5 Stocks You Should Sell Before Recession

3. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 158 

Alphabet Inc. (NASDAQ:GOOG) is a technology company based in California. On April 26, the company posted earnings for the first quarter of 2022, missing market estimates on earnings per share by $1.14. YouTube growth also showed signs of slowing as ad revenue grew at only 14%. The net income also dipped to $16.44 billion, down from $17.93 billion over the same period last year. Ruth Porat, the CFO of the firm, has said that the slowdown in growth had come as a result of the “industry wide advertising hiccups” due to the Russia-Ukraine war.

On April 27, Guggenheim analyst Michael Morris kept a Buy rating on Alphabet Inc. (NASDAQ:GOOG) stock and lowered the price target to $3,000 from $3,350, identifying tough comps, Russia impact, and unfavorable foreign exchange impacts as some of the headwinds for the firm. 

Among the hedge funds being tracked by Insider Monkey, London-based investment firm TCI Fund Management is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG) with 2.9 million shares worth more than $8.5 billion. 

In its Q4 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) was one of them. Here is what the fund said:

“In contrast, we made a different kind of mistake about a decade ago. Google, now Alphabet Inc. (NASDAQ:GOOG), performed very well for us while we owned it. The company kept outperforming our assumptions and we kept lowering them to be conservative. “Trees do not grow to the sky.” The stock kept going up and our value grew but did not keep pace with the stock. It hit our estimate of fair value and we sold it with a nice gain, patting ourselves on the back. We kept following the company and what they actually did over the next several years was roughly double the assumptions we used to value it. Therefore, our value was too conservative, and we sold it too cheaply, missing many years of compounding. Fortunately, we experienced some volatility several years ago that allowed us to purchase Alphabet Inc. (NASDAQ:GOOG) (Google) again with a margin of safety.”