In this article, we will discuss 10 stocks to sell now according to Julian Robertson’s hedge fund.
Julian Robertson has earned the title “Wizard of Wall Street” for his legendary investment strategies that helped him beat the S&P 500 by large margins in the past. The legendary billionaire investor and philanthropist founded his hedge fund, Tiger Management, back in 1980 with an initial capital of $8 million. In 1988, the Wall Street legend grew his initial capital by roughly 3 times and turned it into $22 million. Fast forward to 1996, Tiger Management’s portfolio came to a whopping $7.2 billion in value.
Mr. Robertson’s trading strategies have a remarkable track record in the hedge fund industry, having returned a median of 31.7% annually between 1980 and 1998, his peak years. This is compared to the S&P 500’s median return of 12.7% per year over the same period. The billionaire followed a long-short approach toward stock investing. Mr. Robertson has reportedly said:
“Our mandate is to find the 200 best companies in the world and invest in them, and find the 200 worst companies in the world and go short on them. If the 200 best don’t do better than the 200 worst, you should probably be in another business.”
Julian Robertson closed Tiger Management to outside investors in 2000, but the fund continues to operate today with investments in both public and private equity. As of 2001, Tiger Management’s public equity business invests in growth companies that have remarkable management teams. As of 2003, the fund’s private equity division has invested in hundreds of companies that span over 30 countries around the world.
According to the fund’s Q1 2022 SEC filings, Tiger Management has initiated seven new positions and exited 13 of its Q4 2021 positions. The fund has a top ten holdings concentration of 51.09% and has the majority of its investments in the technology and financials segments. Among the top stocks discarded by billionaire investor Julian Robertson’s Tiger Management, we have Enphase Energy, Inc. (NASDAQ:ENPH), Tesla, Inc. (NASDAQ:TSLA), and Mastercard Incorporated (NYSE:MA).
Our Methodology
To come up with the 10 stocks to sell now according to Julian Robertson’s hedge fund, we reviewed Tiger Management’s 13F portfolio at the end of the first quarter of 2022. We picked stocks that Tiger Management held significant stakes in Q4 2021, and completely exited in Q1 2022. Along with each stock we have also mentioned the hedge fund sentiment and analyst rating for it.
The hedge fund sentiment was derived from Insider Monkey’s database, which as of the first quarter of 2022, tracks 912 elite hedge funds.
Stocks to Sell Now According to Julian Robertson’s Hedge Fund
10. Wix.com Ltd. (NASDAQ:WIX)
Number of Hedge Fund Holders: 24
Wix.com Ltd. (NASDAQ:WIX) operates a cloud-based platform that enables anyone to create a website or web application in North America, Europe, Latin America, Asia, and internationally. The company was founded in 2006 and is headquartered in Tel Aviv, Israel. Tiger Management sold its stakes of $0.78 million in Wix.com Ltd. (NASDAQ:WIX) in Q1 2022.
On May 17, Needham analyst Bernie McTernan lowered his price target on Wix.com Ltd. (NASDAQ:WIX) to $85 from $125 while maintaining a Buy rating on the shares. McTernan cited the company’s weak second-quarter earnings and weak full-year guidance catalyzed by macroeconomic headwinds.
By the end of the first quarter of 2022, 24 hedge funds held stakes in Wix.com Ltd. (NASDAQ:WIX). The value of these stakes was estimated to be $558.89 million, down from $821.01 million in the preceding quarter with 29 positions.
Wix.com Ltd. (NASDAQ:WIX) is one of the top stocks to sell now according to billionaire Julian Robertson’s Tiger Management. Other notable stocks Tiger Management discarded in Q1 2022 include Enphase Energy, Inc. (NASDAQ:ENPH), Tesla, Inc. (NASDAQ:TSLA), and Mastercard Incorporated (NYSE:MA).
Baron Funds, an asset management firm, recently published its “Baron Asset Fund” first-quarter 2022 investor letter in which it mentioned Wix.com Ltd. (NASDAQ:WIX). Here is what the firm said:
“Underperformance of IT investments, lack of exposure to the Energy sector, which was driven sharply higher by spiking oil prices, and greater exposure to lagging life sciences tools & services stocks within Health Care detracted the most from relative results. Weakness in the sector also stemmed from website development platform Wix.com Ltd. (NASDAQ:WIX). Wix’s stock declined after the company experienced a slowdown in new customer additions in the aftermath of pandemic-related trends.”
9. Li Auto Inc. (NASDAQ:LI)
Number of Hedge Fund Holders: 28
Li Auto Inc. (NASDAQ:LI) is a leading Chinese electric vehicle manufacturer. At the end of Q1 2022, Tiger Management discarded its 34,900 shares of Li Auto Inc. (NASDAQ:LI), or stakes of $1.12 million, and exited the stock completely.
Shortly after the company released its earnings, BofA analyst Ming Hsun Lee lowered his price target on Li Auto Inc. (NASDAQ:LI) to $33 from $35 but reiterated a Buy rating on the shares. The analyst is impressed with the company’s new model pipelines but is wary of the prevailing uncertainty in areas of supply chain and consumption power.
By the end of the first quarter of 2022, 28 hedge funds held stakes in Li Auto Inc. (NASDAQ:LI) that were valued at $1.25 billion. This is compared to 24 hedge funds in the prior quarter with stakes worth $1.10 billion. The hedge fund sentiment for the stock is positive.
8. Momentive Global Inc. (NASDAQ:MNTV)
Number of Hedge Fund Holders: 38
Momentive Global Inc. (NASDAQ:MNTV) provides Software-as-a-Service solutions that help businesses turn stakeholder feedback into action in the United States and internationally. At the close of Q1 2022, 38 hedge funds were long Momentive Global Inc. (NASDAQ:MNTV) with stakes worth $545.97 million. Tiger Management was not one of these, as the fund discarded its 0.23 million shares in the company at the end of this March and completely let go of the stock.
On May 4, Momentive Global Inc. (NASDAQ:MNTV) released its earnings report for the fiscal first quarter of 2022. The company generated quarterly revenues of $116.99 million, up 14.36% year over year, beating revenue estimates by $0.89 million.
Shortly after the company’s earnings release, Craig-Hallum analyst Chad Bennett upgraded Momentive Global Inc. (NASDAQ:MNTV) to Buy from Hold with an $18.50 price target.
Here is what ClearBridge Investments had to say about Momentive Global Inc. (NASDAQ:MNTV) in its “Mid Cap Strategy” third-quarter 2021 investor letter:
“During the quarter we also initiated a position in Momentive Global in the IT sector. Known for its online survey brand Survey Monkey, Momentive is capitalizing on the growing importance of customer feedback, market research and employee engagement. Momentive’s competitive positioning through low-cost pricing has helped it achieve strong brand recognition, with its business enterprise division generating high growth rates and attractive incremental margins.”
7. Toast, Inc. (NYSE:TOST)
Number of Hedge Fund Holders: 39
Toast, Inc. operates a cloud-based and digital technology platform for the restaurant industry in the United States and Ireland.
On May 13, Canaccord analyst David Hynes trimmed his price target on Toast, Inc. (NYSE:TOST) to $25 from $34 but maintained a Buy rating on the shares. Hynes noted that the demand for the company’s products appears to be solid and further mentioned the management’s comments about concentrating investments in areas with a proven return profile.
At the close of Q4 2021, Tiger Management had stakes of $0.86 million in Toast, Inc. (NYSE:TOST). The investment accounted for 0.17% of its 13F portfolio. In Q1 2022, Tiger Management sold its stake in Toast, Inc. (NYSE:TOST) and completely exited the stock.
By the end of Q1 2022, 39 hedge funds held stakes in Toast, Inc. (NYSE:TOST). The total value of these stakes came in at $1.47 billion, down from $1.80 billion in the previous quarter with 34 positions.
Baron Funds named several companies in its “Baron Opportunity Fund” third-quarter 2021 investor letter, one of which was Toast, Inc. (NYSE:TOST). Here is what experts at Baron Funds think about the stock:
“Toast, Inc. is a cloud-based end-to-end technology platform purpose-built for the restaurant industry. Its platform provides a comprehensive suite of cloud software products and financial technology solutions to its customers to connect front-of-house with back-of-house operations across all customer channels. Toast’s core module is its point-of-sale software solution and requires all customers to use Toast as their payment processor. Customers then have the option to bundle or add-on additional modules across operations, digital ordering and delivery, marketing and loyalty, team management, and back office. Toast today powers 48,000 restaurants within the 860,000 U.S. restaurant industry, largely focusing on small- and medium-sized (“SMB”) restaurant customers (generally fewer than 10 locations but up to 50), with some larger enterprise customers as well. Toast is the clear market leader in SMB restaurant technology with the best product offering and only full, end-to-end platform. We believe that as restaurants continue to invest in technology at an accelerated pace emerging from COVID, Toast will be a big beneficiary given its leading market position and best-in-class product. At less than 6% penetration of U.S. restaurants and 3% penetration of its $15 billion recurring-revenue TAM, Toast has a long runway for growth by signing on additional locations to the platform and increasing the attach rate of its value-add modules. Only 54% of customers today use 4 or more of Toast’s 10-plus modules, each of which provide significant value to the customer and would drive Toast’s recurring revenue stream higher.”
6. Five9, Inc. (NASDAQ:FIVN)
Number of Hedge Fund Holders: 52
Five9, Inc. (NASDAQ:FIVN) is a California-based provider of cloud software for contact centers in the United States and internationally. Tiger Management sold its $1.67 million stakes in the company in Q1 2022 and completely exited the stock. The investment represented 0.32% of its Q4 2021 investment portfolio.
This May, Jefferies analyst Samad Samana slashed his price target on Five9, Inc. (NASDAQ:FIVN) to $125 from $130 while maintaining a Buy rating on the shares.
By the close of Q1 2022, 52 hedge funds were long Five9, Inc. (NASDAQ:FIVN). The total stakes of these funds were valued at $2.11 billion. This is compared to 56 positions in the previous quarter with stakes worth $2.56 billion.
In addition to Enphase Energy, Inc. (NASDAQ:ENPH), Tesla, Inc. (NASDAQ:TSLA), and Mastercard Incorporated (NYSE:MA), Five9, Inc. (NASDAQ:FIVN) is a stock to sell now according to billionaire Julian Robertson’s Tiger Management.
5. Enphase Energy, Inc. (NASDAQ:ENPH)
Number of Hedge Fund Holders: 57
Enphase Energy, Inc. (NASDAQ:ENPH) is a leading home energy solutions provider for the solar photovoltaic industry in the United States and internationally. Analysts are bullish on the stock. On May 2, Truist analyst Bronson Fleig assumed coverage of Enphase Energy, Inc. (NASDAQ:ENPH) with a Buy rating and a $205 price target. However, Julian Robertson’s Tiger Management sold its stakes in the company and discarded Enphase Energy, Inc. (NASDAQ:ENPH) in Q1 2022.
By the end of Q1 2022, 57 hedge funds were bullish on Enphase Energy, Inc. (NASDAQ:ENPH). The total stakes of these hedge funds were estimated at $749.49 million, down from $763.28 million in the previous quarter with 50 positions.
ClearBridge Investments mentioned several companies in its “Sustainability Leaders Strategy” first-quarter 2022 investor letter, one of which was Enphase Energy, Inc. (NASDAQ:ENPH). Here is what experts at ClearBridge think about the stock:
“Enphase Energy (NASDAQ:ENPH) is a key solar holding that should be able to take advantage of greater incentives for solar installations in many geographies. The company was also a strong contributor for the quarter, overcoming pressures of a higher discount rate on their strong projected future earnings, raw material inflation and supply chain challenges as their long-term value was reaffirmed.”
4. JD.Com, Inc. (NASDAQ:JD)
Number of Hedge Fund Holders: 59
Tiger Management owned more than 26,000 shares of JD.Com, Inc. (NASDAQ:JD) in Q4 2021. The fund’s stakes in the company were valued at roughly $1.83 million. Julian Robertson’s fund exited JD.Com, Inc. (NASDAQ:JD) in the first quarter of 2022.
On May 18, Benchmark analyst Fawne Jiang lowered his price target on JD.Com, Inc. (NASDAQ:JD) to $106 from $117 but maintained a Buy rating on the shares. The analyst noted that the company reported strong Q1 results, but guided to a relatively weaker Q2 growth. However, Jiang contended that JD.Com, Inc.’s (NASDAQ:JD) business fundamentals remain robust even during short-term headwinds due to Covid.
At the close of Q1 2022, 59 hedge funds were long JD.Com, Inc. (NASDAQ:JD) with stakes worth $ 5.40 billion. This is compared to 67 positions in Q4 2021 with stakes of $8.75 billion.
Here is what Argosy Investors had to say about JD.Com, Inc. (NASDAQ:JD) in its third-quarter 2021 investor letter:
“We sold JD as a result of the furor over Chinese stocks during the quarter. We had been concerned about China’s lack of respect for investor rights for some time, and Beijing has become significantly more aggressive in asserting itself of late. In addition, the legal structure Chinese companies use to come public in the U.S., a Cayman Islands shell corporation leaves American investors with an unsure path to recovering value should these companies cease to trade on U.S. exchanges. Because of the uncertainty, we exited our position in JD completely. We still love JD’s long-term prospects, but we cannot estimate the legal/regulatory risk associated with these companies anymore. More broadly, we are freeing up cash for some other positions we already own which have declined in this market, and after additional review, remain attractive.”
3. Twilio Inc. (NYSE:TWLO)
Number of Hedge Fund Holders: 75
At the end of Q4 2021, Tiger Management’s stakes in Twilio Inc. (NYSE:TWLO) were valued at $2.63 million. However, in Q1 2022 the billionaire’s fund sold its 10,000 shares in Twilio Inc. (NYSE:TWLO) and completely discarded the stock.
This May, Wells Fargo analyst Michael Turrin slashed his price target on Twilio Inc. (NYSE:TWLO) to $180 from $225, citing multiple compressions across the software sector. However, the analyst maintained an Overweight rating on the Twilio Inc. (NYSE:TWLO) shares.
At the end of Q1 2022, 75 hedge funds held stakes in Twilio Inc. (NYSE:TWLO) worth $3.25 billion. This is compared to 80 positions in Q4 2021 with stakes of $5.13 billion.
RiverPark Funds, an investment management firm, published its “RiverPark Large Growth Fund” third-quarter 2021 investor letter in which it mentioned Twilio Inc. (NYSE:TWLO). Here is what the firm said:
“Twilio: TWLO shares were also down sharply to end the year. Just like after 1Q and 2Q, despite another quarterly beat in 3Q, management guidance–which we believe to be conservative– disappointed some investors. Third quarter revenue of $740 million was up 65% year over year, significantly exceeding management’s guidance of 50%-52% revenue growth. Management guided 4Q21 revenue to +40% revenue growth, which was ahead of sell side expectations, but likely below buy side expectations. Investors were also troubled by the departure of COO George Hu, who has been credited with rebuilding Twilio’s sales and marketing teams after arriving from SaleForce.com shortly after the company’s IPO in 2016.
The COVID crisis has accelerated the adoption of the company’s cloud-based, integrated communications platform that allows companies in a wide range of businesses to embed digital communications capabilities (video, chat, voice, SMS, fax, and email) into their customer facing applications without needing to build back-end infrastructure and interfaces. Twilio’s total addressable market is now greater than $40 billion, which should grow by 50% over the next few years, providing a strong secular tailwind for the company. We expect the company’s gross margin to continue to expand from 54% in the second quarter toward management’s long-term goal of 60%-65%, and, as the company grows to scale, we expect its non-GAAP operating margin to expand to 25%.”
2. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 80
While some hedge funds maintained their positions in Tesla, Inc. (NASDAQ:TSLA) in 2022, others discarded them. One of those hedge funds was Tiger Management, which sold its Q4 2021 stakes of $3.33 million in Tesla, Inc. (NASDAQ:TSLA) in Q1 2022 and ultimately exited the stock.
This May, Daiwa analyst Jairam Nathan trimmed his price target on Tesla, Inc. (NASDAQ:TSLA) to $800 from $1,150 and maintained an Outperform rating on the shares.
At the end of Q1 2022, 80 hedge funds were long Tesla, Inc. (NASDAQ:TSLA). The total stakes of these funds were valued at $11.28 billion, down from $12.91 billion in the preceding quarter with 91 positions.
Baron Funds recently published its “Baron Fifth Avenue Growth Fund” first-quarter 2022 investor letter in which it named Tesla, Inc. (NASDAQ:TSLA). Here is what the firm said:
“During the first quarter, we bought back shares in Tesla, Inc., which designs, manufactures, and sells electric vehicles, solar products, energy storage solutions, and batteries. We believe that despite the run in the stock over the last few years, Tesla presents a favorable risk/reward profile and remains a Big Idea with only about 1% market share of the automotive market. Since we bought the stock during the first quarter, shares increased 27.1%, despite a complex supply-chain environment, on continued revenue growth and record profitability. Robust demand and operational optimization allow the company to offset inflationary pressures while vertical integration provides flexibility around supply bottlenecks. Moreover, we expect new localized manufacturing capacity to drive additional efficiencies while software initiatives, including the autonomous driving program, are accelerating, offering valuable optionality to the stock.”
1. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 136
This May, Mastercard Incorporated (NYSE:MA) was removed from BofA’s US 1 list, while its rival Visa Inc. (NYSE:V) was added to it. While BofA expressed bearishness toward Mastercard Incorporation (NYSE:MA), Goldman Sachs expressed its bullishness. This May, Will Nance, an analyst at Goldman Sachs, initiated coverage of MasterCard with a Buy rating and a $460 price target.
Insider Monkey found 136 hedge funds long Mastercard Incorporated (NYSE:MA) at the end of Q1 2022. The total stakes of these hedge funds were valued at $15.44 billion, down from $17.24 billion in Q4 2021 with 144 positions.
Here is what Ensemble Capital had to say about Mastercard Incorporated (NYSE:MA) in its first-quarter 2022 investor letter:
“Mastercard (7.6% weight in the Fund): This company literally earns a percent based fee on dollars spent. When inflation increases the prices of goods across the economy, Mastercard’s revenue increases along with inflation. Thus, the company in some respects is perfectly hedged against inflation with their revenue accelerating automatically when inflation surges.”
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Disclose. None. 10 Stocks to Sell Now According to Julian Robertson’s Hedge Fund is originally published on Insider Monkey.
