5 Stocks You Should Sell According to Motley Fool

4. IPG Photonics Corporation (NASDAQ:IPGP)

Number of Hedge Fund Holders: 25

Percentage Decrease in Stake in Q4: 21%

IPG Photonics Corporation (NASDAQ:IPGP) is a Massachusetts-based company that designs and distributes high-performance fiber lasers, fiber amplifiers, and diode lasers used in various materials processing worldwide. Motley Fool trimmed its IPG Photonics Corporation (NASDAQ:IPGP) stake by 21% in Q4 2021, holding a total of 39,334 shares worth $6.77 million. 

On March 14, Raymond James analyst Brian Gesuale downgraded IPG Photonics Corporation (NASDAQ:IPGP) to Underperform from Market Perform without a price target. According to the analyst, almost every demand and cost input indicator has become negative over the past months, with a negligent chance of significant improvement for IPG Photonics Corporation (NASDAQ:IPGP) in 2022. The analyst believes more downside still exists to IPG Photonics Corporation (NASDAQ:IPGP)’s estimates, and said shares may not have fully reflected possible demand destruction the Europe war brings, incremental share loss risk, and a higher long-term cost structure as the company moves away from Russia, a low cost production region. 

According to Insider Monkey’s Q4 database, 25 hedge funds were long IPG Photonics Corporation (NASDAQ:IPGP), with collective stakes worth $504 million. Jean-Marie Eveillard’s First Eagle Investment Management is the largest shareholder of the company, with 2.30 million shares worth $396.4 million. 

Here is what Artisan Mid-Cap Fund has to say about IPG Photonics Corporation (NASDAQ:IPGP) in its Q3 2021 investor letter:

“IPG Photonics is the leading provider of fiber laser technology for industrial automation markets. Fiber lasers are faster, more powerful and efficient, yet require less maintenance and labor to operate than traditional lasers used in industrial applications—cutting and welding, marking and engraving, and micro-processing. When we initiated our campaign, we believed the company was poised to benefit from additional use cases for fiber lasers, including in the manufacturing processes of electric vehicle batteries and solar panels and in medical applications such as kidney stone removal. However, the company recently indicated supply chain delays and slowing growth in China— nearly 40% of the company’s revenue—were weighing on growth, and the exposure to emerging applications is not yet meaningful enough to offset these headwinds. With limited visibility into when these challenges may abate, we exited our GardenSM position in favor of other industrial technology holdings with stronger fundamental trends.”