In this article, we discuss 5 stocks to sell now according to Michael Zimmerman’s Prentice Capital Management. If you want to read our detailed analysis of Zimmerman’s history and hedge fund performance, go directly to 10 Stocks to Sell Now According to Michael Zimmerman’s Prentice Capital Management.
5. MGM Resorts International (NYSE:MGM)
Number of Hedge Fund Holders: 55
Percentage Decrease in Stake in Q4: 100%
MGM Resorts International (NYSE:MGM) owns and manages several casino resorts in the United States and China that offer gaming, hotel rooms, food, entertainment, shopping, and other services. MGM Resorts International (NYSE:MGM) has been in Prentice Capital Management’s portfolio since the first quarter of 2020. The fund sold its stake completely in the fourth quarter of 2021.
According to Insider Monkey’s database of elite funds, 55 hedge funds were long MGM Resorts International (NYSE:MGM) in the fourth quarter of 2021, up from 50 funds in the preceding quarter. Corvex Capital is a significant stakeholder of MGM Resorts International (NYSE:MGM), with 15.67 million shares worth $703.44 million.
As part of a comprehensive research note reviewing Q1 earnings in Gaming, Truist analyst Barry Jonas dropped his price objective on MGM Resorts International (NYSE:MGM) to $48 from $51 and reiterated a Hold rating on the stock.
In its fourth quarter 2021 investor letter, Longleaf Partners Fund mentioned MGM Resorts International (NYSE:MGM). Here is what the fund said:
“MGM Resorts (43%, 2.54%; 4%, 0.29%), the casino and online gaming company, was another strong performer. The company’s third quarter Las Vegas revenues grew massively over 2020, approaching within 8% of 2019 levels despite some lingering COVID restrictions. MGM has gained nearly 10 percentage points of Vegas Strip market share since 2019, an extraordinary achievement for CEO Bill Hornbuckle, who has also done a terrific job controlling corporate costs. Though its current Las Vegas margins are unsustainably high at 39%, MGM’s Vegas EBITDA should grow steadily from this year’s $1.6 billion as national reopening boosts travel in the next year(s). MGM’s regional casinos are now exceeding their 2019 EBITDA levels as well, while MGM’s digital iGaming revenues grew 17% sequentially for an excellent 32% market share. MGM repurchased shares at a 13% annualized pace during the last quarter at a $40 average price, while our growing value is now approaching $60. MGM acquired the Cosmopolitan, a “tuck-in” casino with achievable synergies, at a reasonable price and recently announced the sale of the Mirage for a headline price over $1billion, well above our appraisal for the asset. We are delighted with the progress of this management team and business over the last two years.”
4. Skillsoft Corp. (NYSE:SKIL)
Number of Hedge Fund Holders: 21
Percentage Decrease in Stake in Q4: 100%
Skillsoft Corp. (NYSE:SKIL) is a company that specializes in enterprise learning solutions. It is divided into three sections – Content, Global Knowledge, and SumTotal. Prentice Capital Management first purchased a stake in Skillsoft Corp. (NYSE:SKIL) during the third quarter of 2021, buying close to 111,178 shares. In the next quarter, this position was totally sold off.
Piper Sandler analyst Arvind Ramnani reduced his price objective on Skillsoft Corp. (NYSE:SKIL) to $10 from $12 on January 13 and maintained a Neutral rating on the stock. Following repeated resets and estimate revisions, the analyst lowered price targets on 20 vertical software and fintech equities.
In the fourth quarter of 2021, hedge fund sentiment decreased for Skillsoft Corp. (NYSE:SKIL). According to data compiled by Insider Monkey, 21 hedge funds owned shares in Skillsoft Corp. (NYSE:SKIL) at the end of the fourth quarter, down from 23 funds a quarter earlier.
3. SmileDirectClub, Inc. (NASDAQ:SDC)
Number of Hedge Fund Holders: 16
Percentage Decrease in Stake in Q4: 100%
SmileDirectClub, Inc. (NASDAQ:SDC) is a dental service provider. SmileDirectClub, Inc. (NASDAQ:SDC) manages end-to-end processes through its teledentistry platform, SmileCheck, which includes marketing, aligner manufacturing, treatment by a doctor, fulfilment, and inspecting through the completion of treatment with over 250 licenced orthodontists and general physicians.
According to Insider Monkey’s fourth quarter database, 16 hedge funds were bullish on SmileDirectClub, Inc. (NASDAQ:SDC), with stakes valued at $9.08 million, down from 18 funds in the earlier quarter, with stakes worth $58.71 million.
An Equal Weight rating was assigned to SmileDirectClub, Inc. (NASDAQ:SDC) with a $2.30 price objective by Morgan Stanley analyst Erin Wright on January 31. She began her coverage of seven dental companies with a good outlook toward the business.
In the third quarter of 2021, Prentice Capital Management held 1.53 million shares of SmileDirectClub, Inc. (NASDAQ:SDC), valued at $8.11 million, which the hedge fund sold in the fourth quarter of 2021.
2. Spring Valley Acquisition Corp. (NASDAQ:SV)
Number of Hedge Fund Holders: 18
Percentage Decrease in Stake in Q4: 100%
Spring Valley Acquisition Corp. (NASDAQ:SV) is a blank check corporation that was founded to achieve a merger, asset acquisition, stock purchase, reorganization, stock exchange, or other similar business combinations with one or more entities. Its goal is to buy a privately owned company that can turn into a publicly-traded bellwether due to its financial acumen, operational ability, and industry network.
According to regulatory filings, Prentice Capital Management had 54,909 shares of Spring Valley Acquisition Corp. (NASDAQ:SV) at the end of the third quarter of 2021, valued at $477,000, which it sold off entirely in the fourth quarter of 2021.
Nucor Corporation (NYSE:NUE) made a $15 million investment in NuScale Power, a developer of small modular reactor nuclear reactors, on April 6. Nucor has agreed to support NuScale through a private placement in Spring Valley Acquisition Corp. (NASDAQ:SV), which plans to merge with NuScale.
Among the hedge funds tracked by Insider Monkey, 18 funds were bullish on Spring Valley Acquisition Corp. (NASDAQ:SV) at the end of the fourth quarter of 2021, with stakes amounting to $88.48 million. D E Shaw is the biggest stakeholder in Spring Valley Acquisition Corp. (NASDAQ:SV), with 2.24 million shares worth $22.45 million.
1. World Wrestling Entertainment, Inc. (NYSE:WWE)
Number of Hedge Fund Holders: 25
Percentage Decrease in Stake in Q4: 100%
World Wrestling Entertainment, Inc. (NYSE:WWE), a diversified media and entertainment company, competes in the sports entertainment industry in North America, the Middle East, Africa, Europe, Asia Pacific, and Latin America. Michael Zimmerman added World Wrestling Entertainment, Inc. (NYSE:WWE) to his portfolio in the third quarter by buying 98,976 shares. However, the hedge fund sold all the shares of World Wrestling Entertainment, Inc. (NYSE:WWE) in the fourth quarter of 2021.
In the fourth quarter of 2021, 25 of the 924 hedge funds owned interests in World Wrestling Entertainment, Inc. (NYSE:WWE) worth $199.23 million, compared to the same number of funds owning stakes in World Wrestling Entertainment, Inc. (NYSE:WWE) totaling $223.95 million in the previous quarter.
JPMorgan analyst David Karnovsky boosted his price objective on World Wrestling Entertainment, Inc. (NYSE:WWE) to $64 from $58 on April 21 and maintained a Neutral rating on the stock ahead of the Q1 2022 earnings. After executing several action items since World Wrestling Entertainment, Inc. (NYSE:WWE) released Q4 earnings, the analyst upgraded his EBITDA expectations for 2022.
ClearBridge Investments, in its first quarter 2021 investor letter, mentioned World Wrestling Entertainment, Inc. (NYSE:WWE). Here is what the fund said:
“We also sold World Wrestling Entertainment as we believe the shares reflected full value after finally signing a U.S. content distribution agreement.”
You can also take a peek at 8 Stocks to Sell Now According to Mitch Cantor’s Mountain Lake Investment Management and 10 Tech Stocks to Buy Now According to Robert Pitts’ Steadfast Capital.
