5 Stocks To Sell According to Motley Fool

In this article, we will be looking at 5 stocks to sell according to Motley Fool. To read our detailed analysis of current market dynamics heading into 2023, you can go directly to see the 12 Stocks To Sell According to Motley Fool.

5. Roku, Inc. (NASDAQ:ROKU)

Number of Hedge Fund Holders: 33

Roku, Inc. (NASDAQ:ROKU) is a communication services company based in San Jose, California. The company operates a TV streaming platform. It operates through its Platform and Player segments.

Matthew Thornton at Truist downgraded shares of Roku, Inc. (NASDAQ:ROKU) from Buy to Hold on January 17.

In December, shares of Roku, Inc. (NASDAQ:ROKU) reached a new one-year low of $40.88. Motley Fool Asset Management completely eliminated its stake in the company during third quarter.

A total of 33 hedge funds were long Roku, Inc. (NASDAQ:ROKU) in the third quarter. The total stake value in the company was $916.9 million.

Saga Partners, an investment management firm, mentioned Roku, Inc. (NASDAQ:ROKU) in its second-quarter 2022 investor letter. Here’s what the firm said:

“The Portfolio first bought Roku in Q3’20. It was a company we followed closely given our investment in The Trade Desk and its importance in connected television (CTV). Roku continued to impressively grow its CTV market share and it took some extra work to understand the underlying dynamics causing Roku’s success. I think there is some misunderstanding surrounding the connected television landscape. Since I haven’t written extensively on the topic in past letters, I thought it would be helpful to provide a little more background on the underlying dynamics of the space below…” (Click here to see the full text)

4. Hasbro, Inc. (NASDAQ:HAS)

Number of Hedge Fund Holders: 33

Hasbro, Inc. (NASDAQ:HAS) is a leisure products company based in Pawtucket, Rhode Island. Its products include toys, games, and apparel.

On January 31, Goldman Sachs analyst Stephen Laszczyk downgraded Hasbro, Inc. (NASDAQ:HAS) shares from Buy to Neutral.

Between October 2022 and January 2023, Hasbro, Inc. (NASDAQ:HAS) shares have fallen by about 11.6%. The company’s revenue and net earnings were down by 5.2% and 4%, respectively, in the first nine months of 2022. Motley Fool Asset Management has also entirely eliminated its stake in the company as of the third quarter.

There were 33 hedge funds long Hasbro, Inc. (NASDAQ:HAS) in the third quarter, with a total stake value of $517 million.

ClearBridge Investments, an investment management company, mentioned Hasbro, Inc. (NASDAQ:HAS) in its third-quarter 2022 investor letter. Here’s what the firm said:

“Rising inflation pressuring consumer budgets for discretionary purchases, as well as volatile currency markets, weighed on global entertainment company Hasbro, Inc. (NASDAQ:HAS), which owns Monopoly, My Little Pony, Nerf, Play-Doh and other games and brands.  The main detractors from absolute returns were positions in Microsoft, Ball, Intel, Hasbro and McCormick (MKC).”

3. Unity Software Inc. (NYSE:U)

Number of Hedge Fund Holders: 34

Unity Software Inc. (NYSE:U) is an information technology company based in San Francisco, California. The company creates and operates an interactive real-time 3D content platform.

Jefferies analyst Andrew Uerkwitz downgraded shares of Unity Software Inc. (NYSE:U) from Hold to Underperform on January 12.

Unity Software Inc. (NYSE:U) is one of the companies that Motley Fool Asset Management completely removed from its portfolio during third quarter.

2. Okta, Inc. (NASDAQ:OKTA)

Number of Hedge Fund Holders: 47

Okta, Inc. (NASDAQ:OKTA) is another information technology company on our list. It provides identity solutions and is based in San Francisco, California.

Motley Fool Asset Management eradicated its stake in Okta, Inc. (NASDAQ:OKTA) during the third quarter.

Our hedge fund data shows 47 funds long Okta, Inc. (NASDAQ:OKTA) in the third quarter, with a total stake value of $763.6 million.

1. Sea Limited (NYSE:SE)

Number of Hedge Fund Holders: 55

Sea Limited (NYSE:SE) is a communication services company based in Singapore. The company is engaged in digital entertainment, e-commerce, and digital financial service businesses.

Sachin Salgaonkar at BofA downgraded shares of Sea Limited (NYSE:SE) from Buy to Neutral on January 9.

Motley Fool Asset Management also eliminated its stake in the company during the third quarter.

A total of 55 funds were long Sea Limited (NYSE:SE) in the third quarter, with a total stake value of $2.4 billion.

Hayden Capital, an investment management firm, mentioned Sea Limited (NYSE:SE) in its third-quarter 2022 investor letter. Here’s what the firm said:

“Sea Limited (NYSE:SE) reported earnings last week, after which the share price rebounded +36% in a single day. The most obvious question that comes to mind, is why didn’t we sell more last year, when prices were still high? The truth is that we did sell a significant amount, but in hindsight obviously wish we were more aggressive with the sales.

For example, we owned the peak number of shares of Sea Ltd in Q1 2020, and steadily trimmed over the next two years. From Q1 2020 to Q1 2022, we trimmed ~39% of our shares over that period. However, the issue was that the investment continued to grow as a percentage of the overall portfolio, since the share price appreciated much faster than our sales (+620% from 1Q20 to 3Q21). This was a similar case for our other long-tenured positions as well.

So why didn’t we trim more aggressively and just hold cash? The answer is that at its core, I believe that holding cash is implicitly a market timing call. I certainly didn’t foresee a likely recession on the horizon so quickly after the turbulence of Covid already had on the economy. Even in late 2021, after it was clear interest rates would start rising, we were still operating under the assumption that rates would cause valuations to compress, but likely wouldn’t have an impact on the overall earnings trajectory. Given our expectations for strong earnings growth, we thought this could more than offset the valuation compression over time, and would still generate strong IRRs over a 3 – 5 year timeframe…” (Click here to see the full text)

See also 10 Best MLP Stocks To Buy Now and 12 Best Forever Stocks To Invest In.