In this article, we discuss the 10 stocks that billionaire Ken Fisher is selling. If you want to skip our detailed analysis of Fisher’s investment philosophy, go directly to Billionaire Ken Fisher is Selling These 5 Stocks.
Ken Fisher is perhaps one of the most well known investors and hedge fund managers in the financial world. He founded Fisher Asset Management in 1979, which is a Washington-based hedge fund with a Q3 portfolio worth approximately $161 billion. Fisher’s portfolio for the third quarter remained concentrated in the information technology, finance, healthcare, consumer discretionary, and communications sectors.
Stocks Over ETFs and Mutual Funds
Fisher, who is a billionaire heading one of the largest independent money managers worldwide, suggests investors with sufficient money to look out for individual stocks rather than exchange traded funds and mutual funds. His rationale is quite simple: buying stocks individually is cheaper, more tax efficient, there is lower commission, and investors do not have to pay the management fee for ETFs and mutual funds. He explained that both active and passive investors can track successful ETFs and buy their underlying stocks for a diversified portfolio.
If however, individuals are just starting out with limited funds to invest, they cannot efficiently diversify their portfolio. In that case, Fisher leans towards ETFs over mutual funds, due to tax efficiency and lower costs.
Ken Fisher’s 2022 Stock Market Forecast
Fisher believes like many market analysts that after a solid 2021, 2022 is not expected to be a year when the stock market outperforms. The billionaire believes that the stock market is directly tied to American politics. As the US midterm elections approach, political instability is on the rise, which will impact the stock market returns directly, and the outlook remains uncertain for now.
He stated that historically, the second year of a president’s tenure is always bad for the stock market, but in the third year of Biden’s presidency, there will be political calmness in the country, as has been historically indicated since 1939. Markets will be stable after the first half of 2022, which will result in a strong fourth quarter, bringing the average performance in 2022 significantly up.
Fisher’s extensive portfolio is highly diversified, and the billionaire’s most notable stock picks from the third quarter of 2021 included Microsoft Corporation (NASDAQ:MSFT), PayPal Holdings, Inc. (NASDAQ:PYPL), and Costco Wholesale Corporation (NASDAQ:COST).
Our Methodology
We used the investment portfolio of billionaire Ken Fisher to enlist the 10 most popular stocks that he sold off completely in the third quarter of 2021.
Billionaire Ken Fisher is Selling These Stocks
10. TAL Education Group (NYSE:TAL)
Number of Hedge Fund Holders: 16
TAL Education Group (NYSE:TAL) is a Chinese education and private tutoring company catering to primary and secondary school levels. After China’s ban on the private tutoring sector in September 2021, TAL Education Group (NYSE:TAL)’s stock dipped significantly, and 2022 revenues are expected to decline.
Ken Fisher acquired a stake in TAL Education Group (NYSE:TAL) in Q4 2020, buying 1.6 million shares worth approximately $116 million. He reduced his stake further over time to $37.6 million in Q2 2021, before selling his position completely in TAL Education Group (NYSE:TAL) in Q3 2021.
On January 9, Morgan Stanley analyst Sheng Zhong downgraded TAL Education Group (NYSE:TAL) to Underweight from Equal Weight with a price target of $3.50, down from $5.40. The analyst expects regulation in China to remain in favor of making junior education more equitable and thinks an overhang on senior academic tutoring and test prep vocational tutoring will linger in 2022. In view of the risk regarding Chinese companies listed in the United States, the analyst now applies a 20% discount to TAL Education Group (NYSE:TAL)’s sum-of-the-parts value and also removed high school valuation in his base case.
Hedge funds in the third quarter of 2021 sold out of TAL Education Group (NYSE:TAL) as compared to the preceding quarter. 16 funds held stakes worth $201.1 million in the company as of Q3, whereas 27 funds were bullish on TAL Education Group (NYSE:TAL) in Q2 2021, with stakes amounting to $606.6 million. Yiheng Capital is the leading TAL Education Group (NYSE:TAL) stakeholder in Q3 2021, with 14.3 million shares worth $69.47 million.
Unlike Chinese stocks, major US stocks like Microsoft Corporation (NASDAQ:MSFT), PayPal Holdings, Inc. (NASDAQ:PYPL), and Costco Wholesale Corporation (NASDAQ:COST) remained popular among hedge funds in 2021.
Here is what Tao Value has to say about TAL Education Group (NYSE:TAL) in its Q3 2021 investor letter:
“On the other hand, TAL Education (TAL)’s value is largely destroyed by the policy officially released on 7/24/2021, which essentially outlawed for-profit curriculum-related after school tutoring (which is TAL’s main business). It is a hard lesson learned here that government related risk is a substantial one, especially for Chinese businesses.”
9. Leggett & Platt, Incorporated (NYSE:LEG)
Number of Hedge Fund Holders: 16
Leggett & Platt, Incorporated (NYSE:LEG) is a Missouri-based manufacturer of residential bedding and furniture, automotive seating, and industrial materials. Leggett & Platt, Incorporated (NYSE:LEG)’s dividend yield stands at 4.22% as of January 24, and the company has consistently increased its dividend payments for 50 years.
Fisher first acquired a stake in Leggett & Platt, Incorporated (NYSE:LEG) in Q1 2019, but sold out of his position in Q3 2019. In the third quarter of 2020, the billionaire purchased 7,388 shares of Leggett & Platt, Incorporated (NYSE:LEG), worth $304,000. He continuously reduced his stake in Leggett & Platt, Incorporated (NYSE:LEG) over time, and in Q3 2021, he sold his $222,000 stake in the company entirely.
Leggett & Platt, Incorporated (NYSE:LEG) on November 9 announced a $0.42 per share quarterly dividend, which reflects a 5% increase from its prior dividend of $0.40. The dividend was paid on January 14, to shareholders of record on December 15.
Among the hedge funds tracked by Insider Monkey in Q3 2021, 16 funds were bullish on Leggett & Platt, Incorporated (NYSE:LEG), holding stakes worth $56.1 million. Balyasny Asset Management is the biggest Leggett & Platt, Incorporated (NYSE:LEG) shareholder, with a $10.3 million stake.
8. Kinross Gold Corporation (NYSE:KGC)
Number of Hedge Fund Holders: 27
Kinross Gold Corporation (NYSE:KGC) is a Canadian gold and silver company that operates active mines in Brazil, Ghana, Mauritania, Russia, and the United States. Ken Fisher purchased 20,000 Kinross Gold Corporation (NYSE:KGC) shares in the second quarter of 2021, before selling off his entire stake valued at $122,000 in Q3 2021.
On November 10, Kinross Gold Corporation (NYSE:KGC) declared a quarterly dividend of $0.03, in line with previous. The dividend was paid on December 15, to shareholders of record on December 1.
National Bank analyst Mike Parkin raised the price target on Kinross Gold Corporation (NYSE:KGC) to C$13 from C$12.50 and kept an Outperform rating on the shares on January 7.
In the third quarter of 2021, 27 hedge funds were bullish on Kinross Gold Corporation (NYSE:KGC), with stakes totaling $321 million. Renaissance Technologies is the leading stakeholder of Kinross Gold Corporation (NYSE:KGC), with 32.8 million shares worth $176.1 million.
Although Fisher sold out of Kinross Gold Corporation (NYSE:KGC), his Q3 portfolio included quality names like Microsoft Corporation (NASDAQ:MSFT), PayPal Holdings, Inc. (NASDAQ:PYPL), and Costco Wholesale Corporation (NASDAQ:COST).
7. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Number of Hedge Fund Holders: 37
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is an American holding company that owns and operates retail pharmacy chains, as well as pharmaceutical manufacturing and distribution companies. Walgreens Boots Alliance, Inc. (NASDAQ:WBA) delivers a 3.65% dividend yield as of January 24.
Ken Fisher initially purchased a $577,000 stake in Walgreens Boots Alliance, Inc. (NASDAQ:WBA) in Q4 2014, and held his position until Q2 2017, before selling the stock in Q3 2017. He bought a position in Walgreens Boots Alliance, Inc. (NASDAQ:WBA) in Q4 2017 again, and sold off his shares entirely in Q3 2019. After buying and selling the stock again over the next quarters, he purchased 3,948 shares of the company in Q2 2021, worth $208,000, a stake he sold off completely in the third quarter of 2021.
In its fourth quarter earnings report, published on January 6, Walgreens Boots Alliance, Inc. (NASDAQ:WBA) posted a GAAP EPS of $4.13, exceeding estimates by $3.05. Revenue over the period dropped 6.63% from the prior-year quarter, reaching $33.90 billion, outperforming estimates by $946.75 million.
Mizuho analyst Ann Hynes raised the price target on Walgreens Boots Alliance, Inc. (NASDAQ:WBA) to $56 from $51 and kept a Neutral rating on the shares January 10. The analyst cites an increased outlook of COVID-19 testing and vaccine benefits for the target bump.
Among the hedge funds tracked by Insider Monkey, Camber Capital Management is the largest Walgreens Boots Alliance, Inc. (NASDAQ:WBA) stakeholder as of Q3 2021, with 4 million shares worth $188.2 million. Overall, 37 hedge funds in the third quarter database of Insider Monkey were long Walgreens Boots Alliance, Inc. (NASDAQ:WBA), with stakes equaling $850 million.
Here is what Miller Howard Investments has to say about Walgreens Boots Alliance, Inc. (NASDAQ:WBA) 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 took a position in Walgreens (WBA) based on its low valuation, high dividend yield, and stable business model.”
6. Cheniere Energy, Inc. (NYSE:LNG)
Number of Hedge Fund Holders: 49
Ken Fisher initially purchased a $746,000 stake in Cheniere Energy, Inc. (NYSE:LNG) in Q2 2014, and sold it in the next quarter. The billionaire purchased a position in Cheniere Energy, Inc. (NYSE:LNG) once again in Q3 2019, and sold out of it in Q4 2019. Fisher then bought shares worth $224,000 in Cheniere Energy, Inc. (NYSE:LNG) in Q2 2021, and sold his stake entirely in the third quarter of 2021.
Cheniere Energy, Inc. (NYSE:LNG) is a Texas-based liquefied natural gas company, which is one of the leading exporters of LNG from the United States. The company missed market consensus for earnings per share and revenue in the third quarter of 2021.
On September 7, Cheniere Energy, Inc. (NYSE:LNG) declared its first-ever quarterly dividend of $0.33 per share, which was paid on November 17. The company plans to increase its dividend at a mid-single digit growth rate, positioning the inaugural dividend approximately in line with the S&P 500 average yield and growth rate.
Barclays analyst Theresa Chen raised the price target on Cheniere Energy, Inc. (NYSE:LNG) to $131 from $129 and kept an Overweight rating on the shares on January 20. The analyst expects “more variability” across refining results in Q4, reflective of execution during the quarter, but she has a “generally positive outlook for the group in 2022”.
Carl Icahn’s Icahn Capital LP is the biggest stakeholder of Cheniere Energy, Inc. (NYSE:LNG) in the third quarter of 2021, owning over 16 million shares worth $1.5 billion. Overall, 49 hedge funds were bullish on Cheniere Energy, Inc. (NYSE:LNG) in Q3, with stakes equaling $3.10 billion.
It would be interesting to see how Fisher plays the current turmoil in the markets, especially the volatility faced by tech stocks like Microsoft Corporation (NASDAQ:MSFT) and PayPal Holdings, Inc. (NASDAQ:PYPL).
Here is what ClearBridge Global Infrastructure Value Strategy has to say about Cheniere Energy, Inc. (NYSE:LNG) in its Q3 2021 investor letter:
“Cheniere Energy is an energy infrastructure company that owns and operates U.S. liquefied natural gas (LNG) export facilities. Strong quarterly results and the disclosure of capital allocation policies were positively received by the markets. In addition, continued supply and demand tightness in the LNG market created a favorable commodity price environment.”
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Disclosure: None. Billionaire Ken Fisher is Selling These 10 Stocks is originally published on Insider Monkey.
