In this article, we discuss 5 stocks you should sell according to Motley Fool. If you want to see some more stocks that were sold by the hedge fund, check out 10 Stocks You Should Sell According to Motley Fool.
5. Discover Financial Services (NYSE:DFS)
Number of Hedge Fund Holders: 33
Percentage Decrease in Stake in Q4: 100%
Discover Financial Services (NYSE:DFS) was incorporated in 1960 and is based in Riverwoods, Illinois. The company provides digital banking products and payment services in the United States. In the December quarter, Motley Fool disposed of its Discover Financial Services (NYSE:DFS) position entirely, which consisted of 7,133 shares worth $876,000.
In 2021, Discover Financial Services (NYSE:DFS)’s full-year revenue came in at $11.8 billion, a year-over-year growth of 99.34% from the 2020 revenue of $5.95 billion. The net income in 2021 stood at $5.4 billion, up from $1.14 billion in the prior year.
Wells Fargo analyst Donald Fandetti on April 6 lowered the firm’s price target on Discover Financial Services (NYSE:DFS) to $127 from $135 and kept an Equal Weight rating on the shares. His core Q1 EPS estimate declined by $0.16 to $3.66, assuming higher operating expenses, a more conservative provision expense, and slightly lower than anticipated card loan growth.
According to Insider Monkey’s records, 33 hedge funds were bullish on Discover Financial Services (NYSE:DFS) at the end of December 2021, compared to 37 funds in the preceding quarter. Hedge funds also slashed their collective stakes in the company from $516 million in Q3 to $488 million in Q4. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is the leading shareholder of Discover Financial Services (NYSE:DFS), with 970,847 shares worth over $112 million.
4. IPG Photonics Corporation (NASDAQ:IPGP)
Number of Hedge Fund Holders: 25
Percentage Decrease in Stake in Q4: 21%
IPG Photonics Corporation (NASDAQ:IPGP) is a Massachusetts-based company that designs and distributes high-performance fiber lasers, fiber amplifiers, and diode lasers used in various materials processing worldwide. Motley Fool trimmed its IPG Photonics Corporation (NASDAQ:IPGP) stake by 21% in Q4 2021, holding a total of 39,334 shares worth $6.77 million.
On March 14, Raymond James analyst Brian Gesuale downgraded IPG Photonics Corporation (NASDAQ:IPGP) to Underperform from Market Perform without a price target. According to the analyst, almost every demand and cost input indicator has become negative over the past months, with a negligent chance of significant improvement for IPG Photonics Corporation (NASDAQ:IPGP) in 2022. The analyst believes more downside still exists to IPG Photonics Corporation (NASDAQ:IPGP)’s estimates, and said shares may not have fully reflected possible demand destruction the Europe war brings, incremental share loss risk, and a higher long-term cost structure as the company moves away from Russia, a low cost production region.
According to Insider Monkey’s Q4 database, 25 hedge funds were long IPG Photonics Corporation (NASDAQ:IPGP), with collective stakes worth $504 million. Jean-Marie Eveillard’s First Eagle Investment Management is the largest shareholder of the company, with 2.30 million shares worth $396.4 million.
Here is what Artisan Mid-Cap Fund has to say about IPG Photonics Corporation (NASDAQ:IPGP) in its Q3 2021 investor letter:
“IPG Photonics is the leading provider of fiber laser technology for industrial automation markets. Fiber lasers are faster, more powerful and efficient, yet require less maintenance and labor to operate than traditional lasers used in industrial applications—cutting and welding, marking and engraving, and micro-processing. When we initiated our campaign, we believed the company was poised to benefit from additional use cases for fiber lasers, including in the manufacturing processes of electric vehicle batteries and solar panels and in medical applications such as kidney stone removal. However, the company recently indicated supply chain delays and slowing growth in China— nearly 40% of the company’s revenue—were weighing on growth, and the exposure to emerging applications is not yet meaningful enough to offset these headwinds. With limited visibility into when these challenges may abate, we exited our GardenSM position in favor of other industrial technology holdings with stronger fundamental trends.”
3. Cardlytics, Inc. (NASDAQ:CDLX)
Number of Hedge Fund Holders: 27
Percentage Decrease in Stake in Q4: 21%
Cardlytics, Inc. (NASDAQ:CDLX) was incorporated in 2008 and is headquartered in Atlanta, Georgia. The company offers a digital advertising platform to financial institutions in the United States and the United Kingdom. Motley Fool’s 13F filings for Q4 2021 reveal that it trimmed the Cardlytics, Inc. (NASDAQ:CDLX) stake by 21%. The hedge fund owns 168,586 shares worth $11.14 million, representing 0.71% of the total portfolio.
On April 4, Wells Fargo analyst Jeff Cantwell initiated coverage of Cardlytics, Inc. (NASDAQ:CDLX) with an Overweight rating and a $72 price target. The analyst is positive on Cardlytics, Inc. (NASDAQ:CDLX)’s positioning and strategy, noting that it is set for robust top-line growth in FY22 and FY23 because of recovery across its verticals and strong execution. Cardlytics, Inc. (NASDAQ:CDLX)’s improving EBITDA profile is also forecasted to be a “nice ongoing catalyst”, the analyst added.
According to the fourth quarter database of Insider Monkey, 27 hedge funds were long Cardlytics, Inc. (NASDAQ:CDLX), compared to 23 funds in the last quarter. Clifford A. Sosin’s CAS Investment Partners is the leading shareholder of the company, with a position worth $342.7 million.
Here is what Headwaters Capital has to say about Cardlytics, Inc. (NASDAQ:CDLX) in its Q4 2021 investor letter:
“Sells: Cardlytics (“CDLX”). The CDLX position was sold during the quarter as it had become an opportunity cost in the portfolio. CDLX was a small position at the beginning of the year and has subsequently underperformed throughout the year due to a couple of poor strategic acquisitions along with a depressed spending environment from its customer base. The acquisitions were particularly concerning given that the company has not articulated a clear strategic rationale for the deals and have delayed the company’s path to profitability given that both of the acquired companies are generating losses. Given the small size of the position and the need for capital for more attractive investment opportunities, the entire CDLX position was sold during the quarter.”
2. LCI Industries (NYSE:LCII)
Number of Hedge Fund Holders: 12
Percentage Decrease in Stake in Q4: 16%
LCI Industries (NYSE:LCII) is an Indiana-based company that supplies components for the manufacturers of recreational vehicles and adjacent industries such as livestock and modular housing. Motley Fool, as of Q4 2021, slashed its LCI Industries (NYSE:LCII) stake by 16%, holding 55,148 shares worth $8.5 million.
DA Davidson analyst Brandon Rolle initiated coverage of LCI Industries (NYSE:LCII) on April 13 with a Buy rating and a $130 price target. According to the analyst, LCI Industries (NYSE:LCII)’s “dominant competitive position” can drive earnings and cash flow that surpasses investor expectations. He added that LCI Industries (NYSE:LCII) has one of the top management teams in the industry, with a robust balance sheet, balanced capital deployment strategy, and a strong track record of accretive mergers and acquisitions activity.
Among the hedge funds tracked by Insider Monkey, 12 hedge funds reported owning stakes in LCI Industries (NYSE:LCII) at the end of Q4 2021, compared to 17 funds in the preceding quarter. The total stakes held in the fourth quarter amounted to $106.2 million.
1. Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE)
Number of Hedge Fund Holders: 20
Percentage Decrease in Stake in Q4: 11%
Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) is headquartered in Novato, California, operating as a biopharmaceutical company that focuses on the commercialization of treatments for rare and ultra-rare genetic diseases in North America, Europe, and internationally.
Securities filings for Q4 2021 reveal that Motley Fool disposed 11% of its Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) stake. The hedge fund held 119,993 shares of the company in the December quarter, worth $10 million, representing 0.64% of the total 13F holdings.
On March 16, Credit Suisse analyst Tiago Fauth upgraded Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) to Outperform from Neutral with a price target of $105, up from $99. The analyst sees a “compelling risk/reward” profile on the shares ahead of the company’s Angelman syndrome program update. The analyst told investors that they might be ignoring how low the efficacy bar is in this potential multi-billion dollar market.
Among the hedge funds tracked by Insider Monkey, 20 funds were bullish on Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) at the end of the fourth quarter of 2021. Panayotis Takis Sparaggis’ Alkeon Capital Management is the biggest shareholder of the company, with 2.30 million shares valued at $194 million.
You can also take a look at 10 Stocks to Buy in April According to Jim Cramer and 7 Best Stocks to Buy Now According to Bill Ackman.
