In this article, we discuss 5 stocks that billionaire Andreas Halvorsen is selling. If you want our detailed analysis of Mr. Halvorsen and some of the other stocks he was selling, go directly to Billionaire Andreas Halvorsen Is Selling These 10 Stocks.
5. Pinterest, Inc. (NYSE:PINS)
Number of Hedge Fund Holders: 58
Pinterest, Inc. (NYSE:PINS) is a California-based company offering image sharing and pinboards to save ideas. Andreas Halvorsen acquired a stake in Pinterest, Inc. (NYSE:PINS) in Q3 2021, purchasing 7.23 million shares of the company, worth $368.4 million. The billionaire disposed of his stake entirely in the fourth quarter of 2021.
On February 3, Pinterest, Inc. (NYSE:PINS) reported its earnings for Q4 2021. The company posted EPS of $0.49, beating estimates by $0.03. Revenue for the period jumped roughly 20% year-on-year to $846.66 million, surpassing estimates by $19.42 million. The stock surged almost 13% after the Q4 results went public.
DA Davidson analyst Tom Forte lowered his price target on Pinterest, Inc. (NYSE:PINS) to $33 from $45 on February 4 and kept a ‘Neutral’ rating on the shares. The analyst noted that the company’s Q4 results were “better than feared” given the recent weakness in shares, but he prefers to remain on the sideline while waiting for Pinterest, Inc. (NYSE:PINS) to turn the corner on engagement.
In Q3 2021, 58 hedge funds in the database of Insider Monkey owned stakes in Pinterest, Inc. (NYSE:PINS), down from 63 funds in the quarter earlier. Philippe Laffont’s Coatue Management held a prominent stake in Pinterest, Inc. (NYSE:PINS), with 3.72 million shares worth $189.71 million.
Here is what Baron Asset Fund had to say about Pinterest, Inc. (NYSE:PINS) in its Q4 2021 investor letter:
“As of December 31, 2021, Baron Asset Fund held 65 positions. The Fund’s 10 largest holdings represented 42.0% of assets, and the 20 largest represented 64.3% of assets. The Fund’s largest weighting was in the IT sector at 31.1% of assets. This sector includes software companies, IT consulting firms, internet services companies, technology distributors, and data processing firms. The Fund held 26.5% of its assets in the Health Care sector, which includes investments in life sciences companies, and health care equipment, technology, and supplies companies. The Fund held 14.7% of its assets in the Industrials sector, which includes investments in research and consulting companies, industrial conglomerates, and machinery companies. The Fund also had significant weightings in Financials at 11.3% of assets and Consumer Discretionary at 7.7% of assets. We also sold Pinterest, Inc., a social media network, because of concerns about the sustainability of its long-term growth rate.”
4. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 73
Headquartered in Montana, Snowflake Inc. (NYSE:SNOW) is an on-demand data warehousing company providing data storage and analytics services. Andreas Halvorsen’s Viking Global acquired shares of Snowflake Inc. (NYSE:SNOW) in Q3 2020, and by the third quarter of 2021, the hedge fund held 1.4 million shares worth $434.3 million. Viking Global dumped its shares of Snowflake Inc. (NYSE:SNOW) entirely in Q4 2021.
On February 15, Mizuho analyst Gregg Moskowitz lowered his price target on Snowflake Inc. (NYSE:SNOW) to $410 from $450 and kept a ‘Buy’ rating on the shares. Although demand for the software sector remained strong, the reduced price targets on “high-growth software vendors” reflect the rising rate environment, according to the analyst.
Among the hedge funds monitored by Insider Monkey, 73 funds were bullish on Snowflake Inc. (NYSE:SNOW) on September 30, with stakes equaling $14.5 billion, compared to 70 funds in the quarter earlier, holding stakes in Snowflake Inc. (NYSE:SNOW) worth $12.5 billion. Altimeter Capital Management, the leading Snowflake Inc. (NYSE:SNOW) stakeholder, held a $6.3 billion position in the company as of Q3 2021.
Here is what Guardian Capital Management had to say about Snowflake Inc. (NYSE:SNOW) in its Q4 2021 investor letter:
“When we read the quarterly earnings updates, we continue to be impressed by the magnitude of the reallocation of resources within society. For instance, cloud spending is expected to nearly triple by 2025. The migration to the public cloud is a massive opportunity for Snowflake, as well as dozens of companies that are still small private ventures today. The markets for digital commerce, payments, advertising, streaming of content, and information intelligence, are likely to keep compounding at double digit growth rates for the foreseeable future.
No wonder there is much excitement and people feel increasing pressure to participate in wealth creation that is taking place in those fields. While many intelligent capital allocators understand the value that is to be found in investing in internet-enabled businesses, the fear of timing and valuation has been high for years. The shift in thinking and the new mental models required to transition from linearly growing companies to some of the most scalable business models is hard. It becomes even harder when having to do the homework in an echo chamber of worried market observers constantly pointing at rising stock prices combined with the ‘I told you so’ crowd that are flourishing nowadays.
All in all, we are convinced that the podium on which we are focused – the data-driven, cloudnative, founder-led, businesses that enable people to play and work digitally – is where the magic happens for a long time to come. What matters to us is whether the businesses are worth at least double in 2025. We think that when we will be looking back at today’s prices in 2030, they will likely look like bargains for several businesses.”
3. Activision Blizzard, Inc. (NASDAQ:ATVI)
Number of Hedge Fund Holders: 80
Activision Blizzard, Inc. (NASDAQ:ATVI) is a California-based video game company that is set to be acquired by Microsoft Corporation (NASDAQ:MSFT) in a $69 billion deal. Activision Blizzard, Inc. (NASDAQ:ATVI) declared a $0.47 per share annual dividend on February 3, payable on May 6.
Publishing its Q4 results on February 3, Activision Blizzard, Inc. (NASDAQ:ATVI) posted earnings per share of $1.25, missing estimates by $0.07. The $2.49 billion revenue it pulled in represented an 18.49% year-over-year decline, missing estimates by roughly $342 million.
On February 4, Benchmark analyst Mike Hickey raised his price target on Activision Blizzard, Inc. (NASDAQ:ATVI) to $100 from $95 and kept a ‘Buy’ rating on the shares. According to the analyst, investors will either be awarded with an approximate 20% upside to Microsoft’s $95 bid or 27% upside to Benchmark’s fiscal 2023 valuation target if the deal is blocked.
A total of 80 hedge funds held long positions in Activision Blizzard, Inc. (NASDAQ:ATVI) in the third quarter of 2021, up from 78 funds in the preceding quarter. D E Shaw owned the leading stake in Activision Blizzard, Inc. (NASDAQ:ATVI), with 9.8 million shares worth $765.25 million.
Here is what Cooper Investors had to say about Activision Blizzard, Inc. (NASDAQ:ATVI) in its Q4 2021 investor letter:
“In our previous letter we discussed the Responsible Investing aspects around the workplace issues disclosed earlier in the year at Activision Blizzard. Subsequently, further information emerged including allegations and anecdotes of historic awareness and inaction to the issues within the ranks of executive management. So too the latest earnings announcement saw the Blizzard studio push out several game launches, a very real consequence of workplace issues in a human capital-based business. The remedial efforts required are greater than we originally thought and the position was sold in what has been a disappointing experience.”
2. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 95
Headquartered in Minnesota, UnitedHealth Group Incorporated (NYSE:UNH) is a multinational insurance and managed healthcare company. Viking Global started building a position in UnitedHealth Group Incorporated (NYSE:UNH) in Q4 2016, and by the third quarter of 2021, the hedge fund held a $283.8 million stake in the company. Andreas Halvorsen completely disposed of his position in UnitedHealth Group Incorporated (NYSE:UNH) in Q4 2021.
On January 19, UnitedHealth Group Incorporated (NYSE:UNH) posted its Q4 earnings, announcing EPS of $4.48, exceeding estimates by $0.17, while revenue came in at $73.74 billion, outperforming estimates by $774.36 million.
SVB Leerink analyst Whit Mayo raised his price target on UnitedHealth Group Incorporated (NYSE:UNH) to $550 from $480 on January 26 and kept an ‘Outperform’ rating on the shares. The analyst observed that the company’s Q4 results were as expected. However, against political risks and COVID-19 gradually fading away, he can see the stock pushing a premium against the S&P 500.
Rajiv Jain’s GQG Partners held the biggest stake in UnitedHealth Group Incorporated (NYSE:UNH) at the end of September, with 3.6 million shares worth $1.4 billion. Overall, 95 hedge funds were bullish on the stock in the third quarter of 2021.
Here is what Third Point Management had to say about UnitedHealth Group Incorporated (NYSE:UNH) in its Q3 2021 investor letter:
“UnitedHealth is one of the largest healthcare companies in the world and a market leader in both its insurance and healthcare services (Optum) businesses. We initiated our position during the 2020 Presidential election at a time of heightened political and regulatory uncertainty.
We believe under its new CEO, Andrew Witty, UnitedHealth can not only preserve its market dominance and sustain industry-leading growth rates across most of its key segments but also enter new healthcare services markets. Witty is known as a mission-driven CEO who clearly articulates his view that providing high-quality, affordable health care services is a social good. He receives consistently high marks from former colleagues, and we believe that his leadership approach will ballast and even strengthen UNH’s already impressive management and employee ranks. The insurance and services businesses are synergistic and complementary, which entrenches United’s critical role in care financing, access, and management. This dynamic gives us confidence in the durability of United’s market leadership…” (Click here to see the full text)
1. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 106
Viking Global dumped its Netflix, Inc. (NASDAQ:NFLX) stake entirely in Q4 2021. The hedge fund initially invested in Netflix, Inc. (NASDAQ:NFLX) in Q2 2014, and by the third quarter of 2021, held 410,913 shares of the company worth $250.7 million. Netflix, Inc. (NASDAQ:NFLX) is a digital streaming and original production company based in California.
Netflix, Inc. (NASDAQ:NFLX) reported its results for Q4 on January 20, announcing EPS of $1.33, beating the market consensus by $0.51. Revenue for the period came in at $7.71 billion, surpassing estimates by $2.24 million.
On January 31, Citi analyst Jason Bazinet upgraded Netflix, Inc. (NASDAQ:NFLX) to ‘Buy’ from ‘Neutral’ with a price target of $450, down from $595. Although prevailing equity values don’t assume material sub growth or improving subscriber economics beyond 2023, the analyst believes that Netflix, Inc. (NASDAQ:NFLX) has “ample pricing power”.
Among the hedge funds tracked by Insider Monkey in Q3 2021, 106 were bullish on Netflix, Inc. (NASDAQ:NFLX), down from 113 funds in the prior quarter. Fisher Asset Management held a $2.5 billion stake in Netflix, Inc. (NASDAQ:NFLX) in the third quarter.
Here is what Rowan Street Capital had to say about Netflix, Inc. (NASDAQ:NFLX) in its Q4 2021 investor letter:
“It’s always good to remind ourselves of what we are trying to really do here in the first place?
As we constantly repeat this in almost all annual letters, our goal from day one was to compound our investor’s capital at double-digit returns over the long run.
Now, everyone loves outsized returns. We could compare a strong track record of long-term returns to a fit body. Both need a lot of patience, discipline and both require you to “pay the price.” The reality is that the majority of people lack patience, lack discipline and are just not willing to “pay the price.” We all know what paying the price in fitness really means, but let’s take a look at what that means in investing.
Let’s look at an example of Netflix stock performance since 2010 and compare that to the S&P 500 index. As you can tell from the chart below, the difference over the past 12 years has been absolutely staggering and leaves anyone salivating over these kinds of returns (6,981% for NFLX vs. 312% for the S&P 500).
(Click here to see the charts)
With that, now let’s take a look at the “Cost of Admission” in order to generate these kinds of returns. We want to show you the painful drawdowns over the same time period since 2010. Here, you had a couple of 80% drawdowns back in the 2011-2013 time period, a bunch of 40% drawdowns, and countless 20%+ drawdowns.
So, the question is how many people do you think actually were able to withstand the volatility of Netflix stock over the last 12 years, pay the price and hold it all the way through? During the investment period shown above, Netflix was up almost seventy-fold, and this volatility is the price you had to pay to get it. A lot of market participants are striving for these outsized returns, but just don’t want to pay that price. It seems too risky and they try to cling towards safety without realizing that this is the cost of admission for above average returns.
The good news is that at Rowan Street we do have the patience, the discipline and are very willing to ’pay the price’ in order to achieve the long-term results we have outlined. All that we ask of you, our Limited Partners, is to trust our process and to allow us to do what we do best — compound your hard-earned capital over time. If you can do that, our partnership will work like magic — we are confident in that! In addition, you should derive some comfort in that the majority of our net worth is invested in Rowan Street alongside you (we like to eat our own cooking). We want our partners’ financial fortunes to move in lockstep with ours.”
You can also take a look at Warren Buffett’s Performance in 2021: 10 Best Stock Picks and 10 New Stock Picks of Suraj Parkash Chopra’s Force Hill Capital Management.
