In this article, we discuss the 10 stocks billionaire Mario Gabelli is dumping in 2022.
Billionaire investor, financial analyst, and investment advisor Mario Gabelli is the founder, chairman, and chief executive officer of the New York-based investment firm, GAMCO Investors. Managing a $11.07 billion 13F portfolio for his clients as of the first quarter of 2022, Gabelli is recognized as one of the most successful Wall Street financiers. Named Money Manager of the Year by Institutional Investor for 2011, he was a first-generation college student who graduated from the Fordham College of Business Administration in 1965, and later went on to get an MBA from Columbia University Graduate School of Business, and honorary doctorates from Fordham University and Roger Williams University.
Operating as a value-oriented hedge fund and employing an active investment approach, GAMCO Investors holds investments in a wide array of industries, of which the majority percentage is attributed to Industrials, Consumer Cyclicals, Financial Services, and Communications Services sectors. In the first quarter of 2022, GAMCO Investors reported holding stakes in 898 companies, of which 45 were new additions in Q1 2022. Additionally, the hedge fund sold out of 57 equities by the end of the quarter.
Some of the most notable stocks in the first quarter of 2022 portfolio of GAMCO Investors include American Express Company (NYSE:AXP), The Walt Disney Company (NYSE:DIS), and Wells Fargo & Company (NYSE:WFC), among others.
Our Methodology
We used Mario Gabelli’s Q1 2022 portfolio for this analysis, selecting the stocks that his hedge fund sold out of in the period. We have ranked the securities according to the hedge fund sentiment around each stock.
Billionaire Mario Gabelli is Dumping These 10 Stocks in 2022
10. Zentalis Pharmaceuticals, Inc. (NASDAQ:ZNTL)
Number Of Hedge Fund Holders: 20
Zentalis Pharmaceuticals, Inc. (NASDAQ:ZNTL) is a New York-based clinical-stage biopharmaceutical company that is focused on developing clinically differentiated, novel small molecule therapeutics that target biological pathways in cancer. As of March 31, 2022, Zentalis Pharmaceuticals, Inc. had cash, cash equivalents and marketable securities of $289.4 million. Together with approximately $24.7 million of net proceeds from the April 2022 Pfizer equity investments, the company believes that it holds a sufficient amount to fund its operating expenses and capital expenditures requirements into the first quarter of 2024.
Earlier this April Guggenheim analyst Michael Schmidt lowered the price target on Zentalis Pharmaceuticals, Inc. to $67 from $92 and maintained a Buy rating on the shares after the company updated its ZN-c3 monotherapy Phase I data in patients with uterine serous carcinoma, as well as combination Phase I data with chemotherapy in patients with platinum-resistant ovarian cancer.
At the end of the first quarter of 2022, 20 hedge funds held stakes in Zentalis Pharmaceuticals, Inc. worth $661.7 million. This is compared to 21 positions in the previous quarter with stakes of $1.2 billion. Mario Gabelli’s GAMCO Investors sold its entire stake in the company and dumped the stock by the end of Q1.
Unlike American Express Company, The Walt Disney Company, and Wells Fargo & Company, Zentalis Pharmaceuticals, Inc. is one of the stocks Mario Gabelli is letting go of.
9. The Wendy’s Company (NASDAQ:WEN)
Number Of Hedge Fund Holders: 25
The Wendy’s Company (NASDAQ:WEN) operates as one of the world’s largest quick-service hamburger company with more than 6,500 franchise and Company restaurants in the United States and internationally. Despite being a household name in the restaurant industry, shares of The Wendy’s Company have fallen by 23.98% year-to-date as of June 12. Mario Gabelli’s GAMCO Investors dumped the stock in Q1 2022 after selling its 23,500 stakes worth roughly $0.56 million.
On June 9, Barclays analyst Jeffrey Bernstein lowered his price target on The Wendy’s Company to $23 from $25 and kept an Overweight rating on the shares. According to the analyst, restaurants fall within the consumer discretionary sector and with recessionary odds rising, some investors will view restaurants as “uninvestable.” However, the analyst does not believe this to be accurate and states that restaurants exist on the extreme staple-end of consumer discretionary.
At the end of Q1 2022, 25 hedge funds held stakes in The Wendy’s Company. The total value of these stakes came in at $797.9 million, down from $906.7 million in the previous quarter with 26 positions. Nelson Peltz’s Trian Partners was the company’s largest shareholder for the quarter, with total stakes worth more than $556.57 million
8. Toll Brothers, Inc. (NYSE:TOL)
Number Of Hedge Fund Holders: 29
Toll Brothers, Inc. (NYSE:TOL) is a building company which designs, builds, markets, sells, and arranges financing for residential and commercial properties in the United States. Billionaire investor Mario Gabelli sold his hedge fund’s stakes in the company in Q1 2022 due to extremely high mortgage rates that could potentially affect companies involved in the housing market.
Following an upbeat financial performance for its fiscal second quarter of 2022, the Pennsylvania-based homebuilder reported earnings of $1.85 per share, well above $1.01 per share in the same period of 2021. The company also reported revenues of $2.28 billion.
On May 31, Raymond James analyst Buck Horne lowered the price target on Toll Brothers, Inc. to $75 from $82 and maintained an Outperform rating on the shares. According to Horne, the company’s earnings power is unlikely to imminently collapse, even with mortgage rates above 5%. He adds that he does not see a basis to cut estimates as the housing market normalizes, much less to forecast an earnings collapse implied by current valuations.
The number of hedge funds tracked by Insider Monkey that reported holding stakes in Toll Brothers, Inc. declined to 29 in Q1 2022, from 38 in the previous quarter. The total value of these stakes is valued at approximately $616 million. Edgar Wachenheim’s Greenhaven Associates is one of the most notable investors in Toll Brothers, Inc. with over 5.2 million shares worth more than $245 million.
7. Simon Property Group, Inc. (NYSE:SPG)
Number Of Hedge Fund Holders: 35
Simon Property Group, Inc. (NYSE:SPG) is an American real estate investment trust that invests in shopping malls, outlet centers, and community/lifestyle centers. The Indianapolis-based REIT is the largest owner of shopping malls in the United States.
The company declared a quarterly common stock dividend of $1.70 on May 9, 2022, for the second quarter of 2022, an increase of 21.4% on a year-over-year basis. The dividend will be payable on June 30, 2022 to shareholders of record on June 9, 2022.
Earlier this May, Stifel analyst Simon Yarmak lowered his price target on Simon Property Group, Inc. to $165 from $180 and kept a Buy rating on the shares after the company reported Q1 core FFO per share of $2.78. The analyst believes that management will be active in buying back stock at current levels.
In the first quarter of 2022, 35 hedge funds in the database of elite funds tracked by Insider Monkey were bullish on Simon Property Group, Inc., with stakes totaling $688.19 million. The Boston-based investment firm Arrowstreet Capital is one of the leading stakeholders of the company, holding 804,952 shares worth $105.89 million.
Baron Funds mentioned Simon Property Group, Inc. in its Q1 2022 investor letter. Here is what the firm has to say:
“Following a share price gain of more than 97% in 2021, we recently trimmed the Fund’s holdings in Simon Property Group, Inc. (NYSE:SPG), the largest and premier mall operator in the U.S. Though we are also tempered by the expectation for modest earnings growth in 2022, we remain optimistic about the company’s long-term prospects. Simon owns A-quality malls in A-quality geographic locations. We expect Simon to benefit from the ongoing economic recovery and believe management is well positioned to acquire real estate assets given its strong balance sheet and low cost of capital.”
6. Penn National Gaming, Inc. (NASDAQ:PENN)
Number Of Hedge Fund Holders: 36
Penn National Gaming, Inc. (NASDAQ:PENN) is a Pennsylvania-based operator of casinos and racetracks that operates 44 facilities in the United States and Canada, many of them under the Hollywood Casino brand. Some of the services the company offers include casino gaming, online gaming, live racing, sports betting, and digital sports content.
Jefferies analyst David Katz upgraded Penn National to Buy from Hold with a $49 price target on May 18, as he argues that the recent weakness has reduced the shares to a level that “comfortably reflects” the stable cash generation of the land-based casino business while assigning “de minimis value” for the company’s digital prospects.
According to Insider Monkey’s database, Penn National Gaming, Inc. was spotted on 36 investment portfolios by the end of the first quarter of 2022. The total stakes of these funds in the company amounted to approximately $404.9 million. Jim Simons’ Renaissance Technologies is the most prominent investor in Penn National Gaming, Inc. with stakes worth approximately $75.89 million in the company.
As opposed to American Express Company, The Walt Disney Company, and Wells Fargo & Company, Penn National Gaming, Inc. is a stock that GAMCO Investors sold off in Q1.
Carillon Tower Advisers mentioned Penn National Gaming, Inc. in its recently published “Carillon Eagle Small Cap Growth Fund” fourth-quarter 2021 investor letter. Here is what the firm said:
“Penn National Gaming is a diversified omnichannel provider of retail and online gaming, live racing, and sports betting entertainment. The stock sold off a bit after a quarterly update came in slightly below expectations, which was largely a result of the impact that Hurricane Ida and the reemergence of COVID had on its landbased operations. Despite this, the company’s mobile sportsbook app is now live in more than 10 states and continues to gain market share. We are also very bullish on the prospects for the company’s land-based casinos going forward.”
5. Ball Corporation (NYSE:BLL)
Number Of Hedge Fund Holders: 37
Ball Corporation (NYSE:BLL) is an American company that provides sustainable aluminum packaging solutions for beverage, personal care and household products customers, as well as aerospace and other technologies and services to commercial and governmental customers. Mario Gabelli’s GAMCO Investors pulled out of Ball Corporation in Q1 2022, selling off his hedge fund’s Q4 2021 stakes of $0.25 million in the company.
Earlier this May, Ball Corporation announced an agreement to repurchase approximately $300 million of its outstanding common stock in a privately negotiated, accelerated stock repurchase transaction with Mizuho Markets Americas LLC, using cash on hand and available borrowings. This transaction will reduce the company’s outstanding common stock by a total of approximately 4.3 million shares.
Deutsche Bank analyst Kyle White on May 9 lowered the price target on Ball Corporation to $91 from $98 and kept a Buy rating on the shares following the company’s Q1 results.
According to Insider Monkey’s Q1 data, 37 hedge funds were bullish on Ball Corporation, up from 32 funds in the prior quarter. The total stakes held in the first quarter amounted to $814.7 million, compared to $956 million in the earlier quarter. Greg Poole’s Echo Street Capital Management held a prominent position in the company, with more than 1 million shares worth $100.2 million.
Here is what ClearBridge Investments had to say about Ball Corporation in their third-quarter 2021 investor letter:
“Ball, the largest manufacturer of recyclable aluminum beverage cans in North America, bucked headwinds for the materials sector with strong quarterly results and was supported by contracts indicative of further growth.”
4. Shell Plc (NYSE:SHEL)
Number Of Hedge Fund Holders: 37
Shell Plc (NYSE:SHEL) is a British multinational oil and gas company that was formed in 1907 through the merger of Royal Dutch Petroleum Company of the Netherlands and The “Shell” Transport and Trading Company of the United Kingdom. Operating in more than 70 countries, the company stands as a dominant player in the oil and gas market.
Although GAMCO Investors removed its position in Shell Plc during the first quarter of 2022, things are looking bright for the company. On June 9, Credit Suisse analyst Amy Wong initiated coverage of Shell Plc with an Outperform rating and 3,000 GBp price target. According to Wong, Shell Plc’s energy transition strategy stands out as the most progressive in terms of decarbonization and for generating strong cash flow that supports shareholder distributions in the near and medium term.
At the end of the first quarter of 2022, 37 hedge funds in the database of Insider Monkey held stakes worth $5.6 billion in Shell plc (NYSE:SHEL), compared to 41 in the previous quarter worth $2.6 billion. Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Shell plc (NYSE:SHEL), with 19.5 million shares worth more than $1 billion.
Here is what GMO LLC has to say about Shell plc (NYSE:SHEL) in its Q1 2022 investor letter:
“The market is simply not valuing resource companies at reasonable levels given any plausible base case for how the world might play out, in our opinion. With oil prices up around 65% and natural gas prices up hundreds of percent since the beginning of 2020, Shell (NYSE:SHEL), a bellwether for the oil and gas industry, is more or less flat. With the movement in oil and gas prices, one would have expected Shell’s stock price to surge. It didn’t, however, leaving Shell at very attractive valuation levels. At commodity prices as of the end of the first quarter, Shell would be cranking out free cash flow yields of 22-23% for the next few years according to our models.”
3. Moderna, Inc. (NASDAQ:MRNA)
Number Of Hedge Fund Holders: 41
Moderna, Inc. (NASDAQ:MRNA) is an American pharmaceutical and biotechnology company based in Cambridge, Massachusetts, that focuses on transformational therapeutics based on messenger RNA and vaccines for the treatment of infectious diseases, immuno-oncology, rare diseases, cardiovascular diseases, and auto-immune diseases.
On May 31, Moderna, Inc. and The Takeda Pharmaceutical Company announced plans to transfer the marketing authorization in Japan for Moderna’s COVID-19 vaccine Spikevax. As of August 1, Moderna, Inc. will assume responsibility for all Spikevax activities, including import, local regulatory, development, quality assurance and commercialization, while The Takeda Pharmaceutical Company will continue to provide distribution support under the current national vaccination campaign for Moderna, Inc.’s COVID-19 vaccines for a transitional period.
Earlier this May, Piper Sandler analyst Edward Tenthoff lowered his price target on Moderna, Inc. to $214 from $348 based on “pipeline adjustments reflecting current market conditions” but maintained an Overweight rating on the shares. The analyst adjusted his model to value Spikevax at $41.3 billion on decreased expected 2022 peak revenues of $20.65 billion.
The number of hedge funds tracked by Insider Monkey owning stakes in Moderna, Inc. stood at 41 in Q1 2022, declining from 43 in the previous quarter. The total value of these holdings is more than $3.80 billion, down from $3.89 billion in Q4 2021. Philippe Laffont’s Coatue Management is the biggest stakeholder of Moderna, Inc. in Q1 2022, with 6.93 million shares worth approximately $1.19 billion.
Carillon Tower Advisers mentioned Moderna, Inc. in its Q3 2021 investor letter. Here is what the fund said:
“Moderna is a biotechnology company pioneering messenger RNA (mRNA) therapeutics and vaccines. The stock proved to be an impressive contributor once again in the quarter, as investors continue to evaluate the potential for future growth driven primarily by the firm’s revolutionary COVID-19 vaccine. Strong global demand for the vaccine may persist for the foreseeable future in order to maintain immunity as well as provide protection against any additional future variants. The potential for the firm’s mRNA technology to be used in a number of other use cases, specifically influenza, could also provide an additional tailwind for future growth.”
2. Bio-Rad Laboratories, Inc. (NYSE:BIO)
Number Of Hedge Fund Holders: 45
Bio-Rad Laboratories, Inc. (NYSE:BIO) is an American developer and manufacturer of specialized technological products for the life science research and clinical diagnostics markets. Shares of the laboratory company have dropped by 34.46%, and as of Q1 2022, GAMCO Investors completely sold its stakes in the company.
On May 2, Citi analyst Patrick Donnelly lowered the price target on Bio-Rad Laboratories, Inc. to $750 from $800 and kept a Buy rating on the shares. Although the analyst dropped the price target to reflect lower peer multiples, he notes that the company posted a revenue beat in Q1 driven by healthy growth in the life sciences segment.
According to Insider Monkey’s database, 45 hedge funds were bullish on Bio-Rad Laboratories, Inc. with stakes worth $1.54 billion at the end of Q1 2022. This is compared to 38 positions in Q4 2021 with stakes worth $1.37 billion. Paul Marshall and Ian Wace’s Marshall Wace LLP was the company’s leading shareholder, with 467,343 shares worth more than $263.2 million.
1. Occidental Petroleum Corporation (NYSE:OXY)
Number Of Hedge Fund Holders: 67
Occidental Petroleum Corporation (NYSE:OXY) is an American company engaged in hydrocarbon exploration in the United States, and the Middle East as well as petrochemical manufacturing in the United States, Canada, and Chile. Shares of the oil and gas company have soared by 106.33% in the past six months.
Although billionaire Mario Gabelli discarded Occidental Petroleum Corporation from his Q1 portfolio, the company has been thriving in the recent market environment. On May 31, Mizuho analyst Vincent Lovaglio raised the price target on Occidental Petroleum Corporation to $89 from $85 and kept a Buy rating on the shares. According to the analyst’s notes, global energy undersupply has continued to drive energy commodity prices higher, while logistics and supply chain constraints, broader macro uncertainty and a shift in corporate behavior have pushed back the growth response.
For the first quarter of 2022, Occidental Petroleum Corporation posted an EPS of $2.12, beating market estimates by $0.09. Revenue for the quarter came in at $8.53 billion, showing a year-on-year growth of 55.7%, and also exceeded analysts’ forecasts by $473.1 million.
Overall, 67 hedge funds were stakeholders in the company at the close of Q1 2022, up from 58 hedge funds in the preceding quarter. Of these, Warren Buffett’s Berkshire Hathaway stands as the firm’s biggest shareholder as of Q1, with more than 136.37 million shares worth approximately $7.73 billion.
Smead Capital Management talked about Occidental Petroleum Corporation in its Q3 2021 investor letter. Here is what the investment management firm said:
“Oil stocks dominated our winners for the quarter. We showed that we have unlimited ability to tempt fate by buying into Occidental Petroleum (OXY) this year after it was our biggest loser of 2020. It gained 16.64% during the third quarter.”
You can also take a look at 10 Stocks Warren Buffett is Selling and 10 Best Stocks to Buy According to Billionaire Mario Gabelli.
Follow Insider Monkey on Twitter
Suggested articles:
This article is originally published at Insider Monkey.
