In this article, we will discuss 10 stocks to sell now according to Julian Robertson’s hedge fund. If you want to skip reading about Julian Robertson’s early life, investment history, and his hedge fund’s performance, you can go directly to 5 Stocks to Sell Now According to Julian Robertson’s Hedge Fund.
Julian Robertson has earned the title “Wizard of Wall Street” for his legendary investment strategies that helped him beat the S&P 500 by large margins in the past. The legendary billionaire investor and philanthropist founded his hedge fund, Tiger Management, back in 1980 with an initial capital of $8 million. In 1988, the Wall Street legend grew his initial capital by roughly 3 times and turned it into $22 million. Fast forward to 1996, Tiger Management’s portfolio came to a whopping $7.2 billion in value.
Mr. Robertson’s trading strategies have a remarkable track record in the hedge fund industry, having returned a median of 31.7% annually between 1980 and 1998, his peak years. This is compared to the S&P 500’s median return of 12.7% per year over the same period. The billionaire followed a long-short approach toward stock investing. Mr. Robertson has reportedly said:
“Our mandate is to find the 200 best companies in the world and invest in them, and find the 200 worst companies in the world and go short on them. If the 200 best don’t do better than the 200 worst, you should probably be in another business.”
Julian Robertson closed Tiger Management to outside investors in 2000, but the fund continues to operate today with investments in both public and private equity. As of 2001, Tiger Management’s public equity business invests in growth companies that have remarkable management teams. As of 2003, the fund’s private equity division has invested in hundreds of companies that span over 30 countries around the world.
According to the fund’s Q1 2022 SEC filings, Tiger Management has initiated seven new positions and exited 13 of its Q4 2021 positions. The fund has a top ten holdings concentration of 51.09% and has the majority of its investments in the technology and financials segments. Among the top stocks discarded by billionaire investor Julian Robertson’s Tiger Management, we have Enphase Energy, Inc. (NASDAQ:ENPH), Tesla, Inc. (NASDAQ:TSLA), and Mastercard Incorporated (NYSE:MA).
Our Methodology
To come up with the 10 stocks to sell now according to Julian Robertson’s hedge fund, we reviewed Tiger Management’s 13F portfolio at the end of the first quarter of 2022. We picked stocks that Tiger Management held significant stakes in Q4 2021, and completely exited in Q1 2022. Along with each stock we have also mentioned the hedge fund sentiment and analyst rating for it.
The hedge fund sentiment was derived from Insider Monkey’s database, which as of the first quarter of 2022, tracks 912 elite hedge funds.
Stocks to Sell Now According to Julian Robertson’s Hedge Fund
10. Wix.com Ltd. (NASDAQ:WIX)
Number of Hedge Fund Holders: 24
Wix.com Ltd. (NASDAQ:WIX) operates a cloud-based platform that enables anyone to create a website or web application in North America, Europe, Latin America, Asia, and internationally. The company was founded in 2006 and is headquartered in Tel Aviv, Israel. Tiger Management sold its stakes of $0.78 million in Wix.com Ltd. (NASDAQ:WIX) in Q1 2022.
On May 17, Needham analyst Bernie McTernan lowered his price target on Wix.com Ltd. (NASDAQ:WIX) to $85 from $125 while maintaining a Buy rating on the shares. McTernan cited the company’s weak second-quarter earnings and weak full-year guidance catalyzed by macroeconomic headwinds.
By the end of the first quarter of 2022, 24 hedge funds held stakes in Wix.com Ltd. (NASDAQ:WIX). The value of these stakes was estimated to be $558.89 million, down from $821.01 million in the preceding quarter with 29 positions.
Wix.com Ltd. (NASDAQ:WIX) is one of the top stocks to sell now according to billionaire Julian Robertson’s Tiger Management. Other notable stocks Tiger Management discarded in Q1 2022 include Enphase Energy, Inc. (NASDAQ:ENPH), Tesla, Inc. (NASDAQ:TSLA), and Mastercard Incorporated (NYSE:MA).
Baron Funds, an asset management firm, recently published its “Baron Asset Fund” first-quarter 2022 investor letter in which it mentioned Wix.com Ltd. (NASDAQ:WIX). Here is what the firm said:
“Underperformance of IT investments, lack of exposure to the Energy sector, which was driven sharply higher by spiking oil prices, and greater exposure to lagging life sciences tools & services stocks within Health Care detracted the most from relative results. Weakness in the sector also stemmed from website development platform Wix.com Ltd. (NASDAQ:WIX). Wix’s stock declined after the company experienced a slowdown in new customer additions in the aftermath of pandemic-related trends.”
9. Li Auto Inc. (NASDAQ:LI)
Number of Hedge Fund Holders: 28
Li Auto Inc. (NASDAQ:LI) is a leading Chinese electric vehicle manufacturer. At the end of Q1 2022, Tiger Management discarded its 34,900 shares of Li Auto Inc. (NASDAQ:LI), or stakes of $1.12 million, and exited the stock completely.
Shortly after the company released its earnings, BofA analyst Ming Hsun Lee lowered his price target on Li Auto Inc. (NASDAQ:LI) to $33 from $35 but reiterated a Buy rating on the shares. The analyst is impressed with the company’s new model pipelines but is wary of the prevailing uncertainty in areas of supply chain and consumption power.
By the end of the first quarter of 2022, 28 hedge funds held stakes in Li Auto Inc. (NASDAQ:LI) that were valued at $1.25 billion. This is compared to 24 hedge funds in the prior quarter with stakes worth $1.10 billion. The hedge fund sentiment for the stock is positive.
8. Momentive Global Inc. (NASDAQ:MNTV)
Number of Hedge Fund Holders: 38
Momentive Global Inc. (NASDAQ:MNTV) provides Software-as-a-Service solutions that help businesses turn stakeholder feedback into action in the United States and internationally. At the close of Q1 2022, 38 hedge funds were long Momentive Global Inc. (NASDAQ:MNTV) with stakes worth $545.97 million. Tiger Management was not one of these, as the fund discarded its 0.23 million shares in the company at the end of this March and completely let go of the stock.
On May 4, Momentive Global Inc. (NASDAQ:MNTV) released its earnings report for the fiscal first quarter of 2022. The company generated quarterly revenues of $116.99 million, up 14.36% year over year, beating revenue estimates by $0.89 million.
Shortly after the company’s earnings release, Craig-Hallum analyst Chad Bennett upgraded Momentive Global Inc. (NASDAQ:MNTV) to Buy from Hold with an $18.50 price target.
Here is what ClearBridge Investments had to say about Momentive Global Inc. (NASDAQ:MNTV) in its “Mid Cap Strategy” third-quarter 2021 investor letter:
“During the quarter we also initiated a position in Momentive Global in the IT sector. Known for its online survey brand Survey Monkey, Momentive is capitalizing on the growing importance of customer feedback, market research and employee engagement. Momentive’s competitive positioning through low-cost pricing has helped it achieve strong brand recognition, with its business enterprise division generating high growth rates and attractive incremental margins.”
7. Toast, Inc. (NYSE:TOST)
Number of Hedge Fund Holders: 39
Toast, Inc. operates a cloud-based and digital technology platform for the restaurant industry in the United States and Ireland.
On May 13, Canaccord analyst David Hynes trimmed his price target on Toast, Inc. (NYSE:TOST) to $25 from $34 but maintained a Buy rating on the shares. Hynes noted that the demand for the company’s products appears to be solid and further mentioned the management’s comments about concentrating investments in areas with a proven return profile.
At the close of Q4 2021, Tiger Management had stakes of $0.86 million in Toast, Inc. (NYSE:TOST). The investment accounted for 0.17% of its 13F portfolio. In Q1 2022, Tiger Management sold its stake in Toast, Inc. (NYSE:TOST) and completely exited the stock.
By the end of Q1 2022, 39 hedge funds held stakes in Toast, Inc. (NYSE:TOST). The total value of these stakes came in at $1.47 billion, down from $1.80 billion in the previous quarter with 34 positions.
Baron Funds named several companies in its “Baron Opportunity Fund” third-quarter 2021 investor letter, one of which was Toast, Inc. (NYSE:TOST). Here is what experts at Baron Funds think about the stock:
“Toast, Inc. is a cloud-based end-to-end technology platform purpose-built for the restaurant industry. Its platform provides a comprehensive suite of cloud software products and financial technology solutions to its customers to connect front-of-house with back-of-house operations across all customer channels. Toast’s core module is its point-of-sale software solution and requires all customers to use Toast as their payment processor. Customers then have the option to bundle or add-on additional modules across operations, digital ordering and delivery, marketing and loyalty, team management, and back office. Toast today powers 48,000 restaurants within the 860,000 U.S. restaurant industry, largely focusing on small- and medium-sized (“SMB”) restaurant customers (generally fewer than 10 locations but up to 50), with some larger enterprise customers as well. Toast is the clear market leader in SMB restaurant technology with the best product offering and only full, end-to-end platform. We believe that as restaurants continue to invest in technology at an accelerated pace emerging from COVID, Toast will be a big beneficiary given its leading market position and best-in-class product. At less than 6% penetration of U.S. restaurants and 3% penetration of its $15 billion recurring-revenue TAM, Toast has a long runway for growth by signing on additional locations to the platform and increasing the attach rate of its value-add modules. Only 54% of customers today use 4 or more of Toast’s 10-plus modules, each of which provide significant value to the customer and would drive Toast’s recurring revenue stream higher.”
6. Five9, Inc. (NASDAQ:FIVN)
Number of Hedge Fund Holders: 52
Five9, Inc. (NASDAQ:FIVN) is a California-based provider of cloud software for contact centers in the United States and internationally. Tiger Management sold its $1.67 million stakes in the company in Q1 2022 and completely exited the stock. The investment represented 0.32% of its Q4 2021 investment portfolio.
This May, Jefferies analyst Samad Samana slashed his price target on Five9, Inc. (NASDAQ:FIVN) to $125 from $130 while maintaining a Buy rating on the shares.
By the close of Q1 2022, 52 hedge funds were long Five9, Inc. (NASDAQ:FIVN). The total stakes of these funds were valued at $2.11 billion. This is compared to 56 positions in the previous quarter with stakes worth $2.56 billion.
In addition to Enphase Energy, Inc. (NASDAQ:ENPH), Tesla, Inc. (NASDAQ:TSLA), and Mastercard Incorporated (NYSE:MA), Five9, Inc. (NASDAQ:FIVN) is a stock to sell now according to billionaire Julian Robertson’s Tiger Management.
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Disclose. None. 10 Stocks to Sell Now According to Julian Robertson’s Hedge Fund is originally published on Insider Monkey.
