While it is impossible for average investors to devote the time and resources to stock selection that institutional investors can, a retail investor can achieve superior returns for his or her portfolio by simply mimicking some of the moves of those elite investors. At Insider Monkey, we cover over 800 funds and institutional investors as part of our small-cap strategy (see more details here). Among these 800 funds, we pay special attention to 58 funds which were started or are currently managed by individuals who, through their expertise in finance, have managed to become billionaires. Since most of these funds boast a lengthy track record of outperforming the broader market, we consistently track every move they make, including the stocks they are collectively losing faith in. Having said that, in this article we will analyze the top five stocks which were collectively sold by the billionaire investors in our database during the fourth quarter.
#5 Oracle Corporation (NYSE:ORCL)
– Billionaires with Long Positions (as of December 31): 10
– Value of Billionaires’ Holdings (as of December 31): $800.8 million
Let’s start with Oracle Corporation (NYSE:ORCL), which saw its ownership among the billionaire investors covered by us decline by half, while the aggregate value of those investors’ holdings in the stock decline by 27.2% during the fourth quarter. Shares of the company have declined by over 13% since last June, though they are trading up by 3.72% this year. Analysts feel that Oracle Corporation (NYSE:ORCL) is undervalued with it currently trading at a forward P/E at 13.39, especially when compared to its peers. Some analysts have proposed that to increase its valuation, the company should start focusing more on return on invested capital (ROIC). For its third quarter of fiscal year 2016, the Street expects Oracle Corporation to report EPS of $0.62 on revenue of $9.13 billion. Donald Yacktman‘s Yacktman Asset Management reduced its stake in Oracle Corporation (NYSE:ORCL) by 14% to 22.85 million shares during the fourth quarter.
#4 FedEx Corporation (NYSE:FDX)
– Billionaires with Long Positions (as of December 31): 8
– Value of Billionaires’ Holdings (as of December 31): $1.70 billion
Shares of FedEx Corporation (NYSE:FDX) rose gradually in during October and November, but gave up nearly all of those gains during December. Amid this period, the number of billionaire investors in our system with ownership of the stock fell by six, while the aggregate value of their holdings in it fell by $493 million. Though FedEx Corporation (NYSE:FDX)’s stock has recovered somewhat from the decline it suffered earlier this year, it’s still trading down by 3.71% year-to-date. Like Oracle Corporation, FedEx Corporation is also scheduled to report its latest quarterly financial results next month, with the consensus among analysts being for it to report EPS of $2.34 on revenue of $12.41 billion. On February 23, analysts at Morgan Stanley reiterated their ‘Equal Weight’ rating on the stock and $132 price target. Billionaire Ken Griffin‘s Citadel Investment Group reduced its stake in FedEx by 45% to 362,900 shares during the fourth quarter.
#3 General Motors Company (NYSE:GM)
– Billionaires with Long Positions (as of December 31): 11
– Value of Billionaires’ Holdings (as of December 31): $3.11 billion
Moving on, though the number of billionaire investors in our database with a long position in General Motors Company (NYSE:GM) inched down by three during the fourth quarter, the aggregate value of their holdings in the company saw an increase of $175 million. That inconsistency can be attributed to the over 10% rise in General Motors Company (NYSE:GM)’s stock during the fourth quarter. Shares of General Motors Company have fallen by over 7% so far this year and are currently trading at a really low forward P/E of only 5.47. Analysts believe that at those levels, General Motors’ stock represents a low-risk, high-reward opportunity, since the company has several value-creating factors which will help it deliver an IRR of 15% through 2020. On February 24, analysts at Credit Suisse reiterated their ‘Outperform’ rating and $38 price target on the stock. Larry Robbins was one of the billionaires to close a position in GM during the fourth quarter, with his fund Glenview Capital selling its entire stake of 2.55 million shares.
#2 Priceline Group Inc (NASDAQ:PCLN)
– Billionaires with Long Positions (as of December 31): 11
– Value of Billionaires’ Holdings (as of December 31): $3.78 billion
Priceline Group Inc (NASDAQ:PCLN)’s stock was trading down by over 20% year-to-date until a few weeks ago. Led by better-than-expected fourth quarter financial numbers, Priceline shares made a swift 30% move upwards and are now trading in the green for the year. Whereas analysts had projected the company to report EPS of $11.80 on revenue of $1.96 billion for the quarter, Priceline declared EPS of $12.63 on revenue of $2.00 billion. Though the company’s U.S bookings fell by 7.6% year-over-year during the fourth quarter, its international bookings during the same period were up by 15% year-over-year, despite facing major currency headwinds. The 30 prominent analysts and research houses that cover the stock currently have an average rating of ‘Overweight’ on it, with an average price target of $1,481. In spite of a decline of three to its ownership among the billionaire investors covered by us during the fourth quarter, the aggregate value of their holdings in Priceline Group Inc (NASDAQ:PCLN) during the same period jumped by 48%. Billionaire John Griffin‘s Blue Ridge Capital continued to own 263,900 shares of the company at the end of fourth quarter.
#1 eBay Inc (NASDAQ:EBAY)
– Billionaires with Long Positions (as of December 31): 15
– Value of Billionaires’ Holdings (as of December 31): $1.44 billion
eBay Inc (NASDAQ:EBAY)’s was the 16th-most popular stock among the billionaire investors that we track at the end of the fourth quarter. However, its ownership among those investors slipped by two and the aggregate value of their holdings in it declined by over 28% during the October-to-December period. Shares of eBay Inc (NASDAQ:EBAY) currently trade down by over 11% year-to-date, owing largely to the slump they suffered after the company reported its fourth quarter earnings in late-January. Though the company’s ticket auction platform StubHub has seen tremendous growth in the past few quarters, analysts feel that it alone won’t be enough to push the stock higher and that the company needs to start showing some growth in its core business. On March 2, eBay approached the credit markets to raise $1.5 billion through two separate bond offerings of $750 million each, just nine days after pricing an offering of $750 million in debt. Though the company mentioned the reason for raising the debt as ‘general corporate purposes’, investors feel there is a good chance that some of it will be deployed towards share buybacks. D.E. Shaw, founded by billionaire David E. Shaw, made a nearly three-fold increase to its stake in the company, during the fourth quarter, to almost 7.7 million shares.