In this article, we discuss 10 stocks to sell now according to Michael Zimmerman’s Prentice Capital Management. If you want to skip our detailed analysis of Zimmerman’s history, investment philosophy, and hedge fund performance, go directly to 5 Stocks to Sell Now According to Michael Zimmerman’s Prentice Capital Management.
Michael Zimmerman founded Prentice Capital Management, a financial investment advising hedge fund based in Greenwich, Connecticut. Prentice Capital Management has embraced a fundamental-driven, value-oriented investing strategy centered on public and private investments in the U.S. consumer and retail sectors since its formation in 2005. The hedge fund has a longstanding tradition of investing in public companies, utilising a combination of in-depth fundamental analysis and catalyst investing.
Michael Zimmerman resigned from Steven Cohen’s SAC Capital Advisors to establish Prentice Capital Management. He spent five years with SAC trading retail and consumer equities. Prentice Capital Partners, Zimmerman’s previous flagship hedge fund, invested in public equities and corporate debt, a strategy that has not proven to be very effective, at least in Zimmerman’s instance. During the financial crisis of 2008-2009, the fund lost 88% of its value and was temporarily closed. Zimmerman planned to start again and founded Prentice Capital Management, a new hedge fund. Zimmerman prefers to invest in undervalued firms that can increase their value by changing their management, strategy, or capital structure.
As of Q4 2021, Prentice Capital Management holds a 13F portfolio valued at $461.84 million, up from $395.61 million in the previous quarter. Some of the hedge fund’s major holdings in the fourth quarter were Uber Technologies, Inc. (NYSE:UBER), Carnival Corporation & plc (NYSE:CCL), and Las Vegas Sands Corp. (NYSE:LVS). In the fourth quarter of 2021, Michael Zimmerman’s Prentice Capital Management made new purchases in 4 stocks and additional purchases in 11. The hedge fund also reduced holdings in 3 stocks and sold off 9 securities completely.
Michael Zimmerman acquired 422,200 shares of Uber Technologies, Inc. (NYSE:UBER), reportedly worth $17.70 million in the fourth quarter of 2021. On April 19, Citi analyst Ronald Josey trimmed his price target on Uber Technologies, Inc. (NYSE:UBER) to $50 from $78, but maintained a Buy rating on the stock.
Carnival Corporation & plc (NYSE:CCL) is another prominent company in Prentice Capital’s portfolio. The fund holds 1.44 million shares valued at $29 million after increasing its stake in Carnival Corporation & plc (NYSE:CCL) by 113%. Carnival Corporation & plc (NYSE:CCL)’s price objective was decreased to $22 from $23 on April 19 by Citi analyst James Hardiman, who maintained a Neutral rating on the stock. Due to the recession discount that investors are clearly placing on values and overall attitude, the analyst decreased price predictions for the leisure industry.
Michael Zimmerman is also bullish on Las Vegas Sands Corp. (NYSE:LVS). The fund increased its holding in Las Vegas Sands Corp. (NYSE:LVS) by 2% in the fourth quarter, ending the period with 451,754 shares of the company. Following the Q4 results, CBRE analyst John DeCree boosted his price objective on Las Vegas Sands to $47 from $42 and maintained a Hold rating on the stock on January 27.
Our Methodology
Let’s start our list of 10 stocks to sell now according to Michael Zimmerman’s Prentice Capital Management. We used Zimmerman’s 13F portfolio for Q4 2021 for this analysis. On the list are firms in which the fund reduced or sold a previously held position entirely.
Insider Monkey’s data from roughly 900 elite hedge funds tracked in Q4 2021 was used to calculate the number of hedge funds that own shares in each firm.
Stocks to Sell Now According to Michael Zimmerman’s Prentice Capital Management
10. Coty Inc. (NYSE:COTY)
Number of Hedge Fund Holders: 36
Percentage Decrease in Stake in Q4: 2%
Coty Inc. (NYSE:COTY) is a cosmetics company that manufactures, markets, sells, and distributes branded cosmetics. It is divided into three segments – Americas, EMEA, and the Asia Pacific. As of the end of the fourth quarter, 36 hedge funds in Insider Monkey’s database held stakes in Coty Inc. (NYSE:COTY), down from 40 funds in the preceding quarter.
JPMorgan analyst Andrea Teixeira reduced her price objective on Coty Inc. (NYSE:COTY) to $10 from $12 on March 30 and maintained a Neutral rating on the stock. The analyst lowered expectations for most firms in the drinks and personal care market due to the ongoing Russia/Ukraine war and its impact on commodity costs, transportation, and currency.
Prentice Capital Management started building its position in Coty Inc. (NYSE:COTY) in the second quarter of 2020. In the fourth quarter of 2021, it held 7.53 million shares in the company, valued at $79.06 million. The company represents 17.11% of the hedge fund’s 13F portfolio. In the fourth quarter, the hedge fund reduced its holdings in the company by 2%.
Unlike Uber Technologies, Inc. (NYSE:UBER), Carnival Corporation & plc (NYSE:CCL), and Las Vegas Sands Corp. (NYSE:LVS), Coty Inc. (NYSE:COTY) is one of the stocks to sell now according to Michael Zimmerman’s Prentice Capital Management.
9. Evolv Technologies Holdings, Inc. (NASDAQ:EVLV)
Number of Hedge Fund Holders: 17
Percentage Decrease in Stake in Q4: 2%
Touchless security screening solutions based on artificial intelligence (AI) are provided by Evolv Technologies Holdings, Inc. (NASDAQ:EVLV). In the fourth quarter, Prentice Capital Management sold 38,774 shares of Evolv Technologies Holdings, Inc. (NASDAQ:EVLV), reducing its stake by about 2%. At the end of the quarter, the hedge fund still held more than 2.39 million shares of Evolv Technologies Holdings, Inc. (NASDAQ:EVLV), worth about $10.64 million.
By the end of Q4 2021, Insider Monkey found Evolv Technologies Holdings, Inc. (NASDAQ:EVLV) to be a part of 17 hedge fund portfolios. The consolidated stakes held by these funds in the company are worth $80.10 million, down from $103.96 million with 18 positions in the previous quarter.
Northland analyst Michael Latimore maintained an Outperform rating on Evolv Technologies Holdings, Inc. (NASDAQ:EVLV) on March 15, lowering his price objective to $7 from $16. According to Latimore, Evolv Technologies Holdings, Inc. (NASDAQ:EVLV) reported tremendous revenue growth of 236% year-over-year and bookings increase of 201% year-over-year. Still, its first public forecast for FY22 was well below the Street estimates.
8. United Airlines Holdings, Inc. (NASDAQ:UAL)
Number of Hedge Fund Holders: 35
Percentage Decrease in Stake in Q4: 14%
United Airlines Holdings, Inc. (NASDAQ:UAL) operates air transportation services in North America, Asia, the Middle East, Europe, the Pacific, Africa, and Latin America through its subsidiaries. The smart money is paying attention to United Airlines Holdings, Inc. (NASDAQ:UAL), as 35 hedge funds tracked by Insider Monkey reported having interests in the firm at the end of the fourth quarter, up from 30 funds a quarter earlier.
The hedge fund of Michael Zimmerman entered the fourth quarter of 2021 with 173,709 shares of United Airlines Holdings, Inc. (NASDAQ:UAL) in its portfolio, worth around $7.61 million. The hedge fund reduced its stake in United Airlines Holdings, Inc. (NASDAQ:UAL) by 14% in the fourth quarter of 2021. The company has featured on Zimmerman’s portfolio since the third quarter of 2021.
MKM Partners analyst Conor Cunningham boosted his price objective on United Airlines Holdings, Inc. (NASDAQ:UAL) to $59 from $53 on April 22 and reiterated a Buy recommendation on the stock. In a research note to investors, the analyst stated that the business had very positive results that implied a bullish demand scenario, with all categories rising.
7. Guess’, Inc. (NYSE:GES)
Number of Hedge Fund Holders: 22
Percentage Decrease in Stake in Q4: 100%
Guess’, Inc. (NYSE:GES) is a company that designs, markets, distributes, and licences modern garments and accessories for men, women, and children. The company’s segments are Americas Retail, Americas Wholesale, Europe, Asia, and Licensing. In the third quarter of 2021, Prentice Capital Management held 50,733 shares of Guess’, Inc. (NYSE:GES), valued at $1.07 million, which the hedge fund sold in the fourth quarter of 2021.
Following the Q4 data, B. Riley analyst Susan Anderson decreased her price objective on Guess’, Inc. (NYSE:GES) to $36 from $38 and maintained a Buy rating on the stock. She adjusted her forecasts to account for rising air freight.
At the end of Q4, Rima Senvest Management was the leading shareholder of Guess’, Inc. (NYSE:GES), holding over 1.03 million shares. Overall, 22 hedge funds in Insider Monkey’s database were bullish on Guess’, Inc. (NYSE:GES) in Q4, up from 21 in the previous quarter. These stakes are valued at over $132.02 million.
6. Macy’s, Inc. (NYSE:M)
Number of Hedge Fund Holders: 43
Percentage Decrease in Stake in Q4: 100%
Macy’s, Inc. (NYSE:M) is a multi-channel retailer that operates via shops, websites, and mobile apps. It runs 725 department stores under the Macy’s, Macy’s Backstage, Market by Macy’s, Bloomingdale’s, Bloomingdale’s The Outlet, Bloomies, and Bluemercury brands in the District of Columbia, Puerto Rico, and Guam as of January 29, 2022.
Securities filings show that Prentice Capital Management owned 140,671 shares of Macy’s, Inc. (NYSE:M) at the end of the third quarter of 2021, worth $3.18 million, representing 0.8% of the portfolio. In the fourth quarter of 2021, the hedge fund sold its entire interest in Macy’s, Inc. (NYSE:M). The company had featured in Prentice Capital Management’s portfolio since the first quarter of 2020.
Citi analyst Paul Lejuez raised Macy’s, Inc. (NYSE:M) to Neutral from Sell on February 24 and assigned a price target of $25. At the end of the fourth quarter, 43 hedge funds in Insider Monkey’s database held stakes in Macy’s, Inc. (NYSE:M), an increase compared to 41 funds in the preceding quarter.
Michael Zimmerman’s Prentice Capital Management sold Macy’s, Inc. (NYSE:M) in Q4 2021, but significant stocks to watch in its portfolio were Uber Technologies, Inc. (NYSE:UBER), Carnival Corporation & plc (NYSE:CCL), and Las Vegas Sands Corp. (NYSE:LVS).
ClearBridge Investments, an investment management firm, in its third quarter 2021 investor letter, mentioned Macy’s, Inc. (NYSE:M). Here is what the fund said:
“Meanwhile, Macy’s, an omnichannel retail organization that operates stores, websites, and mobile applications under the Macy’s, Bloomingdale’s, and Bluemercury brands, also had a strong quarter (+21.5%). Macy’s delivered strong second-quarter earnings, beating on earnings and revenue and raising guidance as the retailer continues to pay down debt and grow its digital business.”
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Disclosure: None. 10 Stocks to Sell Now According to Michael Zimmerman’s Prentice Capital Management is originally published on Insider Monkey.
