In this article, we discuss 5 stocks US Congressmen are selling. If you want to see some more stocks in this selection, click 10 Stocks US Congressmen Are Selling.
5. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 80
Merck & Co., Inc. (NYSE:MRK) is an American healthcare company that provides pharmaceutical drugs and animal health products. Robert Wittman, the U.S. representative for Virginia’s 1st congressional district, sold shares of Merck & Co., Inc. (NYSE:MRK) valued at between $1,001 and $15,000. The transaction was disclosed on March 3.
JPMorgan analyst Chris Schott lowered the price target on Merck & Co., Inc. (NYSE:MRK) to $95 from $100 and kept an Overweight rating on the shares on January 28, ahead of the company’s Q4 results. He does not expect any big surprises with the 2022 guidance based on the positive momentum he is seeing in Merck & Co., Inc. (NYSE:MRK)’s primary business.
According to the fourth quarter database of Insider Monkey, 80 hedge funds were long Merck & Co., Inc. (NYSE:MRK), up from 77 funds in the preceding quarter. Fisher Asset Management is the leading shareholder of the company, with 11.40 million shares worth $874.4 million.
Here is what Miller Howard Investments had to say about Merck & Co., Inc. (NYSE:MRK) 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) Merck (MRK). 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. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 83
Pfizer Inc. (NYSE:PFE) is an American biopharmaceutical company that develops injectable and anti-infective medicines, biosimilars, and vaccines for multiple medical ailments.
John Rutherford is a Republican politician who was elected from Florida’s 4th congressional district to be a member of the United States House of Representatives. Rutherford’s trade disclosures on February 17 revealed that he sold shares of Pfizer Inc. (NYSE:PFE) ranging between $1,001 and $15,000.
Pfizer Inc. (NYSE:PFE) reported its fourth quarter results on February 9, posting a GAAP EPS of $0.59, missing estimates by $0.15. Although the Q4 revenue jumped 104% year-over-year to $23.84 billion, it missed market consensus by $362.61 million.
On February 10, Mizuho analyst Vamil Divan lowered the price target on Pfizer Inc. (NYSE:PFE) to $55 from $56 and maintained a Neutral rating on the shares. While the initial fiscal 2022 guidance may have disappointed some investors, there is “room for significant upside” to Pfizer Inc. (NYSE:PFE)’s pipeline, including Comirnaty and Paxlovid, the analyst told investors in a research note. The analyst is looking for Pfizer Inc. (NYSE:PFE) to report further progress with its long-term outlook before he revises his rating for the stock.
Hedge fund sentiment around Pfizer Inc. (NYSE:PFE) is extremely bullish. In Q4 2021, 83 funds reported owning stakes in Pfizer Inc. (NYSE:PFE), compared to 74 funds in the earlier quarter. Coatue Management is a leading shareholder of the company, with a position worth roughly $609 million.
Here is what Saturna Capital Amana Funds has to say about Pfizer Inc. (NYSE:PFE) in its Q3 2021 investor letter:
“The Fund’s strongest performer during the quarter was pharmaceutical manufacturer Pfizer. The company submitted trial data to the FDA for use of its COVID-19 vaccine for younger children, and it is widely expected that the FDA will approve it. Health authorities also began recommending booster shots of the Pfizer vaccine for select populations, further increasing demand for vaccinations.”
3. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 96
Alibaba Group Holding Limited (NYSE:BABA) is a Chinese company that offers technology infrastructure and e-commerce solutions to customers around the globe. James Langevin, the U.S. representative for Rhode Island’s 2nd congressional district, sold Alibaba Group Holding Limited (NYSE:BABA) shares on February 11, worth between $50,001 and $100,000. The transaction was disclosed on March 4.
On February 24, Alibaba Group Holding Limited (NYSE:BABA) reported its Q4 results, posting GAAP earnings per share of $1.19, missing consensus estimates by $0.48. The $38.33 billion revenue also fell short of analysts’ predictions by $520.17 million.
JPMorgan analyst Alex Yao double downgraded Alibaba Group Holding Limited (NYSE:BABA) on March 14 to Underweight from Overweight with a price target of $65, down from $180. The analyst noted that the rising geopolitical and macro risks are leading several global investors to reduce exposure to the Chinese internet sector.
Hedge fund sentiment around Alibaba Group Holding Limited (NYSE:BABA) turned negative in the fourth quarter of 2021, when 96 hedge funds were found to be bullish on the stock, compared to 115 funds in the earlier quarter. Fisher Asset Management owned the largest Alibaba Group Holding Limited (NYSE:BABA) stake, with more than 14 million shares worth $1.6 billion.
Here is what Longleaf Partners International Fund has to say about Alibaba Group Holding Limited (NYSE:BABA) in its Q4 2021 investor letter:
“Alibaba (-50%, -2.26%; -22%, -0.82%), the largest online retail platform in China, was another top detractor for the year and in the fourth quarter. Alibaba reported weak quarterly results and downgraded its sales outlook for the current fiscal year to 20- 23% growth, down from original guidance of 29-32% growth. Macro headwinds, weak consumer sentiment, regulatory scrutiny and competitive forces are having a larger than expected impact on overall retail sales and Alibaba’s market share. Notably, overall retail sales in China slowed down to a meager 5% growth in the September quarter. Slowing consumption, combined with stiff competition from new entrants in livestreaming ecommerce, have resulted in transitory deceleration in Alibaba’s core ecommerce growth trajectory. Additionally, the company is accelerating strategic investments in new initiatives, including Community Group Buying (Taocaicai), Taobao Deals, Local Consumer Services and International E-commerce. These are future growth drivers but are depressing the company’s earnings today. In December, we exited our full position in Alibaba. This was more of a tactical move than a change in investment conviction. We initiated the position early in 2021, and the continued challenges in the second half of the year resulted in a loss that was material enough to be helpful from a tax distribution management point of view. We are sensitive to taxable gains and try to minimize where sensible, so we took advantage of the opportunity to reduce that liability and plan on revisiting the Alibaba opportunity in 2022. We continue to own Alibaba in our Asia Pacific strategy.”
2. Meta Platforms, Inc. (NASDAQ:FB)
Number of Hedge Fund Holders: 224
Ro Khanna is an American Democrat who serves as the U.S. representative from California’s 17th congressional district. Securities disclosures dated March 3 revealed that Khanna sold shares of Meta Platforms, Inc. (NASDAQ:FB) worth between $15,001 and $50,000. The transaction took place on February 18.
Meta Platforms, Inc. (NASDAQ:FB)’s Q4 results were published on February 2, and the company reported earnings per share of $3.67, missing estimates by $0.15. The $33.67 billion revenue outperformed market consensus by $230.60 million.
On March 10, Deutsche Bank analyst Benjamin Black initiated coverage of Meta Platforms, Inc. (NASDAQ:FB) with a Buy rating and a $265 price target. The analyst contended that problems related to ESG and the fallout of IDFA are manageable, and that such concerns are factored in at current share levels. This makes the risk/reward profile for the company largely favorable.
According to Insider Monkey’s Q4 data, 224 hedge funds held long positions in Meta Platforms, Inc. (NASDAQ:FB), down from 248 funds in the prior quarter. Eagle Capital Management held a notable stake in the company, with almost 7 million shares worth $2.3 billion.
Here is what Davis New York Venture Fund has to say about Meta Platforms, Inc. (NASDAQ:FB) in its Q4 2021 investor letter:
“Within the traditional growth category, growing euphoria has led to bubble prices for many companies, most especially those with new and unproven business models such as those discussed above. In contrast, our research focuses on a select handful of proven growth stalwarts whose shares still trade at reasonable valuations. For example, because of concerns about future litigation and regulation, several dominant internet businesses, including Meta (formerly Facebook), trade at steep discounts to many unproven and unprofitable growth darlings that, in our view, trade at euphoric prices. While we expect a continued barrage of negative headlines around the company, as well as increased regulation in the years ahead, we do not expect a significant decline in its long-term profitability.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 262
Microsoft Corporation (NASDAQ:MSFT) is an American multinational technology corporation. Josh Gottheimer, the U.S. representative for New Jersey’s 5th congressional district, reported selling shares of Microsoft Corporation (NASDAQ:MSFT) on March 7 worth somewhere between $500,001 and $1,000,000. The trade took place on February 10.
Jefferies analyst Brent Thill on March 16 noted the strength of Microsoft Corporation (NASDAQ:MSFT)’s emerging Power Platform, which addresses the low-code market. He believes the long-term user opportunity is 1 billion-plus, as compared to under 20 million users today. He reiterated a Buy rating and a $400 price target on Microsoft Corporation (NASDAQ:MSFT) shares.
Among the hedge funds tracked by Insider Monkey, 262 funds were bullish on Microsoft Corporation (NASDAQ:MSFT), compared to 250 funds in the prior quarter. Arrowstreet Capital is the biggest shareholder of the company, with more than 17 million shares worth $5.7 billion.
Here is what Baron Opportunity Fund has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2021 investor letter:
“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter, following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft’s results continued to be strong across the board, with total revenue growing 20% in constant currency, beating Street estimates by 3%; an acceleration in Commercial Cloud revenue to 34% constant-currency growth; operating margins expanding to just under 45%; earnings growth of 23%; and free cash flow growth of 30%. We believe the company is positioned to deliver 13% to 15% organic growth over the next three years, underpinned by total addressable market expansion and continued market share gains across its disruptive cloud product portfolio.”
You can also take a look at 10 Value Stocks Hedge Funds Like in 2022 and 10 Stocks to Buy Before the Next Recession.
