In this article, we discuss the 5 stocks that top hedge funds are selling. If you want to read our detailed analysis of these stocks, go directly to Top Hedge Funds are Selling These 10 Stocks.
5. SentinelOne, Inc. (NYSE:S)
Number of Hedge Fund Holders in Q3: 35
Number of Hedge Fund Holders in Q2: 67
SentinelOne, Inc. (NYSE:S) provides cybersecurity solutions. The company failed to meet market expectations on earnings for the third quarter despite a healthy outlook for cybersecurity firms and the share price has fallen since then.
Jefferies analyst Brent Thill has a Hold rating on SentinelOne, Inc. (NYSE:S) stock with a price target of $70. The analyst, in an investor note, said that the firm had shown success with a land/expand strategy since the IPO.
At the end of the third quarter of 2021, 35 hedge funds in the database of Insider Monkey held stakes worth $2.2 billion in SentinelOne, Inc. (NYSE:S), down from 67 in the preceding quarter worth $2 billion.
4. CoStar Group, Inc. (NASDAQ:CSGP)
Number of Hedge Fund Holders in Q3: 29
Number of Hedge Fund Holders in Q2: 49
CoStar Group, Inc. (NASDAQ:CSGP) provides information, analytics and other services. Although the firm beat market estimates on earnings per share and revenue for the third quarter, it lowered guidance for the fiscal year.
Analysts have viewed the drop in share price of CoStar Group, Inc. (NASDAQ:CSGP) after the earnings report as a buying opportunity. Truist analyst Andrew Jeffrey has a Buy rating on the stock with a price target of $110.
At the end of the third quarter of 2021, 29 hedge funds in the database of Insider Monkey held stakes worth $2.5 billion in CoStar Group, Inc. (NASDAQ:CSGP), down from 49 in the preceding quarter worth $2.8 billion.
In its Q3 2021 investor letter, Weitz Investment Management, an asset management firm, highlighted a few stocks and CoStar Group, Inc. (NASDAQ:CSGP) was one of them. Here is what the fund said:
“The Weitz Quality at a Discount (QuaD) investing framework means owning a collection of high-quality businesses, purchased at sensible prices, with a longer time horizon than most investors. Turnover is low almost by definition, yet our team strives to continually improve the portfolio. We increased the Fund’s position in CoStar Group when the stock traded into the low $80s, which was below our estimate of intrinsic value.”
3. Caterpillar Inc. (NYSE:CAT)
Number of Hedge Fund Holders in Q3: 46
Number of Hedge Fund Holders in Q2: 62
Caterpillar Inc. (NYSE:CAT) makes and sells construction and mining equipment. The stock has had a year of impressive highs but equally damning lows so far. The firm missed market estimates on revenue for the third quarter but future outlook remains strong as a massive infrastructure bill is passed by lawmakers.
On November 8, investment advisory Baird maintained an Outperform rating on Caterpillar Inc. (NYSE:CAT) stock with a price target of $290, placing the company on a list of bullish Fresh Picks kept by the advisory.
Among the hedge funds being tracked by Insider Monkey, Washington-based firm Bill & Melinda Gates Foundation Trust is a leading shareholder in Caterpillar Inc. (NYSE:CAT) with 9.6 million shares worth more than $1.8 billion.
In its Q2 2021 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and Caterpillar Inc. (NYSE:CAT) was one of them. Here is what the fund said:
“Having followed the company closely for north of a decade, Caterpillar is a name we know well. For much of its history, the operating efficiency of the company left much to be desired, but its underlying competitive position was rarely in doubt. A series of actions over the past decade (e.g., LEAN implementation, improved service mix, optimized manufacturing footprint) helped to narrow the gap between Caterpillar’s potential and its realized results, driving material margin expansion and strong share price performance. In our view, the company remains among the highest quality industrials in the market, but its underlying business is cyclical, which can translate to large swings in both performance and investor sentiment over short time periods. Our ability to focus on the long-term, sustainable earnings power of a business (rather than getting distracted by near-term fluctuations) is our most significant edge when investing in cyclical businesses. Due to the inherent volatility in Caterpillar’s end markets and operating performance, we suspect we’ll have a future opportunity to own this high-quality business at a more attractive price once the cycle turns and today’s enthusiasm wears off.”
2. Western Digital Corporation (NASDAQ:WDC)
Number of Hedge Fund Holders in Q3: 41
Number of Hedge Fund Holders in Q2: 57
Western Digital Corporation (NASDAQ:WDC) makes and sells storage devices. In earnings results for the first fiscal quarter, posted in late October, the company beat market estimates on earnings per share and revenue but lowered guidance numbers for the second quarter.
Mizuho analyst Vijay Rakesh recently upgraded Western Digital Corporation (NASDAQ:WDC) stock to Buy from Neutral with a price target of $75, noting that the demand for products of the company was improving across the PC industry.
At the end of the third quarter of 2021, 41 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in Western Digital Corporation (NASDAQ:WDC), down from 57 in the preceding quarter worth $2.1 billion.
ClearBridge Investments, in its Q1 2021 investor letter, mentioned Western Digital Corporation (NASDAQ:WDC). Here is what the fund has to say in its letter:
“Our high active share approach made the most difference in IT, where the portfolio’s holdings gained 4.5% compared to a loss for the benchmark. Results were led by our more cyclical positions in digital storage provider Western Digital.”
1. Guardant Health, Inc. (NASDAQ:GH)
Number of Hedge Fund Holders in Q3: 31
Number of Hedge Fund Holders in Q2: 49
Guardant Health, Inc. (NASDAQ:GH) is a precision oncology firm based in California. The stock had slumped after reports indicated that the company was considering the purchase of NeoGenomics, a cancer lab operator, earlier this year.
However, Guardant Health, Inc. (NASDAQ:GH) decided against the purchase in October. The company missed market estimates on earnings per share for the third quarter by $0.12 but beat on revenue by $2 million.
Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Viking Global is a leading shareholder in Guardant Health, Inc. (NASDAQ:GH) with 4.8 million shares worth more than $611 million.
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