In this article, we discuss 10 stocks billionaire Dan Loeb is selling in 2022.
The stock market is extremely volatile right now, with inflation at a 40-year high, rising interest rates, and ongoing geopolitical tension. Billionaire Dan Loeb, the chief of Third Point, believes that the volatility in the stock market is a result of ever-changing macro variables and investors are not reacting accordingly. He wrote in his latest letter to investors that hedge fund managers who have suffered losses after years of triumphs, including himself, were unable to swiftly adapt their investment models to the market changes.
Dan Loeb also acknowledged the tech-heavy NASDAQ stumbling recently to its lowest point since June 2020. His hedge fund was able to navigate the tough market backdrop by leaning away from tech stocks and focusing more on cyclical names. However, he thinks it’s tough to call a bottom in the tech space despite significant declines. Dan Loeb is piling into energy stocks as a defensive play in this market.
Third Point’s flagship Offshore Fund tumbled 11.5% in Q1 2022 compared to the S&P 500’s 4.6% drop. In April, the fund declined approximately 1%, versus the 8% downturn in the S&P 500 and the 13% contraction in the NASDAQ. The hedge fund added 9 new stocks to its Q1 portfolio, made additional purchases in 5 securities, sold out of 26 companies, and reduced holdings in 22 stocks. Some of the most notable companies dumped by Dan Loeb included Alphabet Inc. (NASDAQ:GOOG), The Walt Disney Company (NYSE:DIS), and Coupa Software Incorporated (NASDAQ:COUP).
Our Methodology
We used the Q1 2022 portfolio of billionaire Dan Loeb’s Third Point for this analysis, selecting the 10 most prominent stocks that he exited during the period.
Stocks Billionaire Dan Loeb is Selling in 2022
10. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 63
Accenture plc (NYSE:ACN) is an Ireland-based professional services company, specializing in strategy and consulting, technology, and operations services worldwide. In Q1 2022, Dan Loeb disposed of his previously held Accenture plc (NYSE:ACN) stake, consisting of 1.25 million shares worth $518.18 million.
On April 8, Baird analyst David Koning raised the price target on Accenture plc (NYSE:ACN) to $378 from $360 and maintained a Neutral rating on the shares. The analyst attended the upbeat analyst meeting and likes a lot about Accenture plc (NYSE:ACN) in the short-term. He said he appreciates the robust recent growth and margin expansion. The future also looks optimistic, with strides in quantum computing, space tech, and science smart materials, he added.
According to the database of Insider Monkey, 63 hedge funds were bullish on Accenture plc (NYSE:ACN) at the end of March 2022, up from 50 funds in the preceding quarter. In the first quarter of 2022, Nicolai Tangen’s Ako Capital held the leading stake in the company, comprising 2.28 million shares worth $770 million.
In addition to Alphabet Inc. (NASDAQ:GOOG), The Walt Disney Company (NYSE:DIS), and Coupa Software Incorporated (NASDAQ:COUP), Dan Loeb dumped Accenture plc (NYSE:ACN) shares in Q1 2022.
Here is what Baron Durable Advantage Fund has to say about Accenture plc (NYSE:ACN) in its Q1 2022 investor letter:
“Another good example is the leading consulting company, Accenture, plc (NYSE:ACN), whose stock was down 18% during the quarter despite the company reporting sparkling results with mid-20s year-over-year growth rates in revenues, EBIT, and EPS, driven by double-digit growth across all markets, industries, and services while continuing to gain market share (growing at nearly 3 times the market rate). In addition to expected strength in smaller deals, Accenture had 36 clients booking over $100 million worth of business in the last quarter alone. While most investors remain concerned about a pull-forward of demand, the company is not seeing a slowdown as digital transformations became a must for organizations to remain competitive as described by the company in its latest earnings conference call:
‘Pre-pandemic, what we saw were clients much more into – they did transformation quite sequentially, right? The pandemic was a major shock. You saw the leaders who were kind of coming into that saying we’ve got to go even faster, and you saw a bunch of companies saying we need to leapfrog, right? We need to move online. We need to do digital transformation. And that meant that we saw companies starting to take on not sequential transformation but what we call compressed transformation, where they’re at the same time doing manufacturing as well as sales’.”
9. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 160
Alphabet Inc. (NASDAQ:GOOG) is the parent company of Google and Google subsidiaries. Dan Loeb first invested in Alphabet Inc. (NASDAQ:GOOG) in Q1 2016 and sold off the shares in the second quarter of 2018. He again acquired a position in the firm in Q4 2020. By the fourth quarter of 2021, Dan Loeb’s hedge fund owned 212,000 Alphabet Inc. (NASDAQ:GOOG) shares, worth over $614 million. This position was discarded entirely in the first quarter of 2022.
Wells Fargo analyst Brian Fitzgerald on April 27 slashed the price target on Alphabet Inc. (NASDAQ:GOOG) to $3,400 from $3,600 to account for falling sector valuations, while reiterating an Overweight rating on the stock after the company posted a somewhat mixed Q1. The analyst noted that headline and gross revenues were “in-lineish” and segment revenues were mixed. Search, Cloud, and Network segments all modestly exceeded consensus, while YouTube and Play/Other notably missed expectations.
Among the hedge funds tracked by Insider Monkey, Alphabet Inc. (NASDAQ:GOOG) was part of 160 public stock portfolios in the first quarter of 2022, compared to 158 funds in the prior quarter. Chris Hohn’s TCI Fund Management is a prominent shareholder of the company, with 2.3 million shares worth $6.62 billion.
Here is what Farrer Wealth Advisors has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q1 2022 investor letter:
“Alphabet: We won’t waste much time trying to explain to our clients why Alphabet is such a phenomenal business, we believe that is quite self-evident. The better explanation is why we never bought Alphabet before. The reason was a personal bias we held based on three beliefs (which we now believe to be incorrect)
Growth in YouTube would stall as the increased ad-load would turn-off viewers (the double ad-load at the beginning of videos for example). Consumers will focus on discovery rather than search to purchase new items. For example – using Instagram/TikTok to decide what new clothes to buy instead of ‘googling’ for clothes. Other Bets: In general, we felt that capital spent on “Other Bets” has been a bit wasteful with the segment earning just around $3.1bn in revenue versus nearly $21bn in operating losses over the last five years…” (Click here to see the full text)
8. Expedia Group, Inc. (NASDAQ:EXPE)
Number of Hedge Fund Holders: 88
Expedia Group, Inc. (NASDAQ:EXPE) operates as an online travel company in the United States and internationally. In Q4 2021, Dan Loeb held 1.30 million shares of Expedia Group, Inc. (NASDAQ:EXPE), worth $236.2 million. The billionaire disposed of his stake entirely during the first quarter of 2022.
Piper Sandler analyst Thomas Champion views the recent pullback in Expedia Group, Inc. (NASDAQ:EXPE) stock as a buying opportunity and reiterated an Overweight rating on the shares with a $225 price target on May 11. The analyst observed that although Expedia Group, Inc. (NASDAQ:EXPE) reported a “mixed” Q1, he believes that product improvements, the loyalty program, and B2B initiatives “could serve as tailwinds beyond a robust summer travel” in 2022.
According to Insider Monkey’s Q1 data, Expedia Group, Inc. (NASDAQ:EXPE) was found in 88 public hedge fund portfolios, up from 82 funds in the last quarter. Daniel Sundheim’s D1 Capital Partners is the largest position holder in the company, with 7.6 million shares worth about $1.5 billion.
Here is what Heartland Mid Cap Value Fund has to say about Expedia Group, Inc. (NASDAQ:EXPE) in its Q4 2021 investor letter:
“The run-up in equity prices over the past year and a half has narrowed the pool of attractively valued businesses. Economically sensitive areas of the market, in particular, have seen valuations stretched—but the impact of investor exuberance is evident in share prices of companies throughout the broader market. In our view, the elevated valuations commanded by many stocks have heightened risks and dampened upside potential.
In response to this backdrop, we continue to focus on finding and owning companies that are poised to succeed against a variety of backdrops or those that are priced at significant discounts to peers regardless of the sector or industry. Recent addition Expedia Group, Inc. (EXPE) is an example of the type of business we’ve found attractive.”
7. Opendoor Technologies Inc. (NASDAQ:OPEN)
Number of Hedge Fund Holders: 36
Opendoor Technologies Inc. (NASDAQ:OPEN) is an American company that operates a digital platform for residential real estate in the United States. Dan Loeb’s Third Point added Opendoor Technologies Inc. (NASDAQ:OPEN) to its Q4 2021 portfolio by purchasing 3.77 million shares worth $55.15 million. The hedge fund disposed of its position in Opendoor Technologies Inc. (NASDAQ:OPEN) in Q1 2022.
On March 2, BTIG analyst Jake Fuller upgraded Opendoor Technologies Inc. (NASDAQ:OPEN) to Buy from Neutral with a $15 price target. The analyst observed that despite the limited housing inventory and concerns about the execution of the iBuyer model, he continues to see robust demand for Opendoor Technologies Inc. (NASDAQ:OPEN), with triple-digit mid-funnel traffic growth so far in the first quarter of 2022.
According to Insider Monkey’s first quarter data, 36 hedge funds were long Opendoor Technologies Inc. (NASDAQ:OPEN), down from 41 funds in the preceding quarter. Daniel Patrick Gibson’s Sylebra Capital Management held the biggest position in the company, with 24.8 million shares worth $214.7 million.
Here is what Baron Opportunity Fund has to say about Opendoor Technologies Inc. (NASDAQ:OPEN) in its Q4 2021 investor letter:
“The Fund invests in secular growth and innovative businesses across all market capitalizations, with the bulk of the portfolio landing in the large-cap zone. The Fund is categorized as US Large Growth by Morningstar. As of the end of the fourth quarter, the largest market cap holding in the Fund was $2.5 trillion and the smallest was $791 million. The median market cap of the Fund was $27.5 billion.
The Fund had $1.7 billion of assets under management. The Fund had investments in 63 securities. The Fund’s top 10 positions accounted for 45.4% of net assets. Fund inflows were positive for 2021.We sold Opendoor Technologies Inc. because we identified issues relating to our long-term theses in the company, and we decided to exit the positions to fund other purchases.”
6. RH (NYSE:RH)
Number of Hedge Fund Holders: 63
RH (NYSE:RH) is a California-based home furnishings retailer, selling furniture, lighting, textiles, bathware, decor, and outdoor and garden accessories. Dan Loeb added RH (NYSE:RH) to his portfolio in the last quarter of 2020. The billionaire held 535,000 shares of the company in Q4 2021, and he sold his position entirely in the first quarter of 2022.
On May 16, Morgan Stanley analyst Simeon Gutman initiated coverage of RH (NYSE:RH) with an Equal Weight rating and a $400 price target. The analyst views RH (NYSE:RH) as a “transcendent brand with the most long-term upside potential” in his coverage. However, a 12-month outlook makes him “pause”, since a “category reversion and potential recession” seems to be on the horizon.
Warren Buffett’s Berkshire Hathaway held 2.17 million shares of RH (NYSE:RH) in the first quarter of 2022, worth $707.6 million. Buffett’s fund is the largest shareholder of the company. Overall, 63 hedge funds were bullish on RH (NYSE:RH) at the end of Q1, up from 58 funds in the prior quarter.
Like Alphabet Inc. (NASDAQ:GOOG), The Walt Disney Company (NYSE:DIS), and Coupa Software Incorporated (NASDAQ:COUP), billionaire Dan Loeb sold off his RH (NYSE:RH) position at the end of March 2022.
Here is what Polen Global SMID Company Growth Fund has to say about RH (NYSE:RH) in its Q4 2021 investor letter:
“Our most significant detractors from performance over the fourth quarter includes RH. Upscale home-furnishings company RH underperformed over the quarter and the year amid rising costs that weighed on expectations and heightened concerns of reduced discretionary spending amid the ongoing pandemic. We expect the company to grow revenues as it rolls out additional galleries across the globe and thoughtfully expands into adjacencies like guest homes and design services. Along with steady margin growth through fixed cost leverage, which the company has consistently shown it can achieve, we believe this expansion should lead to favorable cash earnings growth going forward.”
5. Upstart Holdings, Inc. (NASDAQ:UPST)
Number of Hedge Fund Holders: 25
Upstart Holdings, Inc. (NASDAQ:UPST) was founded in 2012 and is headquartered in San Mateo, California. The company operates a cloud-based artificial intelligence lending platform in the United States. Dan Loeb added Upstart Holdings, Inc. (NASDAQ:UPST) to his portfolio in the last quarter of 2020. The billionaire held 4 million Upstart Holdings, Inc. (NASDAQ:UPST) shares in Q4 2021, worth $605.2 million. He sold off the shares completely in the first quarter of 2022.
On May 20, Wedbush analyst David Chiaverini lowered the price target on Upstart Holdings, Inc. (NASDAQ:UPST) to $15 from $20 and kept an Underperform rating on the shares. The analyst’s Underperform rating on the stock is based on weakening delinquency and loss trends on recent 2021 vintage securitizations that appear to be deteriorating significantly.
In Q1 2022, 25 hedge funds were bullish on Upstart Holdings, Inc. (NASDAQ:UPST), up from 20 funds in the earlier quarter. Vikram Kumar’s Kuvari Partners held a significant position in the company, with 296,738 shares worth $32.3 million.
Here is what Vulcan Value Partners has to say about Upstart Holdings, Inc. (NASDAQ:UPST) in its Q1 2022 investor letter:
“Upstart Holdings Inc. is an artificial intelligence (AI) and cloud-based lending platform. Upstart’s stock price has been very volatile, but its value has grown steadily. Last year, the company grew its revenue by over 250% organically, which materially exceeded our expectations. In addition, the company continues to generate robust free cash flow and is launching new products to expand its business. Upstart’s value has increased consistently since we first purchased it. Following our discipline, we have added to our position when its stock price has declined and its price to value ratio has improved, and we have reduced our stake when its stock price has risen faster than its value.”
4. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 113
The Walt Disney Company (NYSE:DIS) is a multinational entertainment company that operates through segments including Disney Media, Entertainment Distribution, and Disney Parks and Experiences. Dan Loeb’s Third Point held 2 million shares of The Walt Disney Company (NYSE:DIS), worth $309.7 million in Q4 2021. The hedge fund sold out of its position in the company in Q1 2022.
On May 24, Daiwa analyst Jonathan Kees lowered the price target on The Walt Disney Company (NYSE:DIS) to $151 from $201 and kept a Buy rating on the shares. The analyst cited recent contractions in market multiples for slashing the price target but he remains convinced that Disney+ will reach its fiscal 2024 subscriber target.
Among the hedge funds tracked by Insider Monkey, 113 funds held long positions in The Walt Disney Company (NYSE:DIS) at the end of March 2022, up from 111 funds in the last quarter. David Goel and Paul Ferri’s Matrix Capital Management disclosed the biggest stake in the company, comprising 6.33 million shares worth $868.2 million.
Here is what ClearBridge Investments Sustainability Leaders Strategy has to say about The Walt Disney Company (NYSE:DIS) in its Q4 2021 investor letter:
“The communication services sector was a weak spot in both the benchmark and the portfolio in the fourth quarter. Disney announced lower than expected streaming subscriber growth to the company’s Disney+ offering, attributable primarily to the content release schedule. Disney has been ramping up content spending given strong global response to Disney+, although production capability was temporarily impacted by COVID-19. We still believe Disney is on track to reach the subscriber outlook outlined at its December 2020 analyst day, driven by a very robust slate of content releases, particularly in the 2022–2024 time period.”
3. Burlington Stores, Inc. (NYSE:BURL)
Number of Hedge Fund Holders: 38
Burlington Stores, Inc. (NYSE:BURL) is a New Jersey-based retailer of branded apparel and accessories in the United States. Dan Loeb’s hedge fund has held a stake in Burlington Stores, Inc. (NYSE:BURL) since Q2 2019. In the fourth quarter of 2021, Third Point owned 1.48 million shares of the company, worth $431.4 million. The fund sold out of its position entirely in Q1 2022.
On April 27, Loop Capital analyst Laura Champine lowered the price target on Burlington Stores, Inc. (NYSE:BURL) to $135 from $175 and reiterated a Sell rating on the shares after the Q1 earnings miss. The analyst maintained a negative view on the company based on her previous observation of understocked stores, particularly in outerwear and branded apparel. She observed that wage inflation is impacting Burlington Stores, Inc. (NYSE:BURL) significantly.
According to Insider Monkey’s Q1 database, 38 hedge funds were bullish on Burlington Stores, Inc. (NYSE:BURL), compared to 39 funds in the preceding quarter. Phill Gross and Robert Atchinson’s Adage Capital Management is the largest shareholder of the company, with 2.3 million shares worth $423.70 million.
Here is what Ariel Investments has to say about Burlington Stores, Inc. (NYSE:BURL) its Q1 2021 investor letter:
“Burlington is a leading off-price retailer offering an assortment of apparel, footwear, home, beauty and toys. Shares have risen as investors are increasingly optimistic the company will benefit from higher consumer spending this year with the US economy expected to reopen. In addition to this cyclical tailwind, we believe the company has several internal drivers and a relatively new CEO is spearheading. These include growing its store footprint through smaller formats (~30,000 square feet versus ~50,000 square feet) as it adapts to the evolving brick-and-mortar retail landscape, and closing its sizable margin gap with peers TJ Maxx and Ross by strengthening its merchant team, purchasing inventory items in-season (reacting to sales trends in real time) and reducing store inventory levels (fewer markdowns, higher merchandise margins).”
2. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 78
Comcast Corporation (NASDAQ:CMCSA) is a Pennsylvania-based company that operates in the media and technology sectors worldwide. The company has five segments – Cable Communications, Media, Studios, Theme Parks, and Sky. Dan Loeb’s Third Point owned 2 million shares of Comcast Corporation (NASDAQ:CMCSA) in the fourth quarter of 2021, worth $100.66 million. The hedge fund dumped the entirety of its stake in Q1 2022.
On April 29, Morgan Stanley analyst Benjamin Swinburne lowered the price target on Comcast Corporation (NASDAQ:CMCSA) to $55 from $60 and kept an Overweight rating on the shares. Despite higher competition in broadband, he continues to see Comcast Corporation (NASDAQ:CMCSA) providing “healthy” EBITDA, EPS, and free cash flow growth, and now at “deeply depressed valuations”, the analyst told investors. While he slashed his net adds outlook, he still views Comcast Corporation (NASDAQ:CMCSA) as “the top pick in an admittedly challenging Cable/Satellite group”, the analyst added.
Among the hedge funds tracked by Insider Monkey, 78 funds were long Comcast Corporation (NASDAQ:CMCSA) at the end of Q1 2022, compared to 80 funds in the earlier quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the leading shareholder of the company, with 30.10 million shares worth $1.40 billion.
Here is what ClearBridge All Cap Growth Strategy has to say about Comcast Corporation (NASDAQ:CMCSA) in its Q4 2021 investor letter:
“Weakness among our holdings in the communication services sector was the other detractor to performance. Comcast was hurt by tepid subscriber growth in its broadband business but demonstrated strong growth in free cash flow, positioning the company for accelerated capital return going forward.”
1. Coupa Software Incorporated (NASDAQ:COUP)
Number of Hedge Fund Holders: 46
Coupa Software Incorporated (NASDAQ:COUP) is an American provider of a cloud-based business spend management platform that connects customers with suppliers around the world. Dan Loeb’s fund added Coupa Software Incorporated (NASDAQ:COUP) to its Q4 2021 portfolio by purchasing 650,000 shares, worth $102.7 million. The hedge fund sold off Coupa Software Incorporated (NASDAQ:COUP) shares completely in Q1 2022.
On April 19, DA Davidson analyst Robert Simmons initiated coverage of Coupa Software Incorporated (NASDAQ:COUP) with a Neutral rating and a $75 price target. The company is the strongest player in the business spend management sector and is on its way to being the market leader, the analyst told investors in a research note.
According to Insider Monkey’s first quarter database, 46 hedge funds were bullish on Coupa Software Incorporated (NASDAQ:COUP), down from 59 funds in the prior quarter. Mick Hellman’s HMI Capital is the largest stakeholder of the company, with more than 2 million shares worth $212.3 million.
Here is what ClearBridge Investments has to say about Coupa Software Incorporated (NASDAQ:COUP) in its Q2 2021 investor letter:
“Within IT, we added positions in Coupa Software, a leader in the fast growing Business Spend Management market with opportunity to double its total addressable market by harnessing B2B payments with its Coupa Pay product; and AppLovin, a leading mobile gaming advertising network in a unique position to utilize its ad expertise to grow its own mobile game business at low user acquisition costs.”
You can also take a look at Top 10 Small-Cap Stocks Added to Billionaire Mario Gabelli’s Portfolio and 10 Best Stocks to Buy Now According to Billionaire Nicholas Pritzker’s Tao Capital.
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Disclosure: None. 10 Stocks Billionaire Dan Loeb is Selling in 2022 is originally published on Insider Monkey.
