5 Biggest Losers in Gabriel Plotkin’s Melvin Capital Portfolio

1. Coty Inc. (NYSE:COTY)

YTD Share Price Decline as of May 25: 41.65%

Number of Hedge Fund Holders: 30

Coty Inc. (NYSE:COTY) is an American company that markets and sells beauty products worldwide under Alexander McQueen, Burberry, Calvin Klein, Cavalli, Chloe, Davidoff, Gucci, Hugo Boss, Kylie Jenner, Lacoste, Marc Jacobs, Miu Miu, Nikos, Kim Kardashian West, and Tiffany & Co. brands. 

Securities filings for Q1 2022 disclose that Gabriel Plotkin’s Melvin Capital slashed its Coty Inc. (NYSE:COTY) stake by 30%, holding 29.40 million shares of the company worth $264.3 million. Coty Inc. (NYSE:COTY) shares have declined about 42% year-to-date as of May 25, making it one of the top losers in the Melvin Capital portfolio. 

On May 11, Barclays analyst Lauren Lieberman lowered the price target on Coty Inc. (NYSE:COTY) to $8 from $10 and reiterated an Equal Weight rating on the shares. The analyst noted that in an increasingly volatile macro environment, Coty Inc. (NYSE:COTY) surpassed Street estimates on the top and bottom line this quarter and reaffirmed its fiscal 2022 guidance, which “speaks to the growing resiliency the company has built since CEO Sue Nabi’s arrival”. 

The Q1 database of Insider Monkey suggests that 30 hedge funds were bullish on Coty Inc. (NYSE:COTY), down from 36 funds in the earlier quarter. Steve Cohen’s Point72 Asset Management held a prominent position in the company, with more than 8 million shares worth $73.1 million. 

Here is what ClearBridge Investments Value Equity Strategy has to say about Coty Inc. (NYSE:COTY) in its Q3 2021 investor letter:

“Coty is a global beauty company primarily made up of its market leading prestige fragrance business and a mass cosmetic business acquired from P&G that includes brands such as Covergirl. It is a turnaround story catalyzed by the new CEO, Sue Nabi, an experienced beauty expert who previously worked at L’Oreal and successfully executed turnarounds and the relaunch of its Lancome and L’Oreal Paris brands. Early signs are supportive of improving performance in Coty’s cosmetics business. The company should also benefit from an accelerating growth trend in its prestige fragrance business driven by purchases shifting online and the category’s emerging popularity.”

You can also take a look at 10 Favorite Stocks of Dan Loeb’s Third Point and 10 Best Stocks to Buy Now According to Billionaire David Harding. 

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