In this piece, we will take a look at the 10 stocks to sell according to billionaire Daniel Sundheim.
Mr. Daniel Sundheim is an American hedge fund billionaire at the helms of the fund D1 Capital Partners. D1 Capital Partners is based in New York, New York, United States, and when compared to some of the other hedge funds out there, the firm has the unique distinction of both having a portfolio worth billions of dollars and being relatively young when compared to its peers.
Mr. Sundheim founded D1 Capital in 2018, and since its inception, the fund has impressed its investors by raking in hefty basis points for its annual return. The executive chose the online retailer Amazon.com, Inc. (NASDAQ:AMZN)’s founder Mr. Jefferey Bezos’ management philosophy when naming his fund. This philosophy, dubbed as ‘Day One’ by the Amazon founder, aims to keep a business on its feet by operating as if it were a new player in the industry instead of an established entity. Mr. Bezos developed the strategy after his time at the investment firm D.E. Shaw, which practiced what is dubbed as the ‘regret-minimization framework.’
As far as his personal life goes, Mr. Sundheim is a graduate of the University of Pennsylvania, from where he received his Bachelor’s of Sciences in Finance in 1999. After graduating, the executive would go on to work at the now-infamous Bear Stearns in 1999 as a merchant banker, a position he would occupy for a little over three years. After Bear Stearns, Mr. Sundheim would spend fourteen years at the hedge fund Viking Global Investors. At Viking, where he started working as an analyst in 2002, the now hedge fund owner would go on to become the firm’s chief investment officer before leaving in 2017. A month after leaving, he would go on and start D1 Capital Partners. The billionaire is worth $2.5 billion as of December 2021 according to Forbes Magazine.
D1 Capital, or ‘Day One’ Capital, had a portfolio worth $17 billion as the third quarter of last year ended. It targets companies across several industries such as industrials, technology, media, financial services, and telecommunications. It also invests in equity derivatives (options) and bonds, alongside employing a long-short strategy which covers taking both long and short positions in different companies based on the investor’s opinion of their future.
Some of the top holdings in the firm’s portfolio are Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and The Walt Disney Company (NYSE:DIS).
However, in this piece we will cover the stocks Mr. Sundheim sold during the third quarter of last year.
Daniel Sundheim of D1 Capital
Our Methodology
To find out which companies were axed by Mr. Sundheim’s investment firm during Q3 2021, we took a look at D1 Capital’s 13F filings for the third and picked the stocks the fund sold completely in Q3.
Stocks to Sell According to Billionaire Daniel Sundheim
10. Futu Holdings Limited (NASDAQ:FUTU)
Number of Hedge Fund Holders: 23
Futu Holdings Limited (NASDAQ:FUTU) is an Asian company that provides wealth management and brokerage services in Hong Kong and globally. The company allows its customers to manage their wealth by providing access to a variety of funds, alongside providing them with market data and other brokerage services such as clearing and settlement.
Futu Holdings Limited (NASDAQ:FUTU) earned $222 million in revenue and $0.50 in GAAP EPS for its third fiscal quarter, beating analyst estimates only for revenue. Morgan Stanley reduced the company’s price target to $71.56 in October 2021, stating that regulatory delays will create uncertainty for the stock price.
Mr. Sunheim’s hedge fund sold 94,000 Futu Holdings Limited (NASDAQ:FUTU) shares during the third quarter of last year, for what was previously a $16.8 million stake that comprised 0.11% of its portfolio in Q2 2021. During Q3, 23 of the 867 hedge funds tracked by Insider Monkey owned the company’s shares.
Futu Holdings Limited (NASDAQ:FUTU)’s largest investor is Chase Coleman and Feroz Dewan’s Tiger Global Management LLC who owns 4.1 million shares worth $381 million.
Unlike Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and The Walt Disney Company (NYSE:DIS), in which D1 has major stakes, Futu Holdings Limited (NASDAQ:FUTU) was sold by the hedge fund.
9. Kanzhun Limited (NASDAQ:BZ)
Number of Hedge Fund Holders: 18
Kanzhun Limited (NASDAQ:BZ) is a Chinese company that operates an online recruitment platform. This platform, dubbed BOSS Zhipin, connects job seekers with companies in the People’s Republic of China.
D1 Capital sold 525,000 Kanzhun Limited (NASDAQ:BZ) shares during Q3 2021, which were worth $20.8 million and represented 0.13% of its portfolio in the prior quarter. Insider Monkey’s Q3 2021 survey of 867 hedge funds revealed that 18 owned the company’s shares.
For its third fiscal quarter, Kanzhun Limited (NASDAQ:BZ) brought in $188 million in revenue and $0.13 in earnings per average diluted share (EPADS), pleasing Wall Street and beating estimates for both. Goldman Sachs set the company’s price target to $41 in July 2021, stating that it is China’s largest recruitment platform.
Kanzhun Limited (NASDAQ:BZ)’s largest shareholder is Philippe Laffont’s Coatue Management who owns 23 million shares worth $814 million.
8. Latch, Inc. (NASDAQ:LTCH)
Number of Hedge Fund Holders: 15
Latch, Inc. (NASDAQ:LTCH) is an American enterprise technology company. Its products include a contactless entry system and software that enables several functions such as visitor management and sensor control.
Latch, Inc. (NASDAQ:LTCH) reported a net loss of $34 million and revenue of $11.2 million for its fiscal third quarter. Imperial Capital set a $15 price target for the company in November 2021, outlining its belief that the technology firm has a full suite of applications and services, alongside being uniquely differentiated in its industry.
D1 Capital sold 2.5 million Latch, Inc. (NASDAQ:LTCH) shares in Q3 2021. These were worth $30.6 million and represented 0.2% of its portfolio during the second quarter of last year. In the same quarter that the hedge fund sold shares, 15 of 867 funds part of Insider Monkey’s survey owned the company’s shares.
Zachary Sternberg and Benjamin Stein’s Spruce House Investment Management is Latch, Inc. (NASDAQ:LTCH)’s largest investor. It owns 14 million shares worth $157 million.
7. Bright Health Group, Inc. (NYSE:BHG)
Number of Hedge Fund Holders: 14
Bright Health Group, Inc. (NYSE:BHG) is an American health insurance manager. It offers and finances medical care plans such as Medicare alongside employer health insurance plans.
For its third fiscal quarter, Bright Health Group, Inc. (NYSE:BHG) raked in $1 billion in revenue and -$0.48 in GAAP EPS, missing analyst estimates for EPS and beating them for revenue. Its price target was reduced to $4 from $5 by Morgan Stanley in December 2021, with the bank outlining that shaky performance and higher losses inject more downside risk into the company when compared to its peers.
As the third quarter of last year came to an end, D1 Capital had sold 3.3 million Bright Health Group, Inc. (NYSE:BHG) shares, which were worth $57 million and represented 0.37% of its portfolio in Q2 2021. Insider Monkey’s Q3 2021 research investigating the stakes of 867 hedge funds revealed that 14 owned the company’s shares.
Bright Health Group, Inc. (NYSE:BHG)’s largest investor is Jose Fernandez’s Stepstone Group who owns 44 million shares worth $364 million.
6. Tuya Inc. (NYSE:TUYA)
Number of Hedge Fund Holders: 11
Tuya Inc. (NYSE:TUYA) is an internet of things (IoT) cloud platform provider. This platform allows its users to develop and monetize software services alongside allowing them to connect and manage other smart devices.
Mr. Sundheim’s D1 Capital sold 3.2 million Tuya Inc. (NYSE:TUYA) shares worth $80 million in the third quarter of last year. They represented 0.52% of its portfolio during Q2. In Q3 2021, 11 hedge funds out of 867 owned the company’s shares according to Insider Monkey’s research.
In its third fiscal quarter, Tuya Inc. (NYSE:TUYA)’s revenue stood at $85 million and its non-GAAP EPS stood at -$0.06. The Bank of America reduced the company’s price target to $22 from $25 in May 2021, highlighting that the sector was experiencing a general valuation compression.
Tuya Inc. (NYSE:TUYA)’s largest shareholder is Chase Coleman and Feroz Dewan’s Tiger Global Management LLC who owns 2.8 million shares worth $25 million.
While D1 sold Tuya Inc. (NYSE:TUYA) in the third quarter, the fund remained bullish on major names like The Walt Disney Company (NYSE:DIS), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT) as of the end of September last year.
5. Deckers Outdoor Corporation (NYSE:DECK)
Number of Hedge Fund Holders: 48
Deckers Outdoor Corporation (NYSE:DECK) is an American apparel distributor and designer. Its footwear covers several use cases such as sports and casual wear.
Deckers Outdoor Corporation (NYSE:DECK) brought in $721 million in revenue and $3.66 in GAAP EPS for its second fiscal quarter, in a mixed bag performance that saw it only beat analyst estimates for EPS. Jefferies increased its price target for the retailer to $525 from $475 in November 2021, outlining that two of its brands are highly valuable.
During Q3 2021, Mr. Sundheim’s D1 Capital sold 351,000 Deckers Outdoor Corporation (NYSE:DECK) shares for $134 million. This stake had represented 0.88% of its portfolio in the prior quarter. During the third quarter of last year, 48 of 867 funds polled by Insider Monkey had owned the company’s shares.
Deckers Outdoor Corporation (NYSE:DECK)’s largest investor is Robert Pitts’ Steadfast Capital Management who owns 825,423 shares worth $297 million.
4. Chipotle Mexican Grill, Inc. (NYSE:CMG)
Number of Hedge Fund Holders: 39
Chipotle Mexican Grill, Inc. (NYSE:CMG) operates fast-food restaurants in the United States. These offer five Mexican foods which are tacos, quesadillas, salads, burritos, and bowls.
D1 Capital sold 102,400 Chipotle Mexican Grill, Inc. (NYSE:CMG) shares during the third quarter of last year. During the second quarter, these were worth $158.7 million and represented 1.03% of its portfolio. A survey of 867 hedge funds conducted by Insider Monkey for Q3 2021 revealed that 39 had owned the company’s shares.
Chipotle Mexican Grill, Inc. (NYSE:CMG) had a strong fiscal third-quarter which saw it beat analyst estimates for both revenue and non-GAAP EPS by posting $1.95 billion and $7.02 in the segments, respectively. JPMorgan raised the company’s price target to $1,750 from $1,710 in December 2021, sharing that the price reflects the company’s market penetration capabilities.
Bill Ackman’s Pershing Square is Chipotle Mexican Grill, Inc. (NYSE:CMG)’s largest investor. It owns a stake of $2 billion through 1 million shares.
“Chipotle Mexican Grill owns and operates fast-casual, fresh Mexican food restaurants. The company reported very strong quarterly earnings and an outlook ahead of investor expectations, sending the stock higher. Chipotle’s business is performing well and is accelerating as consumers return to more normalized levels of in-restaurant dining. Additionally, the company has recently implemented some price increases that give Chipotle the flexibility to successfully navigate the higher commodity and wage cost environment.”
3. Unity Software Inc. (NYSE:U)
Number of Hedge Fund Holders: 36
Unity Software Inc. (NYSE:U) is an American software platform provider. This platform allows developers to create their software products only once and then run them on multiple platforms, such as headsets, gaming consoles, and personal computers for monetization.
Unity Software Inc. (NYSE:U)’s fiscal Q3 results saw it beat analyst estimates for revenue by posting $286 in the segment. Additionally, it also beat non-GAAP EPS estimates by posting -$0.06 for the metric. Morgan Stanley substantially increased the company’s price target to $120 from $87 in December 2021. To justify the decision, it outlined that mobile advertisement markets are set to grow in the future.
D1 Capital sold its $435.7 million stakes worth 2.84% of its Q2 2021 portfolio in Unity Software Inc. (NYSE:U) during Q3 2021. During the same time period, 36 of the 867 hedge funds part of Insider Monkey’s research owned the company’s shares.
Unity Software Inc. (NYSE:U)’s largest investor is Jim Davidson, Dave Roux, and Glenn Hutchins’s Silver Lake Partners. This is due to it owning 40 million shares worth $5 billion.
2. Bath & Body Works, Inc. (NYSE:BBWI)
Number of Hedge Fund Holders: 56
Bath & Body Works, Inc. (NYSE:BBWI) is a body-care, home fragrance, and other similar products retailer based out of the United States. The company sells its products in North America and globally. Bath & Body Works, Inc. (NYSE:BBWI) raked in $1.68 billion in revenue and $0.92 in non-GAAP EPS for its fiscal Q3, as it pleased investors and beat Wall Street estimates for both. Goldman Sachs set a $93 price target for the company in December 2021.
Mr. Sundheim’s investment firm sold 6.8 million Bath & Body Works, Inc. (NYSE:BBWI) shares during the third quarter of last year. These were worth $491.6 million and had represented 3.21% of its portfolio in the previous quarter. An Insider Monkey Q3 2021 survey of 867 hedge funds revealed that 56 owned the company’s shares.
Bath & Body Works, Inc. (NYSE:BBWI)’s largest investor during Q2 2021 was Stephen Mandel’s Lone Pine Capital who owned 26 million shares worth a whopping $1.8 billion.
1. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 96
Booking Holdings Inc. (NASDAQ:BKNG) is an online travel services provider whose services allow its customers to make reservations, book rental cars, and airline tickets. It also lets customers manage their travel insurance and restaurant management.
Booking Holdings Inc. (NASDAQ:BKNG) earned $4.68 billion in revenue and $37.70 in non-GAAP EPS for its fiscal Q3, beating analyst estimates for both. RBC Capital raised the stock’s rating to Outperform from Sector Perform in December 2021 but kept its $2,700 price target unchanged.
D1 Capital sold 255,164 Booking Holdings Inc. (NASDAQ:BKNG) shares during Q3 2021. These were worth $558 million and represented 3.65% of its portfolio in Q2 2021. 96 of 867 hedge funds held the company’s shares in the third quarter of last year according to Insider Monkey’s research.
Booking Holdings Inc. (NASDAQ:BKNG)’s largest investor is Natixis Global Asset Management’s Harris Associates who owns 668,053 shares worth a cool $1.5 billion.
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Disclosure: None. 10 Stocks to Sell According to Billionaire Daniel Sundheim is originally published on Insider Monkey.
