5 Large-Cap Stocks Hedge Funds Are Dumping

In this article, we will look at the 5 large-cap stocks hedge funds are dumping. If you want to explore similar stocks, you can go to 15 Large-Cap Stocks Hedge Funds Are Dumping.

5. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Holders: 99

Number of Hedge Funds That Sold: 13

13 hedge funds exited their positions in The Walt Disney Company (NYSE:DIS) at the close of Q4 2022. The stock was held by 99 hedge funds in the fourth quarter of 2022. The collective stakes of these hedge funds amounted to $3.37 billion, down from $3.89 billion in Q3 2022 with 112 positions. The stock is placed fifth among the large-cap stocks hedge funds are dumping right now.

On February 9, BofA analyst Jessica Reif Ehrlich raised her price target on The Walt Disney Company (NYSE:DIS) to $135 from $115 and maintained a Buy rating on the shares.

As of December 31, Trian Partners is the leading shareholder in The Walt Disney Company (NYSE:DIS) and has a position worth $784.5 million in the company.

Here is what ClearBridge Investments had to say about The Walt Disney Company (NYSE:DIS) in its fourth-quarter 2022 investor letter:

“We exited The Walt Disney Company (NYSE:DIS) to focus on areas of the media industry with better risk/reward. Disney has significant exposure to consumer spending that is showing early signs of weakening. We decided to move on from the name as its traditional linear programming business is dissolving more quickly than expected, while its Disney+ streaming business cannot offset the affiliate fees and advertising revenue that the company has relied on for years. Disney’s parks business has done well recently due to strong pricing power but we have concerns that consumers will continue to spend on such discretionary purchases in a recessionary environment. At this point in the cycle, we believe Netflix has more ways to innovate and improve profitability.”

4. Philip Morris International Inc. (NYSE:PM)

Number of Hedge Fund Holders: 47

Number of Hedge Funds That Sold: 16

This March, UBS analyst Andrei Condrea upgraded Philip Morris International Inc. (NYSE:PM) to Buy from Neutral and raised his price target on the shares to $116 from $106. As of March 2, Philip Morris International Inc. (NYSE:PM) has lost 2.63% year to date.

In Q4 2022, 16 hedge funds dumped their positions in Philip Morris International Inc. (NYSE:PM). At the end of Q4 2022, 47 hedge funds were long Philip Morris International Inc. (NYSE:PM) and disclosed positions worth $6.20 billion in the company. This is compared to 63 positions in the previous quarter with stakes worth $4.68 billion.

As of December 31, GQG Partners is the top shareholder in Philip Morris International Inc. (NYSE:PM) and has a position worth $2.45 billion in the company.

Here is what Distillate Capital had to say about Philip Morris International Inc. (NYSE:PM) in its fourth-quarter 2022 investor letter:

“It makes intuitive sense that our process that employs bottom-up stock selection based on the combination of valuation and quality would reduce the weight in places that outperformed and add to areas that were weaker. The largest exited positions in the quarter were Philip Morris International Inc. (NYSE:PM), which saw its stability score fall slightly below the threshold for inclusion.”

3. United Parcel Service, Inc. (NYSE:UPS)

Number of Hedge Fund Holders: 36

Number of Hedge Funds That Sold: 19

On January 31, United Parcel Service, Inc. (NYSE:UPS) posted earnings for the fourth quarter of fiscal 2022. The company reported an EPS of $3.62 and outperformed estimates by $0.04. The company’s revenue for the quarter amounted to $27.03 billion, down 2.66% year over year and short of estimates by $1 billion.

United Parcel Service, Inc. (NYSE:UPS) was held by 36 hedge funds at the close of Q4 2022. The total stakes of these hedge funds amounted to $514.6 million, down from $656.2 million in the previous quarter with 55 positions. The hedge fund sentiment for the stock is negative and United Parcel Service, Inc. (NYSE:UPS) is the third-largest stock that hedge funds dumped in Q4 2022.

As of December 31, Bill & Melinda Gates Foundation Trust is the most prominent investor in the company and has a position worth $128.7 million.

2. The Home Depot, Inc. (NYSE:HD)

Number of Hedge Fund Holders: 62

Number of Hedge Funds That Sold: 27

27 hedge funds dissolved their positions in The Home Depot, Inc. (NYSE:HD) at the end of Q4 2022. The stock was a part of 62 investors’ portfolios. The total stakes of these hedge funds amounted to $4.84 billion, down from $5.61 billion in Q3 2022 with 89 positions. The hedge fund sentiment for the stock is negative.

On February 22, Truist lowered its price target on The Home Depot, Inc. (NYSE:HD) to $352 from $382 and reiterated a Buy rating on the shares.

As of December 31, Diamond Hill Capital is the largest shareholder in The Home Depot, Inc. (NYSE:HD) and owns over 1 million shares of the company.

Here is what Matrix Asset Advisors had to say about The Home Depot, Inc. (NYSE:HD) in its third-quarter 2022 investor letter.

“During the quarter, we re-established a position in The Home Depot, Inc. (NYSE:HD) sold earlier this year, after the shares declined sharply on big picture concerns about a softer housing market and lower consumer spending. We believe that HD is a very well-managed company, positioned to continue showing good profits even as the economy decelerates. The products it carries in inventory are in year-round demand from contractors and homeowners wanting to maintain and improve their homes. The company has historically been shareholder friendly, repurchasing shares and increasing the dividend, most recently by 15% earlier this year. On September 30, HD’s current dividend yield was 2.8%.”

1. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 240

Number of Hedge Funds That Sold: 29

On February 2, Amazon.com, Inc. (NASDAQ:AMZN) reported earnings for the fourth quarter of fiscal 2022. The company generated a revenue of $149.20 billion and outperformed estimates by $3.43 billion. The company’s EPS for the quarter amounted to $0.03 and missed EPS expectations by $0.14. As of March 2, Amazon.com, Inc. (NASDAQ:AMZN) has lost 26.91% over the past 6 months.

Amazon.com, Inc. (NASDAQ:AMZN) was held by 240 hedge funds at the close of Q4 2022. The total stakes of these hedge funds amounted to $27.5 billion, down from $34.6 billion in the previous quarter with 269 positions. 29 hedge funds exited their positions in Amazon.com, Inc. (NASDAQ:AMZN) in the fourth quarter of 2022, making it the top large-cap stock that hedge funds are dumping right now.

As of December 31, Harris Associates is the leading investor in Amazon.com, Inc. (NASDAQ:AMZN) and has a position worth $1.62 billion in the company.

Here is what Ron Baron’s Baron Funds had to say about Amazon.com, Inc. (NASDAQ:AMZN) in its fourth-quarter 2022 investor letter:

“Amazon.com, Inc. (NASDAQ:AMZN) is the world’s largest retailer and cloud services provider. Shares of Amazon were down in the quarter, as the company guided to relative weakness in margins and its cloud business, due to the same macro headwinds and optimization trends impacting Microsoft Azure. We believe that Amazon is well positioned to improve profitability back to historical levels, particularly in its core North American retail division. We have already seen some of this play out with reports of Amazon’s increased cost discipline and broad-based layoffs. Particularly within the internet and software sectors, we believe Amazon can sustain premium growth compared to the rest of the market, given its competitive strengths and scale. Longer term, Amazon has substantially more room to grow in e-commerce, where it has less than 15% penetration in its TAM, and cloud, where it is a clear leader in the vast and growing cloud infrastructure market.”

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