued global adoption of EVs.”

9. Airbnb, Inc. (NASDAQ:ABNB)

Number of Hedge Fund Holders: 54

Airbnb, Inc. (NASDAQ:ABNB) operates a platform that allows hosts worldwide to offer accommodations and experiences to guests. Using a marketplace model, the company’s platform enables hosts and guests to connect and book spaces and experiences online or through mobile devices. In Q4 2022, Cohen owned 314,926 shares of Airbnb, Inc. worth nearly $27 million, which he sold in the first quarter of 2023. 

On May 9, Airbnb, Inc. reported a Q1 GAAP EPS of $0.18 and a revenue of $1.82 billion, outperforming Wall Street estimates by $0.08 and $30 million, respectively. During the first quarter, the total number of active listings increased by 18% compared to the same period in the previous year. This growth rate was higher than the 16% recorded in the fourth quarter of 2022.

RBC Capital analyst Brad Erickson lowered the firm’s price target on Airbnb, Inc. on May 10 to $105 from $135 and kept a Sector Perform rating on the shares. Although the company’s Q1 earnings exceeded expectations, the management’s guidance for Q2 Nights fell well below the consensus. Erickson anticipates that there will be greater pressure on the marginal Average Daily Rate in the future. Due to the company’s high valuation and a clearer understanding of the structural limits on room night growth, RBC prefers to wait for a more significant pullback before recommending a more positive stance on Airbnb, Inc.’s stock.

According to Insider Monkey’s fourth quarter database, 54 hedge funds were bullish on Airbnb, Inc., compared to 58 funds in the prior quarter. John Overdeck and David Siegel’s Two Sigma Advisors is a prominent stakeholder of the company, with 2.16 million shares worth $269.4 million. 

In addition to Tesla, Inc., The Walt Disney Company, and Apple Inc., Cohen disposed of his Airbnb, Inc. stake. 

Artisan Developing World Fund made the following comment about Airbnb, Inc. in its Q1 2023 investor letter:

“Top contributors to performance for the quarter included online travel marketplace Airbnb, Inc.. Airbnb outperformed on the resilience of the travel category including for long-term stays, and on operating leverage as cost optimization is met with revenue increases. Notably, our top four holdings entering the quarter (Sea, Meli, Nvidia, Airbnb) which represented 24.37% of capital on December 31, 2022, increased an average of 64.42% during the quarter.”

8. PepsiCo, Inc. (NASDAQ:PEP)

Number of Hedge Fund Holders: 70

PepsiCo, Inc. (NASDAQ:PEP) has been distributing cash dividends every quarter since 1965, and the year 2023 signifies the 51st consecutive year in which the company has raised its annual dividend, making it a dividend king. On May 2, PepsiCo, Inc. declared a $1.265 per share quarterly dividend, a 10% increase from its prior dividend of $1.150. The dividend is payable on June 30, to shareholders of record as of June 2. Although PepsiCo, Inc. has a strong history of paying dividends, Steve Cohen sold all of his shares in the company during the first quarter of 2023, worth approximately $80 million as of Q4 2022. 

On April 27, Barclays raised the firm’s price target on PepsiCo, Inc. to $206 from $201 and maintained an Overweight rating on the shares. According to the analyst, the company increased its organic sales and core profit growth projections after its Q1 earnings report.

According to Insider Monkey’s fourth quarter database, 70 hedge funds were long PepsiCo, Inc., compared to 72 funds in the prior quarter. Terry Smith’s Fundsmith LLP is the biggest stakeholder of the company, with 6.65 million shares worth $1.20 billion. 

Madison Sustainable Equity Fund made the following comment about PepsiCo, Inc. in its Q1 2023 investor letter:

“PepsiCo, Inc. announced that it will commit $3.3 million in funds toward water replenishment projects across North America. These projects aim to reduce absolute water use and replenish back into the local watershed more than 100% of the water used at company-owned and third-party sites in high water-risk areas.”

7. Block, Inc. (NYSE:SQ)

Number of Hedge Fund Holders: 70

Block, Inc. (NYSE:SQ) develops solutions that empower merchants to receive payments via card and also offer reporting and analysis features, as well as prompt settlement on the following day. The company increased its projections for 2023 and reported Q1 earnings that surpassed expectations. In the fourth quarter of 2022, Cohen held 587,303 shares of the company worth $37 million. However, during the first quarter of 2023, the billionaire sold all of his shares in Block, Inc..

On May 11, CLSA analyst John Marrin downgraded Block, Inc. to Underperform from Buy with a price target of $63, down from $93, and expressed concerns about the macro environment that outweigh the firm’s optimism about the company’s long-term growth potential. The analyst believes that there is a growing likelihood of a “hard landing” in the U.S. during the latter half of 2023, as regional banks’ withdrawal puts more pressure on consumers and small businesses, who are already struggling with high interest rates. Despite posting decent earnings last week, Block, Inc.’s stock performance has trailed the market, and investors may already be anticipating lower earnings in 2024, the analyst wrote in the research note.

According to Insider Monkey’s fourth quarter database, 70 hedge funds were bullish on Block, Inc., compared to 75 funds in the prior quarter. Cathie Wood’s ARK Investment Management is the biggest position holder in the company, with 9 million shares worth $565.7 million. 

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Block, Inc. was one of them. Here is what the fund said:

“Block, Inc. provides point-of-sale technology to small businesses and operates the Cash App ecosystem of financial services for individuals. Shares fell due to mixed quarterly results with more modest growth in the Seller business offsetting strength in Cash App. While integration of recently acquired Afterpay is progressing well and credit metrics remain healthy, the buy-now-pay-later business slowed due to greater competitive intensity. We continue to own the stock due to Block’s long runway for growth, sustainable competitive advantages, and unique corporate culture.”

Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund include Wells Fargo.”

6. Booking Holdings Inc. (NASDAQ:BKNG)

Number of Hedge Fund Holders: 83

Booking Holdings Inc. (NASDAQ:BKNG) offers online reservation services for travel and restaurants worldwide. These services include accommodation reservations through Booking.com, rental car reservations through Rentalcars.com, travel reservation services, hotel distribution services, and vacation packages and cruises through Priceline, as well as flight, ground transportation, and activities reservation services through Agoda. The company also operates KAYAK, an online meta-search service, and OpenTable for booking online restaurant reservations. In Q4 2022, Cohen owned 66,448 shares of Booking Holdings Inc., worth $134 million. In the first quarter of 2023, he dumped his stake entirely. 

On May 4, Booking Holdings Inc. reported a Q1 non-GAAP EPS of $11.60 and a revenue of $3.78 billion, outperforming Wall Street consensus by $0.86 and $30 million, respectively. Revenue for the period climbed 40% on a year-over-year basis. 

Deutsche Bank raised the firm’s price target on Booking Holdings Inc. on May 8 to $3,000 from $2,910 and maintained a Buy rating on the shares following the Q1 results.

According to Insider Monkey’s fourth quarter database, 83 hedge funds were bullish on Booking Holdings Inc., compared to 92 funds in the prior quarter. Harris Associates is a prominent stakeholder of the company, with 515,271 shares worth over $1 billion. 

Like Tesla, Inc., The Walt Disney Company, and Apple Inc., Booking Holdings Inc. is one of the stocks dropped by Cohen in Q1 2023. 

Diamond Hill Large Cap Strategy made the following comment about Booking Holdings Inc. in its Q1 2023 investor letter:

“We did have several strong performing stocks this quarter. Our top contributors to return included NVR, Amazon, Alphabet, Microsoft and Booking Holdings Inc., all of which posted double-digit gains.

Online travel services provider Booking Holdings reported strong results in the quarter with gross bookings well above pre-pandemic levels. In addition, the outlook for consumer travel continued to be relatively strong. We exited our position in Booking as its share price approached our estimate of intrinsic value, reallocating funds to more deeply discounted opportunities.”

5. Union Pacific Corporation (NYSE:UNP)

Number of Hedge Fund Holders: 83

Union Pacific Corporation (NYSE:UNP) operates in the railroad business in the United States. In Q4 2022, billionaire Steve Cohen owned 269,699 shares of the company worth $55.8 million. However, in the first quarter of 2023, Cohen discarded his entire stake in Union Pacific Corporation.

On April 21, RBC Capital analyst Walter Spracklin lowered the firm’s price target on Union Pacific Corporation to $184 from $191 and keeps a Sector Perform rating on the shares after its Q1 results. While Union Pacific’s adjusted Q1 earnings per share (EPS) of $2.53 fell short of expectations, the analyst suggests that there is a possibility that the stock price may actually increase as the company’s financial performance worsens. This is because the market is factoring in a higher likelihood of Union Pacific hiring an executive with expertise in Precision Scheduled Railroading.

According to Insider Monkey’s Q4 database, 83 hedge funds were long Union Pacific Corporation, compared to 74 funds in the prior quarter. Eric W. Mandelblatt’s Soroban Capital Partners is the largest stakeholder of the company.

Matrix Asset Advisors made the following comment about Union Pacific Corporation in its Q1 2023 investor letter:

“During the quarter we added a new position in Union Pacific Corporation (NYSE:UNP). Union Pacific (UNP) is the 2nd largest railroad network in the United States just behind Burlington Northern Santa Fe. The firm operates in the Western, Midwestern, and Southern portions of the United States. 90% of UNP sales come from the US and 10% from Mexico. Over the past decade, railroads gained market share from the trucking industry because it costs 10-40% less to ship via rails than trucks. The company has a long history of consistent operating growth and profitability. The shares fell from a high of $278 in May of 2022 after the firm experienced operating challenges due to a slower macro environment and higher expenses.”

4. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 91

At present, no car manufacturer in North America processes lithium themselves. However, Tesla, Inc. announced on May 9 that it is planning to alter this situation by constructing a refining plant in Corpus Christi, Texas, at a cost of $375 million. By doing so, Tesla, Inc. aims to improve its supply chain and fulfill its ambitious EV sales objectives, while also branching out from its primary business of car production into raw materials. In Q1 2023, Steve Cohen disposed of his entire Tesla stake, consisting of 877,800 shares worth over $108 million. 

On May 12, Wedbush maintained an Outperform rating on Tesla, Inc. with a price target of $215 following Elon Musk’s announcement that a new Twitter CEO would replace him. The analyst informed investors that the news should eliminate some of the distraction risk around the Tesla narrative and have a beneficial impact on the stock. Wedbush is convinced that Tesla, Inc.’s share price will start to “finally remove this lingering albatross from the story.”

According to Insider Monkey’s fourth quarter database, 91 hedge funds were long Tesla, Inc., compared to 88 funds in the earlier quarter. Ken Griffin’s Citadel Investment Group is a significant position holder in the company, with 7.5 million shares worth $926.2 million.  

Baron Opportunity Fund made the following comment about Tesla, Inc. in its Q1 2023 investor letter:

“Tesla, Inc. designs, manufactures, and sells EVs, related software and components, and solar and energy storage products. Following a sharp decline at the end of 2022, Tesla’s stock rebounded in the first quarter of 2023 on investor expectations that Tesla will continue to grow vehicle deliveries and maintain solid gross and operating margins despite a potential recession, competition in China, and vehicle price reductions. We wrote a long piece on Tesla last quarter and refer readers back to it, because for long-term investors not much has changed over the last three months. Tesla did hold its first Investor Day in March, and several Baron analysts and portfolio managers attended. We toured the Austin Gigafactory, drove in a Cybertruck, boarded a Semi truck, and spoke with a wide swath of Tesla senior managers. During the formal presentation, Tesla highlighted, among other things: (1) its broad and deep bench of executive talent supporting CEO Elon Musk; (2) its “Master Plan 3–Sustainable Energy for All of Earth,” which featured EVs, renewable power from solar and wind, and stationary electric storage; (3) its vehicle assembly innovations, including massive casted parts (building Model Y bodies with single front and rear castings, replacing a substantial number of parts and fastening steps), a stainless steel exoskeleton (for Cybertruck), and its next-generation highly efficient “unboxed process” for its next-gen $25,000 vehicle; (4) a future permanent[1]magnet electric motor that will not require any rare earths; and (5) the massive untapped market opportunity for commercial stationary electric storage, branded Megapack, as the world steadily shifts to renewable energy. As long-term shareholders, we have witnessed Tesla exploit its innovative Model 3/Y now-global mass-market platform to increase vehicle deliveries from barely a standing start to over 1.3 million units, while achieving industry-leading margins and reinforcing its iron-clad balance sheet to almost $23 billion in cash (and effectively no recourse debt). We expect Tesla’s next-generation EV and Megapack products to have a similar impact on company results.”

3. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Holders: 99

The Walt Disney Company on May 10 reported a FQ2 non-GAAP EPS of $0.93, missing Wall Street estimates by $0.01. Revenue over the period increased 13.4% year-over-year to $21.82 billion, in-line with market consensus. The average monthly revenue generated per paid subscriber of Disney+ in the domestic market rose from $5.95 to $7.14, attributed to a surge in average retail pricing. In the first quarter of 2023, Steve Cohen dumped his entire stake in The Walt Disney Company, which was worth $1.3 million. 

On May 12, Wolfe Research analyst Peter Supino downgraded The Walt Disney Company to Peer Perform from Outperform without a price target. The analyst informed investors that Disney’s direct-to-consumer subscriber and linear TV projections have been worsening. Wolfe Research believes that Disney’s plan for a larger subscriber base, higher prices, and lower costs appears to be contradictory. The firm also stated that the subscriber forecasts for Disney+ are now deemed risky, and the company’s linear TV outlook is deteriorating. Furthermore, the $2.5 billion cost reductions are already factored into consensus estimates, the analyst told investors.

According to Insider Monkey’s fourth quarter database, 99 hedge funds were bullish on The Walt Disney Company, compared to 112 funds in the earlier quarter. Nelson Peltz’s Trian Partners is a significant position holder in the company, with 9 million shares worth $784.5 million. 

VGI Partners made the following comment about The Walt Disney Company in its 2022 annual investor letter:

“The Walt Disney Company is a diversified media conglomerate operating media networks, theme parks, film and TV studios and direct-to-consumer streaming services. It is the global leader in theme parks with hotels and cruise lines aimed at families. Key assets within Disney are the instantly recognisable entertainment franchises that have multiple avenues of monetisation such as Mickey Mouse, Star Wars, ABC and Marvel’s Avengers.

Disney’s share price declined due to a number of factors in 2022, presenting us the chance to purchase a long-admired business and its unique collection of valuable intellectual property assets at what we consider to be a very attractive valuation. Summarily, the EPS of Disney has declined from US$7 in 2018 to ~US$2.60 in 2022 but we believe that the earnings power of the assets has not diminished to anywhere near this extent.

Disney is currently undergoing a business transition within the Media and Entertainment Distribution division (DMED) from traditional media property distribution via third parties (i.e. cinemas and broadcast networks) to a Direct-To-Consumer (DTC) model via the Disney+ streaming service. A key element of our thesis is that the earnings power of the company is currently being masked by the marketing and content investments within Disney+ and that this will normalise over the next several years. To put this in perspective, Disney+ (DTC sub-segment) currently generates operating losses of over US$3.3bn (a negative 14% operating margin) compared to operating margins at its nearest streaming competitor, Netflix, of +15.5%…” (Click here to read the full text)

2. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 100

Bank of America Corporation (NYSE:BAC) offers financial and banking services and products to a diverse range of clients worldwide, including individual consumers, small to middle-sized businesses, institutional investors, large corporations, and governments. On April 26, Bank of America Corporation declared a quarterly dividend of $0.22 per share, in line with previous. The dividend is distributable on June 30, to shareholders of record on June 2. According to securities filings for Q1 2023, Steve Cohen discarded his entire stake in Bank of America Corporation, which consisted of 151,970 shares worth $5 million.

On May 12, Evercore ISI analyst Glenn Schorr lowered the firm’s price target on Bank of America Corporation to $35 from $36 and maintained an Outperform rating on the shares. This came after the FDIC issued its Notice of Proposed Rulemaking regarding the calculation of a special assessment that banks must pay to replenish the deposit insurance fund in the aftermath of Signature Bank and SVB failures. After assessing the potential impacts of this special assessment, Evercore’s 2024 estimates have been adjusted downwards, and targets have been lowered for all banks except for Goldman Sachs and Morgan Stanley, which are expected to experience an insignificant EPS impact.

According to Insider Monkey’s Q4 data, 100 hedge funds were bullish on Bank of America Corporation, compared to 97 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the largest stakeholder of the company. 

Oakmark Equity and Income Fund made the following comment about Bank of America Corporation in its Q1 2023 investor letter:

“The Oakmark Equity and Income Fund has 29% of its equity portfolio in financials. This made the March sell-off painful, but we do not believe that this has meaningfully changed the value of most of our financial equity holdings. In fact, we were adding to financial positions throughout March. We believe that one way to analyze our financial holdings is to look at them in different buckets given their various business models and risk profiles. Almost 30% of our financial exposure is in insurance companies and insurance brokers. Insurance companies have very stable liability profiles, so the main risk is a change in asset values. We are comfortable with their investment portfolios and think these stocks are quite attractive. Around 5% of our financials are asset managers. This leaves a little over 40% of the financials exposure in a varied group of banks and lenders. About 5% of that portfolio is in Bank of America Corporation and State Street. These two banks are designated as Systemically Important Financial Institutions and are held to higher regulatory standards. Our largest single financials holding is Bank of America, which has grown deposits during March, and we believe it is one of the best managed companies in the sector.”

1. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 135

In the first quarter of 2023, Steve Cohen sold all of his shares in Apple Inc., amounting to $26.5 million. On May 4, Apple Inc. declared a $0.24 per share quarterly dividend, a 4.3% increase from its prior dividend of $0.23. The dividend will be paid on May 18. The company also unveiled a new initiative to repurchase as much as $90 billion worth of its common stock. 

On May 5, T. Michael Walkley, an analyst at Canaccord, increased the firm’s price target on Apple Inc. from $180 to $185 while maintaining a Buy rating on the stock. The analyst noted that Apple’s strong financial performance is indicative of its ability to capture a larger market share in the high-end segment, and its resilient consumer base during difficult macroeconomic conditions.

According to Insider Monkey’s fourth quarter database, 135 hedge funds were bullish on Apple Inc., compared to 140 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the biggest stakeholder of the company. 

RiverPark Large Growth Fund made the following comment about Apple Inc. in its Q1 2023 investor letter:

“Apple Inc.: Apple shares were our final top contributor for the quarter. While the company reported a rare quarterly earnings miss, investors had expected slower sales due to macro headwinds. Services continue to be a bright spot for the company with an all-time high of $21 billion in quarterly revenue, a 6% year-over-year increase, and management expects iPhone revenue growth to re-accelerate in 2Q. Operating Cash Flow was $34 billion for the quarter, and the company returned $23 billion to shareholders in the last three months, including $4 billion in dividends and $19 billion in share repurchases.

With an installed base of 2 billion active devices and significant growth of the company’s recurring revenue Services segment (now 18% of revenue), we believe that Apple remains one of the most innovative, best-positioned and most profitable companies in the mobile technology industry.”

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This article is originally published at Insider Monkey.