5 Stocks Hedge Funds Dumped Before the Market Crash

2. Meta Platforms (FB):

Number of Hedge Funds: 200 (2022Q1)
Number of Hedge Funds: 224 (2021Q4)

The number of bullish hedge fund positions declined by 24 during the first quarter as Facebook shares were sold off after disappointing earnings. Not everyone is bearish though. Facebook is still the 4th most popular stock among hedge funds. Here is what Baron Durable Advantage Fund has to say about Meta Platforms, Inc. (NASDAQ:FB) in its Q1 2022 investor letter:

“Meta Platforms Inc., the parent company of Facebook, reported excellent operating results in 2021. Its revenue increased 37%, operating earnings increased 40%, and the company generated $40 billion of free cash flow. Despite these excellent results, Meta experienced extreme volatility in its stock price during the first quarter. We believe that two factors are responsible for this volatility. First, the company quantified the headwind to revenue from Apple’s recent privacy changes in the amount of approximately $10 billion for 2022. Meta is rebuilding its advertising technology, and we believe the long-term headwinds from Apple’s privacy changes will be limited because Meta will create a suitable solution. Second, Meta continues to invest heavily into its Reality Labs segment, also known as the metaverse. While we believe the metaverse presents great opportunity for Meta, we are not assigning any value to it in our valuation work. While 2022 may be challenging for Meta, the company’s competitive advantages are still intact, and the company trades at a significant discount to our estimate of its intrinsic value. Despite our concerns about a possible recession, we expect Meta to return to double-digit bottom line growth next year.”