In this article, we discuss 10 stocks that billionaire Andreas Halvorsen is selling.
Ole Andreas Halvorsen is a Norwegian billionaire investor who founded Viking Global, a Connecticut-based hedge fund, in 1999. After graduating from Stanford University in 1990 with an MBA, Andreas Halvorsen worked at Morgan Stanley (NYSE:MS) and Julian Robertson’s Tiger Management, before co-founding Viking Global with Brian Olson and David Ott.
Viking Global’s 13F portfolio is worth $34.4 billion according to the latest regulatory filings for the fourth quarter of 2021, with the fund’s investments focused in the industrial, healthcare, information technology, finance, consumer discretionary, and communications sectors.
In Q4 2021, Viking Global purchased 27 new stocks, bought additional stakes in 26 companies, sold out of 16 equities, and reduced its holdings in 38 securities. The fund’s top buys for the period included Twilio Inc. (NYSE:TWLO), Boston Scientific Corporation (NYSE:BSX), and Workday, Inc. (NASDAQ:WDAY), whereas Viking Global reduced its holdings in McDonald’s Corporation (NYSE:MCD), Fidelity National Information Services, Inc. (NYSE:FIS), and Peloton Interactive, Inc. (NASDAQ:PTON).
The most notable stocks in the fourth quarter portfolio of Andreas Halvorsen’s Viking Global included Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Visa Inc. (NYSE:V).
Ole Andreas Halvorsen of Viking Global
Our Methodology
We used the Q4 2021 portfolio of Andreas Halvorsen’s Viking Global for this analysis, selecting the 10 most notable stocks the billionaire sold in the period. We ranked the securities according to the hedge fund sentiment around the holdings. All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q4 2021 reporting period.
Billionaire Andreas Halvorsen Is Selling These Stocks
10. Ingersoll Rand Inc. (NYSE:IR)
Number of Hedge Fund Holders: 33
Ingersoll Rand Inc. (NYSE:IR) is a multinational company manufacturing diversified machinery and industrial solutions. The company specializes in producing compressors, vacuums, specialized gas and fluid management systems, precision pumps, power tools, and lifting equipment.
Andreas Halvorsen first purchased shares of Ingersoll Rand Inc. in Q1 2020, and by the third quarter of 2021, the billionaire held 3.6 million shares of the company worth $183.5 million. In Q4 2021, he discarded his stake in Ingersoll Rand Inc. entirely.
On February 2, Ingersoll Rand Inc. acquired Houdstermaatschappij Jorc, a Netherlands-based manufacturer of condensate management products, for an all-cash purchase price of €27 million ($30.17 million). Jorc will join the Industrial Technologies and Services segment of Ingersoll Rand Inc..
Baird analyst Michael Halloran lowered his price target on Ingersoll Rand Inc. to $64 from $68 and kept an ‘Outperform’ rating on the shares on January 20, citing the significant internal transformation at the company, an underappreciated growth profile, important margin levers, and capital deployment opportunities.
In Q3 2021, 33 hedge funds held bullish positions in Ingersoll Rand Inc., with stakes valued at $732.8 million, compared to 31 funds in the quarter earlier, holding stakes in Ingersoll Rand Inc. worth $873.4 million. Durable Capital Partners held a leading stake in Ingersoll Rand Inc. in the third quarter of 2021, with 5.4 million shares worth $273.49 million.
Here is what Artisan Global Discovery Fund had to say about Ingersoll Rand Inc. in its Q3 2021 investor letter:
“We also added to Ingersoll Rand. Ingersoll Rand is a global market leader with a broad range of mission-critical flow creation technologies (pumps, compressors, etc.) for industrial and medical applications. Over the past several years, a new management team has repositioned the company toward less cyclical, more profitable businesses, which are supported by a stronger culture of employee engagement and continuous improvement. More recently, the company’s top-line growth has accelerated as the pandemic fades, and margins are benefiting from cost synergies achieved in its merger integration with Gardner Denver (with further runway ahead). This has boosted cash flows and enabled management to resume its successful bolt-on acquisition strategy, acquiring Seepex GmbH, a global leader in positive displacement pumps for end markets such as water, wastewater, food and beverage and chemicals, in Q2. With an increasingly visible organic and acquisition-driven growth capability, characteristics the market appears to be undervaluing, we added to our position at an attractive discount to our PMV estimate.”
9. Bilibili Inc. (NASDAQ:BILI)
Number of Hedge Fund Holders: 35
Bilibili Inc. (NASDAQ:BILI) is a Shanghai-based video sharing website featuring user generated content, and over time the Chinese company evolved into a cloud-based streaming platform with critically acclaimed films and television shows.
Andreas Halvorsen, via Viking Global, acquired a stake in Bilibili Inc. in Q4 2020, and by the third quarter of 2021, the hedge fund held a $36.2 million position in the company. In Q4 2021, Halvorsen discarded his shares of Bilibili Inc. entirely.
Barclays analyst Jiong Shao initiated coverage of Bilibili Inc. on February 8 with an ‘Equal Weight’ rating and a $32 price target. The “rapid growth” of paying members is a validation of Bilibili Inc.’s content strength and market positioning, the analyst told investors in a research note. Shao, however, considers competition the biggest risk to the Bilibili Inc. story.
According to the Q3 database of Insider Monkey, 35 hedge funds were bullish on Bilibili Inc., down from 47 funds in the quarter earlier. Stephen Mandel’s Lone Pine Capital held the biggest stake in Bilibili Inc. as of September 2021, with 8.6 million shares worth approximately $570 million.
Andreas Halvorsen dumped Bilibili Inc. shares in Q4 2021, unlike Amazon.com, Inc., Microsoft Corporation, and Visa Inc., which still make up a significant portion of his portfolio.
Here is what Tao Value had to say about Bilibili Inc. in its Q3 2021 investor letter:
“As witnessed in the past quarter, the government intervention in the Chinese private sector is elevated to an unprecedented level. Given this background, I thoroughly reviewed all our Chinese holdings and made a few changes. We also exited Bilibili (ticker: BILI), given its priced-in valuation in the context of Chinese ADR confidence loss.”
8. Canadian Pacific Railway Limited (NYSE:CP)
Number of Hedge Fund Holders: 38
Viking Global started building a position in Canadian Pacific Railway Limited (NYSE:CP), a freight railway company operating in the United States and Canada, back in Q4 2013. The hedge fund sold out of its Canadian Pacific Railway Limited stake in Q3 2018, before repurchasing shares the following quarter. Similarly, after discarding its stake in Q1 2019, Viking Global acquired a $224.3 million position in Canadian Pacific Railway Limited in Q3 2021, only to dispose of it entirely in the fourth quarter of 2021.
On January 27, Canadian Pacific Railway Limited reported its Q4 earnings, posting EPS of $0.75, missing consensus estimates by $0.01. Its revenue for the period was $1.60 billion, surpassing estimates by $17.41 million.
Desjardins analyst Benoit Poirier lifted his price target on Canadian Pacific Railway Limited to C$114 ($88.97) from C$113 ($88.19) on January 31 and kept a ‘Buy’ rating on the shares.
Canadian Pacific Railway Limited declared a C$0.19 ($0.15) per share quarterly dividend on January 27, in line with its previous payout. The dividend is payable on April 25, to shareholders of record on March 25.
TCI Fund Management held the largest stake in Canadian Pacific Railway Limited in Q3 2021, with 55.8 million shares worth $3.6 billion. Overall, 38 hedge funds were bullish on the stock in the third quarter of 2021.
Here is what ClearBridge International Growth EAFE Strategy had to say about Canadian Pacific Railway Limited in its Q3 2021 investor letter:
“The other major headwind to relative performance in the quarter was Canadian Pacific Railway. The stock has been a strong performer for the Strategy but negative sentiment around its bidding war for U.S. rail operator Kansas City Southern has weighed on the stock since late May. As a result, the cyclical uptick we expected from the company has been masked by the takeover. Indeed, we have been frustrated by the muted performance among Canadian Pacific and other recently added positions in our structural bucket of growth companies with more cyclical business models or that are undergoing a restructuring that should lead to a step change improvement in earnings. As more regions reopen from COVID-19 and spending rebounds, we expect better performance from our structural names, including Airbus and hospitality and food service provider Compass.”
7. Illumina, Inc. (NASDAQ:ILMN)
Number of Hedge Fund Holders: 55
Illumina, Inc. (NASDAQ:ILMN) is a biotechnology company that serves the sequencing, genotyping, gene expression, and proteomics markets with its products and services. Viking Global initially invested in Illumina, Inc. in Q1 2012, and has disposed of the shares completely a few times over the years. The hedge fund exited its position in Illumina, Inc. entirely in the fourth quarter of 2021, discarding 155,319 shares.
Publishing its Q4 results on February 10, Illumina, Inc. posted earnings per share of $0.75, topping estimates by $0.26. Revenue for the quarter jumped 25.71% year-on-year to $1.20 billion, exceeding estimates by $76.17 million.
On February 15, Piper Sandler analyst David Westenberg raised his price target on Illumina, Inc. to $460 from $450 and reiterated an ‘Overweight’ rating on the shares. The earnings call further validated the company’s competitive position and the analyst sees a good setup for 2022 with the stock’s recent selloff.
According to the Q3 database of Insider Monkey, 55 hedge funds held bullish positions in Illumina, Inc., up from 51 funds in the preceding quarter. GuardCap Asset Management, the largest Illumina, Inc. shareholder, owned a $534 million stake in the company in the third quarter of 2021.
Here is what Ensemble Capital Management had to say about Illumina, Inc. in its Q4 2021 investor letter:
“Notable detractors from our performance during the fourth quarter came from our investments in Illumina. Illumina continued to underperform the market for two reasons in our view despite strong fundamentals with revenue growth expected to come in at 40% in 2021 and 17% in 2022. The first is continued uncertainty by the market on regulatory acceptance of the GRAIL acquisition which brings the most advanced and broadest 50 cancer screening tests via a single blood draw. The second headwind for the stock has been a market sentiment shift away from all things biotech, with indicators like the S&P Biotech Index down 11% in the quarter and poster child Moderna down 34%. Illumina’s stock was down 6% during the quarter.”
6. Zoom Video Communications, Inc. (NASDAQ:ZM)
Number of Hedge Fund Holders: 56
Zoom Video Communications, Inc. (NASDAQ:ZM) is an American communications technology firm that has facilitated remote work, online education, and social events, especially during the COVID-19 pandemic. Zoom Video Communications, Inc. was a new arrival in Andreas Halvorsen’s Q3 2021 portfolio, with the billionaire buying 1.17 million shares worth $308.3 million, only to dump his stake entirely in Q4 2021.
Citic Securities analyst Junyun Chen initiated coverage of Zoom Video Communications, Inc. on December 30 with a ‘Buy’ rating and a $260 price target. Zoom Video Communications, Inc.’s stock price has fallen by two-thirds from its peak of last October, mainly due to market concerns about the decline in revenue growth after the pandemic, the loss of small and medium-sized business customers, and competition from Microsoft Teams, according to the analyst. However, he believes the global video conferencing market “maintains a high degree of prosperity” and that despite the competition, Zoom Video Communications, Inc. maintains a “solid leading position.”
Tiger Global Management held the biggest stake in Zoom Video Communications, Inc. in Q3 2021, with 4.76 million shares worth $1.24 billion. Overall, 56 hedge funds were bullish on the stock in the third quarter of 2021, down from 59 funds in the quarter earlier.
In addition to Amazon.com, Inc., Microsoft Corporation, and Visa Inc., hedge funds were big fans of Zoom Video Communications, Inc. in 2021.
Here is what Artisan Partners had to say about Zoom Video Communications, Inc. in its Q1 2021 investor letter:
“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in video conferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”
5. Pinterest, Inc. (NYSE:PINS)
Number of Hedge Fund Holders: 58
Pinterest, Inc. (NYSE:PINS) is a California-based company offering image sharing and pinboards to save ideas. Andreas Halvorsen acquired a stake in Pinterest, Inc. in Q3 2021, purchasing 7.23 million shares of the company, worth $368.4 million. The billionaire disposed of his stake entirely in the fourth quarter of 2021.
On February 3, Pinterest, Inc. reported its earnings for Q4 2021. The company posted EPS of $0.49, beating estimates by $0.03. Revenue for the period jumped roughly 20% year-on-year to $846.66 million, surpassing estimates by $19.42 million. The stock surged almost 13% after the Q4 results went public.
DA Davidson analyst Tom Forte lowered his price target on Pinterest, Inc. to $33 from $45 on February 4 and kept a ‘Neutral’ rating on the shares. The analyst noted that the company’s Q4 results were “better than feared” given the recent weakness in shares, but he prefers to remain on the sideline while waiting for Pinterest, Inc. to turn the corner on engagement.
In Q3 2021, 58 hedge funds in the database of Insider Monkey owned stakes in Pinterest, Inc., down from 63 funds in the quarter earlier. Philippe Laffont’s Coatue Management held a prominent stake in Pinterest, Inc., with 3.72 million shares worth $189.71 million.
Here is what Baron Asset Fund had to say about Pinterest, Inc. in its Q4 2021 investor letter:
“As of December 31, 2021, Baron Asset Fund held 65 positions. The Fund’s 10 largest holdings represented 42.0% of assets, and the 20 largest represented 64.3% of assets. The Fund’s largest weighting was in the IT sector at 31.1% of assets. This sector includes software companies, IT consulting firms, internet services companies, technology distributors, and data processing firms. The Fund held 26.5% of its assets in the Health Care sector, which includes investments in life sciences companies, and health care equipment, technology, and supplies companies. The Fund held 14.7% of its assets in the Industrials sector, which includes investments in research and consulting companies, industrial conglomerates, and machinery companies. The Fund also had significant weightings in Financials at 11.3% of assets and Consumer Discretionary at 7.7% of assets. We also sold Pinterest, Inc., a social media network, because of concerns about the sustainability of its long-term growth rate.”
4. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 73
Headquartered in Montana, Snowflake Inc. (NYSE:SNOW) is an on-demand data warehousing company providing data storage and analytics services. Andreas Halvorsen’s Viking Global acquired shares of Snowflake Inc. in Q3 2020, and by the third quarter of 2021, the hedge fund held 1.4 million shares worth $434.3 million. Viking Global dumped its shares of Snowflake Inc. entirely in Q4 2021.
On February 15, Mizuho analyst Gregg Moskowitz lowered his price target on Snowflake Inc. to $410 from $450 and kept a ‘Buy’ rating on the shares. Although demand for the software sector remained strong, the reduced price targets on “high-growth software vendors” reflect the rising rate environment, according to the analyst.
Among the hedge funds monitored by Insider Monkey, 73 funds were bullish on Snowflake Inc. on September 30, with stakes equaling $14.5 billion, compared to 70 funds in the quarter earlier, holding stakes in Snowflake Inc. worth $12.5 billion. Altimeter Capital Management, the leading Snowflake Inc. stakeholder, held a $6.3 billion position in the company as of Q3 2021.
Here is what Guardian Capital Management had to say about Snowflake Inc. in its Q4 2021 investor letter:
“When we read the quarterly earnings updates, we continue to be impressed by the magnitude of the reallocation of resources within society. For instance, cloud spending is expected to nearly triple by 2025. The migration to the public cloud is a massive opportunity for Snowflake, as well as dozens of companies that are still small private ventures today. The markets for digital commerce, payments, advertising, streaming of content, and information intelligence, are likely to keep compounding at double digit growth rates for the foreseeable future.
No wonder there is much excitement and people feel increasing pressure to participate in wealth creation that is taking place in those fields. While many intelligent capital allocators understand the value that is to be found in investing in internet-enabled businesses, the fear of timing and valuation has been high for years. The shift in thinking and the new mental models required to transition from linearly growing companies to some of the most scalable business models is hard. It becomes even harder when having to do the homework in an echo chamber of worried market observers constantly pointing at rising stock prices combined with the ‘I told you so’ crowd that are flourishing nowadays.
All in all, we are convinced that the podium on which we are focused – the data-driven, cloudnative, founder-led, businesses that enable people to play and work digitally – is where the magic happens for a long time to come. What matters to us is whether the businesses are worth at least double in 2025. We think that when we will be looking back at today’s prices in 2030, they will likely look like bargains for several businesses.”
3. Activision Blizzard, Inc. (NASDAQ:ATVI)
Number of Hedge Fund Holders: 80
Activision Blizzard, Inc. (NASDAQ:ATVI) is a California-based video game company that is set to be acquired by Microsoft Corporation in a $69 billion deal. Activision Blizzard, Inc. declared a $0.47 per share annual dividend on February 3, payable on May 6.
Publishing its Q4 results on February 3, Activision Blizzard, Inc. posted earnings per share of $1.25, missing estimates by $0.07. The $2.49 billion revenue it pulled in represented an 18.49% year-over-year decline, missing estimates by roughly $342 million.
On February 4, Benchmark analyst Mike Hickey raised his price target on Activision Blizzard, Inc. to $100 from $95 and kept a ‘Buy’ rating on the shares. According to the analyst, investors will either be awarded with an approximate 20% upside to Microsoft’s $95 bid or 27% upside to Benchmark’s fiscal 2023 valuation target if the deal is blocked.
A total of 80 hedge funds held long positions in Activision Blizzard, Inc. in the third quarter of 2021, up from 78 funds in the preceding quarter. D E Shaw owned the leading stake in Activision Blizzard, Inc., with 9.8 million shares worth $765.25 million.
Here is what Cooper Investors had to say about Activision Blizzard, Inc. in its Q4 2021 investor letter:
“In our previous letter we discussed the Responsible Investing aspects around the workplace issues disclosed earlier in the year at Activision Blizzard. Subsequently, further information emerged including allegations and anecdotes of historic awareness and inaction to the issues within the ranks of executive management. So too the latest earnings announcement saw the Blizzard studio push out several game launches, a very real consequence of workplace issues in a human capital-based business. The remedial efforts required are greater than we originally thought and the position was sold in what has been a disappointing experience.”
2. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 95
Headquartered in Minnesota, UnitedHealth Group Incorporated (NYSE:UNH) is a multinational insurance and managed healthcare company. Viking Global started building a position in UnitedHealth Group Incorporated in Q4 2016, and by the third quarter of 2021, the hedge fund held a $283.8 million stake in the company. Andreas Halvorsen completely disposed of his position in UnitedHealth Group Incorporated in Q4 2021.
On January 19, UnitedHealth Group Incorporated posted its Q4 earnings, announcing EPS of $4.48, exceeding estimates by $0.17, while revenue came in at $73.74 billion, outperforming estimates by $774.36 million.
SVB Leerink analyst Whit Mayo raised his price target on UnitedHealth Group Incorporated to $550 from $480 on January 26 and kept an ‘Outperform’ rating on the shares. The analyst observed that the company’s Q4 results were as expected. However, against political risks and COVID-19 gradually fading away, he can see the stock pushing a premium against the S&P 500.
Rajiv Jain’s GQG Partners held the biggest stake in UnitedHealth Group Incorporated at the end of September, with 3.6 million shares worth $1.4 billion. Overall, 95 hedge funds were bullish on the stock in the third quarter of 2021.
Here is what Third Point Management had to say about UnitedHealth Group Incorporated in its Q3 2021 investor letter:
“UnitedHealth is one of the largest healthcare companies in the world and a market leader in both its insurance and healthcare services (Optum) businesses. We initiated our position during the 2020 Presidential election at a time of heightened political and regulatory uncertainty.
We believe under its new CEO, Andrew Witty, UnitedHealth can not only preserve its market dominance and sustain industry-leading growth rates across most of its key segments but also enter new healthcare services markets. Witty is known as a mission-driven CEO who clearly articulates his view that providing high-quality, affordable health care services is a social good. He receives consistently high marks from former colleagues, and we believe that his leadership approach will ballast and even strengthen UNH’s already impressive management and employee ranks. The insurance and services businesses are synergistic and complementary, which entrenches United’s critical role in care financing, access, and management. This dynamic gives us confidence in the durability of United’s market leadership…” (Click here to see the full text)
1. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 106
Viking Global dumped its Netflix, Inc. (NASDAQ:NFLX) stake entirely in Q4 2021. The hedge fund initially invested in Netflix, Inc. in Q2 2014, and by the third quarter of 2021, held 410,913 shares of the company worth $250.7 million. Netflix, Inc. is a digital streaming and original production company based in California.
Netflix, Inc. reported its results for Q4 on January 20, announcing EPS of $1.33, beating the market consensus by $0.51. Revenue for the period came in at $7.71 billion, surpassing estimates by $2.24 million.
On January 31, Citi analyst Jason Bazinet upgraded Netflix, Inc. to ‘Buy’ from ‘Neutral’ with a price target of $450, down from $595. Although prevailing equity values don’t assume material sub growth or improving subscriber economics beyond 2023, the analyst believes that Netflix, Inc. has “ample pricing power”.
Among the hedge funds tracked by Insider Monkey in Q3 2021, 106 were bullish on Netflix, Inc., down from 113 funds in the prior quarter. Fisher Asset Management held a $2.5 billion stake in Netflix, Inc. in the third quarter.
Here is what Rowan Street Capital had to say about Netflix, Inc. in its Q4 2021 investor letter:
“It’s always good to remind ourselves of what we are trying to really do here in the first place?
As we constantly repeat this in almost all annual letters, our goal from day one was to compound our investor’s capital at double-digit returns over the long run.
Now, everyone loves outsized returns. We could compare a strong track record of long-term returns to a fit body. Both need a lot of patience, discipline and both require you to “pay the price.” The reality is that the majority of people lack patience, lack discipline and are just not willing to “pay the price.” We all know what paying the price in fitness really means, but let’s take a look at what that means in investing.
Let’s look at an example of Netflix stock performance since 2010 and compare that to the S&P 500 index. As you can tell from the chart below, the difference over the past 12 years has been absolutely staggering and leaves anyone salivating over these kinds of returns (6,981% for NFLX vs. 312% for the S&P 500).
(Click here to see the charts)
With that, now let’s take a look at the “Cost of Admission” in order to generate these kinds of returns. We want to show you the painful drawdowns over the same time period since 2010. Here, you had a couple of 80% drawdowns back in the 2011-2013 time period, a bunch of 40% drawdowns, and countless 20%+ drawdowns.
So, the question is how many people do you think actually were able to withstand the volatility of Netflix stock over the last 12 years, pay the price and hold it all the way through? During the investment period shown above, Netflix was up almost seventy-fold, and this volatility is the price you had to pay to get it. A lot of market participants are striving for these outsized returns, but just don’t want to pay that price. It seems too risky and they try to cling towards safety without realizing that this is the cost of admission for above average returns.
The good news is that at Rowan Street we do have the patience, the discipline and are very willing to ’pay the price’ in order to achieve the long-term results we have outlined. All that we ask of you, our Limited Partners, is to trust our process and to allow us to do what we do best — compound your hard-earned capital over time. If you can do that, our partnership will work like magic — we are confident in that! In addition, you should derive some comfort in that the majority of our net worth is invested in Rowan Street alongside you (we like to eat our own cooking). We want our partners’ financial fortunes to move in lockstep with ours.”
You can also take a look at Warren Buffett’s Performance in 2021: 10 Best Stock Picks and 10 New Stock Picks of Suraj Parkash Chopra’s Force Hill Capital Management.
Follow Insider Monkey on Twitter
Suggested articles:
- Charlie Munger’s Daily Journal Portfolio: Top Stock Picks
- Billionaire Michael Hintze Portfolio: Top 10 Stock Picks
- 10 Value Arbitrage Stocks Sabrepoint Capital is Buying
This article is originally published at Insider Monkey.
