In this article, we discuss 8 stocks to sell according to billionaire Louis Bacon. If you want to skip our detailed analysis of these stocks, go directly to 5 Stocks To Sell According To Billionaire Louis Bacon.
Louis Bacon is an American investor and hedge fund manager who founded Moore Global Investments in 1989, which is a New York-based hedge fund with a Q4 13F portfolio worth over $5 billion, as well as discretionary assets under management of $30.3 billion. Louis Bacon invests primarily in the materials, information technology, industrials, healthcare, finance, consumer discretionary, and communications sectors.
In 1981, Louis Bacon completed his MBA from Columbia University, and he has worked at the Bankers Trust, Walter N. Frank & Co., New York Cotton Exchange, and Shearson Lehman Brothers over the course of his career. Louis Bacon founded Remington Trading Partners in 1987, and his investment strategies allowed him to profit during the market crash. In 1989, Bacon founded Moore Capital Management, using a $25,000 inheritance as seed money.
According to the 13F filings from the fourth quarter of 2021, Moore Global Investments made new purchases in 156 securities, bought additional shares in 47 stocks, sold out of 216 equities, and reduced holdings in 95 companies. The top buys at Louis Bacon’s hedge fund included The Walt Disney Company (NYSE:DIS), Workday, Inc. (NASDAQ:WDAY), and Mondelez International, Inc. (NASDAQ:MDLZ). Whereas, Moore Global Investments reduced holdings in Moderna, Inc. (NASDAQ:MRNA), Canadian National Railway Company (NYSE:CNI), and Adobe Inc. (NASDAQ:ADBE).
The most notable stocks in the fourth quarter portfolio of Louis Bacon’s Moore Global Investments include ServiceNow, Inc. (NYSE:NOW), Microsoft Corporation (NASDAQ:MSFT), and Mastercard Incorporated (NYSE:MA).
Our Methodology
We used the 13F portfolio of Louis Bacon’s Moore Global Investments for this analysis, selecting significant stocks sold by the fund as of Q4 2021.
Stocks To Sell According To Billionaire Louis Bacon
8. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 95
Thermo Fisher Scientific Inc. (NYSE:TMO) is a Massachusetts-based supplier of analytical equipment and instruments, laboratory reagents, consumables, science software, and related services. Louis Bacon, as of Q3 2021, acquired a stake in Thermo Fisher Scientific Inc. (NYSE:TMO) worth $33.78 million, which he sold off entirely in the fourth quarter.
Thermo Fisher Scientific Inc. (NYSE:TMO) posted its Q4 earnings on February 2. The company announced an EPS of $6.54, exceeding estimates by $1.27. Revenue for the quarter came in at $10.70, surpassing consensus estimates by $1.45 billion.
On November 4, Thermo Fisher Scientific Inc. (NYSE:TMO) declared a quarterly dividend of $0.26 per share, in line with previous. The dividend was paid on January 14, to shareholders of record on December 15.
Wells Fargo analyst Dan Leonard lowered the price target on Thermo Fisher Scientific Inc. (NYSE:TMO) on February 3 to $605 from $700 and kept an Equal Weight rating on the shares following the fourth quarter results. The analyst believes post-pandemic expectations are too high.
According to the Q4 database of Insider Monkey, 95 hedge funds reported owning stakes in Thermo Fisher Scientific Inc. (NYSE:TMO), totaling $9.4 billion, up from 94 funds in the quarter earlier, holding stakes in Thermo Fisher Scientific Inc. (NYSE:TMO) worth $8.2 billion. Fisher Asset Management is the biggest Thermo Fisher Scientific Inc. (NYSE:TMO) stakeholder, with a $1.4 billion position in the company.
While Louis Bacon held significant stakes in ServiceNow, Inc. (NYSE:NOW), Microsoft Corporation (NASDAQ:MSFT), and Mastercard Incorporated (NYSE:MA), he chose to discard shares of Thermo Fisher Scientific Inc. (NYSE:TMO) entirely.
7. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 92
Louis Bacon added Booking Holdings Inc. (NASDAQ:BKNG) to his portfolio in the third quarter of 2021, buying 15,727 shares of the company, worth $37.3 million. He chose to sell the entirety of his stake in Q4 2021. Booking Holdings Inc. (NASDAQ:BKNG) is a travel technology company that operates multiple travel fare aggregators and travel fare metasearch engines.
On November 23, Booking Holdings Inc. (NASDAQ:BKNG) entered into an agreement with CVC Capital Partners to acquire the global flight booking provider, Etraveli, for approximately €1.63 billion. Etraveli will remain headquartered in Sweden and operate as an independent business under Booking Holdings Inc. (NASDAQ:BKNG), led by their current management team.
Piper Sandler analyst Thomas Champion lowered the price target on Booking Holdings Inc. (NASDAQ:BKNG) to $2,470 from $2,750 and kept a Neutral rating on the shares on January 10. While omicron headlines have “clouded the picture, the longer-duration trajectory remains one of steady recovery”, the analyst told investors in a research note. The analyst expects travel in the U.S. in 2022 to look much closer to 2019 levels than it did in 2020 and 2021. However, he “tweaked lower” his long-term estimates for Booking Holdings Inc. (NASDAQ:BKNG).
The fourth quarter database of Insider Monkey suggested that 92 elite hedge funds were bullish on Booking Holdings Inc. (NASDAQ:BKNG), down from 96 funds in the preceding quarter. Harris Associates held the leading stake in Booking Holdings Inc. (NASDAQ:BKNG) as of Q4 2021, with 668,851 shares worth $1.60 billion.
Here is what Wedgewood Partners has to say about Booking Holdings Inc. (NASDAQ:BKNG) in its Q4 2021 investor letter:
“Booking Holdings also contributed to performance, though less so compared to most portfolio holdings. The Company reported substantial room-night growth compared to the year ago period, which was heavily affected by COVID. Intra-quarter, Booking Holdings consolidated room-nights approached almost 90% of pre-COVID levels because both domestic and international travelers have had to endure a few years of pent-up travel aspirations and are being eased back into the market with various governments relaxing some of their most stringent, COVID-related travel restrictions. Although infection rates related to new COVID variants (particularly Omicron) have risen subsequent to last quarter, we think populations around the world are coming to grips with the risk of infection and will inevitably return to spending on travel. Booking Holdings represents a key source of demand for the small and medium sized hospitality industry and has the second largest global booking volume for alternative accommodations. The latter observation is significantly misunderstood by investors and represents substantial upside to the stock, regardless of the timing of the recovery of traditional hospitality spending; hence, we added to our position in Booking Holdings.”
6. Quanta Services, Inc. (NYSE:PWR)
Number of Hedge Fund Holders: 48
Quanta Services, Inc. (NYSE:PWR) is a Texas-based company that provides infrastructure services such as planning, design, installation, program management, maintenance, and repair for the electric power, pipeline, industrial, and communications sectors.
Louis Bacon’s Moore Global Investments acquired a position in Quanta Services, Inc. (NYSE:PWR) in the third quarter of 2021, buying 420,587 shares of the company, worth $47.8 million. He sold out of his Quanta Services, Inc. (NYSE:PWR) stake in the fourth quarter of 2021.
On December 1, Quanta Services, Inc. (NYSE:PWR) declared a $0.07 per share quarterly dividend, which is a 17% increase from its prior dividend of $0.06. The dividend was paid on January 14, to shareholders of record on January 4.
Riley analyst Alex Rygiel on November 5 raised the price target on Quanta Services, Inc. (NYSE:PWR) to $122 from $107 and kept a Neutral rating on the shares following the Q3 earnings beat.
According to Insider Monkey’s fourth quarter database, 48 hedge funds were long Quanta Services, Inc. (NYSE:PWR), with stakes equaling $1.5 billion. Peconic Partners LLC held the leading stake in Quanta Services, Inc. (NYSE:PWR) as of Q4 2021, with 5.5 million shares worth $634 million.
Quanta Services, Inc. (NYSE:PWR) failed to appear in the fourth quarter portfolio of billionaire Louis Bacon, but he continued to maintain his positions in ServiceNow, Inc. (NYSE:NOW), Microsoft Corporation (NASDAQ:MSFT), and Mastercard Incorporated (NYSE:MA).
Here is what ClearBridge Investments has to say about Quanta Services, Inc. (NYSE:PWR) in its Q2 2021 investor letter:
“To highlight this diversification and our active approach, we will discuss a stock that we added this quarter that are well positioned for some of the changes we think are underway: Quanta Services.
Quanta Services is a specialty engineering and construction company that will be a major beneficiary of the multi decade power infrastructure investment we expect to be made to support the energy transition. Based on our estimates, electric transmission capacity needs to triple or quadruple over the next 30 years to meet the demand for a net-zero economy. It is very rare to find investment runways of this length and magnitude, and we think the duration and sustainability of this growth are not reflected in Quanta’s current price. Specifically, we think Quanta’s revenues can triple over the next 20 years, which is well above what the stock currently embeds. This growth could be especially powerful if Quanta is able to expand profit margins as management currently expects, but any combination should allow our investment to compound at an attractive rate in one of the biggest transitions in history.”
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Disclosure: None. 8 Stocks To Sell According To Billionaire Louis Bacon is originally published on Insider Monkey.
