In this article, we discuss 5 stocks to sell according to Jinghua Yan’s TwinBeech Capital. If you want to read our detailed analysis of Yan’s history, investment philosophy, and hedge fund performance, go directly to 10 Stocks to Sell According to Jinghua Yan’s TwinBeech Capital.
5. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 76
Percentage Decrease in Stake in Q1: 100%
TwinBeech Capital sold its entire stake in pharmaceutical company AbbVie Inc. (NYSE:ABBV) in the first quarter of 2022. On May 16, AbbVie Inc. (NYSE:ABBV) and Cugene, a clinical-stage biotechnology company, established a partnership to explore next-generation precision immunology and oncology medicines to treat autoimmune disease and cancer. Under the agreement terms, Cugene will get a $48.5 million early payment.
On May 23, SVB Leerink analyst David Risinger maintained an Underperform rating on AbbVie Inc. (NYSE:ABBV) with a price objective of $140. AbbVie Inc. (NYSE:ABBV), on April 29, posted earnings for the first quarter of 2022. The reported earnings per share came in at $3.16, beating estimates by $0.02.
According to Insider Monkey’s database, 76 hedge funds had a stake in AbbVie Inc. (NYSE:ABBV) as of Q1 2022. The total value of their holdings was $3.67 billion. Arrowstreet Capital is one of the leading shareholders of AbbVie Inc. (NYSE:ABBV), with a position worth over $754.16 million.
Here is what Miller Howard Investments had to say about AbbVie Inc. (NYSE:ABBV) in its Q3 2021 investor letter:
“While optimistic about a recovery, we continue to balance our cyclical holdings with dividend-payers in stable, less economically-sensitive industries. We hold three pharmaceutical companies, (which includes) AbbVie (ABBV). All three have strong cash flows and balance sheets, making their high dividends reasonably safe. The investment controversy surrounding these pharma companies is whether they can develop or acquire new products to replace their current blockbuster drugs. The low valuations on these stocks reflects what we believe to be undue pessimism by investors on the prospects for new drugs.”
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 160
Percentage Decrease in Stake in Q1: 100%
In the United States, Europe, the Middle East, Africa, Asia-Pacific, Canada, and Latin America, Alphabet Inc. (NASDAQ:GOOG) offers a variety of technology products and platforms. It works via three segments – Google Services, Google Cloud, and Other Bets. On May 19, Advanced Micro Devices, Inc. (NASDAQ:AMD) announced a partnership with Alphabet Inc. (NASDAQ:GOOG) Cloud to help with chip-design workloads and improve AMD’s data centres.
After the business announced a relatively mixed first quarter, Wells Fargo analyst Brian Fitzgerald trimmed his price target on Alphabet Inc. (NASDAQ:GOOG) to $3,400 from $3,600 to reflect deteriorating industry values while maintaining an Overweight rating on the stock.
As of the end of the first quarter of 2022, 160 hedge funds in Insider Monkey’s database held stakes in Alphabet Inc. (NASDAQ:GOOG), an increase compared to 158 funds in the preceding quarter. Alphabet Inc. (NASDAQ:GOOG) is one of the stocks that Jinghua Yan’s TwinBeech Capital sold off entirely during the first quarter of 2022. The firm had featured on the fund’s portfolio since the fourth quarter of 2019.
Farrer Wealth Advisors mentioned Alphabet Inc. (NASDAQ:GOOG) in its Q1 2022 investor letter. Here is what the fund said:
“Alphabet: We won’t waste much time trying to explain to our clients why Alphabet is such a phenomenal business, we believe that is quite self-evident. The better explanation is why we never bought Alphabet before. The reason was a personal bias we held based on three beliefs (which we now believe to be incorrect)
Growth in YouTube would stall as the increased ad-load would turn-off viewers (the double ad-load at the beginning of videos for example). Consumers will focus on discovery rather than search to purchase new items. For example – using Instagram/TikTok to decide what new clothes to buy instead of ‘googling’ for clothes. Other Bets: In general, we felt that capital spent on “Other Bets” has been a bit wasteful with the segment earning just around $3.1bn in revenue versus nearly $21bn in operating losses over the last five years…” (Click here to see the full text)
3. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 81
Percentage Decrease in Stake in Q1: 100%
Snowflake Inc. (NYSE:SNOW) provides cloud data warehousing software. On May 24, Rosenblatt analyst Blair Abernethy boosted Snowflake Inc. (NYSE:SNOW) to Buy from Neutral with a price objective of $255, down from $325. Due to the recent significant drop in the stock price, Abernethy advised investors in a research note that the new target price represented an 84% return from current levels.
Snowflake Inc. (NYSE:SNOW) saw a decrease in hedge fund sentiment recently. The number of long hedge fund positions declined to 81 at the end of the first quarter of 2022, compared to 84 positions in the previous quarter.
At the conclusion of the first quarter of 2022, Altimeter Capital Management, Snowflake Inc. (NYSE:SNOW)’s most prominent stakeholder, reported holdings worth $3.90 billion. Tiger Global Management followed it with a $1.57 billion stake.
Jinghua Yan’s hedge fund initially invested in Snowflake Inc. (NYSE:SNOW) in Q4 2021. During this period, the hedge fund purchased 37,391 shares of the company, worth $12.67 million. However, in the first quarter of 2022, TwinBeech Capital disposed of its stake in Snowflake Inc. (NYSE:SNOW) entirely.
Here is what Baron Funds has to say about Snowflake Inc. (NYSE:SNOW) in its Q1 2022 investor letter:
“Snowflake grew revenues…106% (to $1.2 billion — while new bookings in the fourth quarter alone were $1.2 billion in contract value) with 12% margins. The stock was down 32% in the first quarter. We believe that these companies, along with many others that we own, are the long-term beneficiaries of digital transformation, a multi-decade paradigm shift sweeping global economies today. Frank Slootman, Snowflake’s CEO, explained it this way in his most recent earnings call with investors:
“Snowflake’s growth is driven by digital transformation and long-term secular trends in data science and analytics, enabled by cloud-scale computing and Snowflake’s cloud-native architecture. Snowflake is a single data operations platform that addresses a broad spectrum of workload types and incredible performance economy and governance. As a platform, Snowflake enables the data cloud, a world without silos and the promise of unfettered data science.…” (Click here to see the full text).
2. Yum China Holdings, Inc. (NYSE:YUMC)
Number of Hedge Fund Holders: 27
Percentage Decrease in Stake in Q1: 100%
Yum China Holdings, Inc. (NYSE:YUMC) operates and manages restaurants and fast food businesses in China. Yum China Holdings, Inc. (NYSE:YUMC) was in 27 hedge fund portfolios at the end of the first quarter of 2022. There were 26 hedge funds in our database with Yum China Holdings, Inc. (NYSE:YUMC) holdings at the end of the previous quarter.
In the last quarter of 2021, Jinghua Yan’s TwinBeech Capital owned 214,330 shares of Yum China Holdings, Inc. (NYSE:YUMC), which the hedge fund sold off entirely in the first quarter of 2022. GuardCap Asset Management is a significant shareholder of Yum China Holdings, Inc. (NYSE:YUMC), with 8.94 million shares worth about $371.30 million.
On May 3, Yum China Holdings, Inc. (NYSE:YUMC) published earnings for the first quarter of 2022, announcing earnings per share of $0.24, below estimates by $0.09. However, the $2.67 billion revenue for the period was up 4.3% year-over-year, beating estimates by $70 million.
1. Zynga Inc. (NASDAQ:ZNGA)
Number of Hedge Fund Holders: 63
Percentage Decrease in Stake in Q1: 100%
TwinBeech Capital sold its entire stake in the social game developer company Zynga Inc. (NASDAQ:ZNGA) in the first quarter of 2022. Zynga Inc. (NASDAQ:ZNGA) creates, promotes, and manages social games as live services for mobile platforms like Apple’s iOS and Google’s Android operating systems, as well as social networking sites like Facebook.
UBS analyst John Hodulik downgraded Zynga Inc. (NASDAQ:ZNGA) from Buy to Neutral on March 15, with a price target of $10, down from $13.50. The downgrade was caused by the end of the go-shop period, with the buyout scheduled to be completed in Q2.
At the end of the first quarter of 2022, 63 hedge funds in the database of Insider Monkey held stakes worth $1.99 billion in Zynga Inc. (NASDAQ:ZNGA), up from 47 the preceding quarter worth $540.49 million. Diamond Hill Capital is Zynga Inc. (NASDAQ:ZNGA)’s most significant shareholder, with shares worth $289.48 million.
Here is what ClearBridge Investments, an investment management firm, has to say about Zynga Inc. (NASDAQ:ZNGA) in its Q3 2021 investor letter:
“A handful of our rapid growers hit tough earnings comparisons over the summer after experiencing a surge in demand in the second quarter of 2020 as companies moved to remote work and consumers were confined to their homes. Zynga, which develops games played on social and mobile platforms, experienced a significant uptick in new customers last year but has not seen as much retention and gaming usage as the economy has reopened.”
You can also take a peek at 10 Best Stocks to Buy Now According to Tom Gayner’s Markel Gayner Asset Management and 10 Tech Stocks to Buy Now According to Barry Dargan’s Intermede Investment Partners.
