Billionaire David Tepper is Selling These 5 Stocks

2. Baidu Inc. (NASDAQ:BIDU)

Number of Hedge Fund Holders: 59

Baidu, Inc. (NASDAQ:BIDU) is a multinational technology company that operates in the Chinese market and caters to internet search segments. The Chinese company ranks second on our list of the 10 stocks David Tepper is selling.

The company released its quarterly earnings report for the second quarter of 2021 on August 12, with reported earnings per share at $2.38, beating market estimates by $0.32. Additionally, the company reported revenues of $4.84 billion, crossing estimates by $51.58 million. As of the second quarter, 59 hedge funds out of 873 funds tracked by Insider Monkey held stakes in Baidu Inc. (NASDAQ:BIDU) worth $3.47 billion. This is compared to the first quarter’s 89 hedge funds with a stake of $6.57 billion.

On October 1, Arete analyst Richard Kramer upgraded Baidu Inc. (NASDAQ:BIDU) to Neutral from Sell with a $152 price target.

Horos Asset Management, in its Q1 2021 investor letter, mentioned Baidu, Inc. (NASDAQ:BIDU). Here is what the fund said:

“We have also fully exited our stake in Baidu, following their outstanding performance during the period and their lower relative upside potential compared to other investment alternatives, which we will discuss below.

The Chinese technology platform company Baidu has also been held in the portfolios managed by Alejandro, Miguel and myself for several years. During this period, we have seen very high volatility in its share price, which we have taken advantage of to make significant rebalancing moves in our position (in fact, we even sold our entire position once, when we thought the stock’s upside potential was exhausted). After several years of instability, market sentiment turned very positive, putting an end to the historical advertising problems in the healthcare sector, the divestments in O2O (Online-to-Offline) businesses that continued to weigh on the company’s margins, the IPO of part of the iQiyi streaming business (which hid Baidu’s underlying cash generation capacity) and the tough competition from other industry giants such as Tencent and Alibaba, as well as the entry of new players with disruptive business models (ByteDance). At the same time, the company’s recent commitment to electric vehicles contributed even more to this change of narrative. Baidu’s share price rose almost fourfold from the March 2020 lows to all-time highs and reached a valuation where the margin of safety, in our view, was too narrow.”