In this article, we discuss the 10 stocks billionaire Ken Griffin is selling in 2022.
Kenneth C. Griffin is the founder and Chief Executive Officer of Citadel Investment Group, a global alternative investment firm. He began his journey into investment from his dorm room at Harvard in 1987, where he installed a satellite dish on the roof to receive real-time stock quotes. During his undergraduate studies, he founded Citadel under the belief that his integration of exceptional talent, advanced quantitative analytics, and cutting-edge technology would be able to generate consistent, strong long-term performance.
In an interview at the Bloomberg Intelligence Market Structure conference in New York, the billionaire hedge fund manager gave his thoughts on current market trends. Here is what Ken Griffin said:
Markets are really afraid of the inflation story because that ties back to the Fed’s path and how higher real rates are going to go. And what we’re seeing is a rotation from growth stocks with earnings very far in the future towards value stocks with earnings here in the present. And this reflects the fact that real rates, for the first time in a very long time, are likely to go positive in 2023. And that freaks out the markets.
Amid a brutal market rout and extreme volatility in 2022, Ken Griffin’s hedge fund surprised the whole of Wall Street, with major market outperformance earlier this April. During that period, Citadel Investment Group’s multi-strategy flagship fund Wellington rallied 7.5%, bringing its year-to-date performance to 12.7%. Additionally, the hedge fund’s Citadel Equities is up 6.46% for the first five months of the year, while its Global Fixed Income fund is up 14.35%, and its Tactical Trading portfolio has risen 9.85% since January.
Since its inception in 1990, Citadel Investment Group has generated remarkable returns for its investors. Using sophisticated quantitative research and a wide array of trading strategies, stemming from Ken Griffin’s love for mathematics, the hedge fund deploys its assets across multiple asset classes and markets, seeking “high risk adjusted returns” for its clients.
As of the fiscal first quarter of 2022, Ken Griffin manages $484.45 billion in 13F securities through his hedge fund. Citadel Investment Group invests heavily in the Technology, Consumer Goods, Services, and Basic Materials sectors. Some of the top stocks in the portfolio of Ken Griffin at the end of March 2022 included Meta Platforms, Inc. (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), and AT&T Inc. (NYSE:T).
Ken Griffin of Citadel Investment Group
Our Methodology
For this list, we picked stocks that were sold off in the first quarter by Citadel Investment Group.
10. Canopy Growth Corporation (NASDAQ:CGC)
Number Of Hedge Fund Holders: 14
Canopy Growth Corporation (NASDAQ:CGC), formerly known as Tweed Marijuana Inc., is a Canadian cannabis company engaged in the production and distribution of cannabis and hemp-based products for recreational and medical uses in Canada, the United States, and Germany. Ken Griffin sold off his stakes in the company by the end of March 2022.
On June 8, Barclays analyst Gaurav Jain lowered the price target on Canopy Growth Corporation to $3.50 from $6 and kept an Underweight rating on the shares. According to the analyst, the company recorded another loss-making quarter in Q4 with “shrinking” Canadian cannabis revenue and slowing consumer revenue. He updated his model for Canopy Growth Corporation to reflect the “continued market share loss it has been suffering.”
At the end of the first quarter of 2022, 14 hedge funds in the database of Insider Monkey held stakes worth $71.86 million in Canopy Growth Corporation, compared to 15 in the preceding quarter worth $62 million.
Unlike Meta Platforms, Inc., Amazon.com, Inc., and AT&T Inc., Canopy Growth Corporation is a stock that Citadel Investment Group dumped in 2022.
9. BHP Group Limited (NYSE:BHP)
Number Of Hedge Fund Holders: 19
BHP Group Limited (NYSE:BHP), known simply as BHP, is a diversified resources company which extracts, processes and markets metals, minerals, coal, iron ore and petroleum products to global markets. BHP Group Limited was among the many stocks that Ken Griffin sold off in Q1.
BHP Group’s annual revenue for 2021 stood at $60.8 billion, jumping by 41.66% from its 2020 revenue of $42.9 billion. Shares of the company have risen by 4.65% year-to-date.
On June 7, Jefferies analyst Christopher LaFemina upgraded BHP Group Limited to Buy from Hold with a price target of $82, up from $72. In a research note to investors, he states that macro risks are elevated and mining shares “should be volatile,” with the sector being undervalued and poised to outperform as China recovers. The analyst raised his iron ore and coal price forecasts and upgraded a handful of names in the group.
As of the end of the first quarter, 19 hedge funds were bullish on BHP Group, with combined stakes worth $2.24 billion. This is in comparison to 25 hedge funds in the previous quarter. Fisher Asset Management was the firm’s largest Q1 shareholder, with a $1.3 billion stake consisting of 16.9 million shares.
8. Dolby Laboratories, Inc. (NYSE:DLB)
Number Of Hedge Fund Holders: 22
Dolby Laboratories, Inc. (NYSE:DLB) is an American company specializing in audio noise reduction, audio encoding/compression, spatial audio, and HDR imaging. The company’s products are used in content creation, distribution, and playback to enhance image and sound quality.
Earlier this May, Rosenblatt analyst Steve Frankel initiated coverage of Dolby Laboratories, Inc. with a Buy rating and $90 price target. According to the analyst, the company’s “dominant” market position, high margins and consistent cash flow present an “excellent safe harbor in turbulent seas.” He views current share levels as an attractive entry point for a “high quality franchise with best-in-class margins and cash flow.”
According to its Q1 earnings report, Dolby Laboratories, Inc. registered an EPS of $0.92, beating market estimates by $0.10. Additionally, the company announced revenues of $334.37 million, surpassing forecast estimates by $1.86 million.
At the end of the first quarter of 2022, 22 hedge funds in the database of Insider Monkey held stakes worth $408 million in Dolby Laboratories, Inc., compared to 26 in the previous quarter worth $572 million.
In its Q1 2022 investor letter, Aristotle Capital Management, an asset management firm, highlighted a few stocks and Dolby Laboratories, Inc. was one of them. Here is what the fund said:
“Founded in 1965 and headquartered in San Francisco, Dolby Laboratories, Inc. designs and manufactures audio and visual products. Its technology makes images brighter, colors further refined and the audio experience more immersive by providing an enhanced ability to pinpoint the placement and volume of specific sounds. Products that utilize Dolby’s technology span both commercial and home theaters, televisions, sound bars, computers and mobile devices.
The company partners with music artists, movie directors and other content creators, teaching them how to properly leverage Dolby’s suite of products to create next-generation productions. Dolby Laboratories, Inc. generates revenue by licensing its technologies to software vendors and over 500 electronics manufacturers, the likes of which include Sony (SONY), Microsoft (MSFT), Samsung (OTC:SSNLF) and Apple (AAPL). The company’s end markets consist of Broadcast (39% of licensing revenue), Mobile (22%), Consumer Electronics (15%), PC (12%) and Other (12%). (Click here to read full text)
7. 10x Genomics, Inc. (NASDAQ:TXG)
Number Of Hedge Fund Holders: 22
10x Genomics, Inc. (NASDAQ:TXG) is a California-based biotechnology company that designs and develops gene sequencing technology utilized in scientific research. As of Q1 2022, Citadel Investment Group completely sold its stakes in the company.
Earlier this May, Citi analyst Patrick Donnelly lowered the price target on 10x Genomics, Inc. to $100 from $150 and maintained a Buy rating on the shares post the Q1 results. The analyst cites high growth peer multiple contraction for the target drop.
10x Genomics, Inc. reported its Q1 results on May 4, posting an EPS of -$0.14, beating estimates by $0.19. The company’s $114.50 million revenue also surpassed market consensus estimates by approximately $1.17 million.
A total of 22 hedge funds held long positions in 10x Genomics, Inc. in the first quarter of 2022, the same as the preceding quarter. 12 West Capital Management is a prominent shareholder of the company, with more than 2 million shares worth $298.5 million.
6. Dine Brands Global, Inc. (NYSE:DIN)
Number Of Hedge Fund Holders: 24
Dine Brands Global, Inc. (NYSE:DIN) is an American food and dining company based in California that manages and operates the famous brands, Applebee’s and IHOP. Ken Griffin’s Citadel Investment Group pulled out of Dine Brands Global, Inc. in Q1 2022, selling off his Q4 2021 stakes worth $4.24 million.
On June 9, Barclays analyst Jeffrey Bernstein lowered the price target on Dine Brands Global, Inc. to $88 from $93 and kept an Overweight rating on the shares. Restaurants fall within consumer discretionary and with recessionary odds rising, some investors will view restaurants as “uninvestable,” and while the analyst understands the sentiment, he does not believe it to be accurate.
The number of hedge funds tracked by Insider Monkey that reported holding stakes in Dine Brands Global, Inc declined to 24 in Q1 2022, from 28 in the previous quarter. The total value of these stakes is valued at approximately $218.8 million. Glen Furhman’s MSD Capital is one of the most notable investors in Dine Brands Global, Inc. with over 740,545 shares worth more than $57.7 million.
As opposed to Meta Platforms, Inc., Amazon.com, Inc., and AT&T Inc., Dine Brands Global, Inc. is one of the stocks Ken Griffin dropped in Q1 2022.
5. Liberty Broadband Corporation (NASDAQ:LBRDA)
Number Of Hedge Fund Holders: 26
Liberty Broadband Corporation (NASDAQ:LBRDA) operates as a holding company, which engages in the cable, broadband and mobile location technology businesses. Operating in the telecommunications industry in the United States, it provides cable services to both residential and small to medium businesses through its fiber, hybrid fiber, and coaxial cable infrastructure.
This May, Deutsche Bank analyst Bryan Kraft lowered the price target on Liberty Broadband Corporation to $158 from $196 and maintained a Buy rating on the shares post the Q1 results. On May 6, Liberty Broadband Corporation reported a Q1 GAAP EPS of $1.77, beating analysts’ predictions by $0.28. The revenue of $238 million slipped 3.6% year-over-year, missing estimates by $8.84 million.
At the end of the first quarter of 2022, 26 hedge funds in the database of Insider Monkey held stakes worth $606 million in Liberty Broadband Corporation, up from 22 the preceding quarter worth $754.7 million. Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Eagle Capital Management is a leading shareholder in Liberty Broadband Corporation, with 8.36 million shares.
Here is what Alphyn Capital Management has to say about Liberty Broadband Corporation in its Q1 2022 investor letter:
“We part-financed the additions to Amazon and Wayfair by trimming some Liberty Broadband. Liberty Broadband is a HoldCo and tracking stock whose primary holding is Charter Communications. Charter benefits from its extensive network of cable assets that can provide higher bandwidth internet at better prices than offerings from traditional telecom and satellite carriers. Moreover, with excellent management and capital stewardship, Charter has increased its high-margin broadband subscriber base despite losing some video subscribers to “cord-cutting.”
Nevertheless, competition is intensifying, with telecom companies launching aggressive Fiber-To-The-Home upgrade plans and new entrants emerging with Fixed Wireless technologies. Cable’s coaxial lines are, for once, the inferior technology compared to FTTH. While Charter has many ways to upgrade its lines to remain competitive in the medium term, it no longer has a distinct advantage. As a result, in markets with fiber competition, cable companies typically have a 50% market share vs. the 80% market share they enjoy without fiber competition.
With Fixed Wireless, Cable has a strong advantage in owning the network for internet backhaul, but it is more difficult to predict the longer-term competitive environment. In both cases, moving from a near-monopoly to a duopoly, or longer-term an oligopoly, likely comes with weaker pricing power and slower subscriber growth. These considerations warranted trimming our Liberty Broadband position, and we will monitor developments closely.”
4. NCR Corporation (NYSE:NCR)
Number Of Hedge Fund Holders: 37
NCR Corporation (NYSE:NCR), previously known as National Cash Register, is an American software, consulting and technology company providing several professional services and electronic products.
Earlier this April, RBC Capital analyst Daniel Perlin lowered the price target on NCR Corporation to $44 from $54 but maintained an Outperform rating on the shares. In a research note to investors, Perlin states that the company’s Q1 results were “sharply below forecasts”, particularly as a result of disappointing hardware revenue and cost inflation. However, he believes that the stock can re-rate higher as it continues to pivot to higher growth recurring revenues.
NCR Corporation reported its Q1 results on April 26, posting earnings per share of $0.33, missing consensus estimates by $0.30. Additionally, the company’s revenue of $1.87 billion fell short of analysts’ predictions by $62.65 million.
According to Insider Monkey’s Q1 data, 36 hedge funds were bullish on NCR Corporation, the same as the earlier quarter. Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Point72 Asset Management is a leading shareholder in NCR Corporation, with 2.8 million shares worth more than $111 million.
3. Shell plc (NYSE:SHEL)
Number Of Hedge Fund Holders: 37
On June 9, Credit Suisse analyst Amy Wong initiated coverage of Shell Plc (NYSE:SHEL) with an Outperform rating and 3,000 GBp price target. Based on Wong’s remarks, Shell Plc’s energy transition strategy stands out as the most progressive in terms of decarbonization and for generating strong cash flow that supports shareholder distributions in both the near and medium term.
At the end of the first quarter of 2022, 37 hedge funds in the database of Insider Monkey held stakes worth $5.6 billion in Shell plc (NYSE:SHEL), compared to 41 in the previous quarter worth $2.6 billion. Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Shell plc (NYSE:SHEL), with 19.5 million shares worth more than $1 billion.
Here is what Harding Loevner International Equity Fund has to say about Shell plc (NYSE:SHEL) in its Q1 2022 investor letter:
“While risks of unforeseen consequences arising from the Ukraine conflict are high, on this front we are cautiously optimistic that China will work hard to maintain its neutrality in a credible way, as it is a huge beneficiary of trade with the rest of the world, especially the rich developed nations. We think it likely that China, along with India, will continue to buy oil and gas from Russia (just as Europe, at least for now, plans to keep its gas pipelines open), and do not expect that fact to alter China’s trade relations with the West much. Nevertheless, we must contemplate that our optimism is misplaced on the importance of membership in the global network of exchange. If our central and optimistic case—admittedly an educated guess—is wrong, then we’d need to greatly modify our views of which companies in our opportunity set will face new barriers to profitable growth, and which might stand to benefit, relatively, from a further receding of globalization. (Global trade, after all, has never matched the peak share of GDP it reached in 2008, before the Global Financial Crisis.) We’d expect such a world to be less efficient, as the cold logic of comparative advantage is demoted as a determinant of which goods or services are produced and where. That would lead to a less prosperous world, since exploiting comparative advantage is a cornerstone of wealth creation. If regional blocs began to raise limits on the movement of capital as well as goods, we’d need to parse which of our multi-national companies were at risk of declining sales from increasingly hostile, siloed countries. Royal Dutch Shell has found its Siberian oil and gas joint venture assets stranded by the combination of sanctions and the public opprobrium of Russia’s actions.”
2. Paramount Global (NASDAQ:PARA)
Number Of Hedge Fund Holders: 40
Paramount Global (NASDAQ:PARA) operates as an American multinational mass media and entertainment conglomerate corporation that produces and distributes entertainment content through studios, networks, streaming services, live events, and merchandise.
On June 2, Wolfe Research analyst Peter Supino downgraded Paramount Global to Underperform from Outperform with a price target of $24, down from $49, as he assumed coverage of the stock. According to the analyst, Paramount Global was late to streaming with a broad-based DTC service, and is “playing catch-up” to gain share in an increasingly competitive landscape while its content is perceived as a tier below the top players.
On May 3, Paramount Global released its earnings report for the fiscal first quarter of 2022, with earnings per share of $0.60 surpassing market estimates by $0.08. On the other hand, revenue for the quarter fell short of estimates by $57.96 million.
At the end of the first quarter of 2022, 40 hedge funds in the database of Insider Monkey held stakes worth $3.4 billion in Paramount Global, compared to 64 in the previous quarter worth $1 billion. Michael Weinstock’s Monarch Alternative Capital is one of the leading stakeholders in Paramount Global, with over 12.2 million stakes worth approximately $133 million.
1. Kohl’s Corporation (NYSE:KSS)
Number Of Hedge Fund Holders: 42
Kohl’s Corporation operates as the largest department store chain in the United States, with 1,162 locations in almost every state. The company offers branded apparel, footwear, accessories, beauty, and home products through its stores and website.
Of late, Kohl’s Corporation is involved in exclusive sales talks with the Franchise Group Inc. According to the details provided, the owner of the Vitamin Shoppe and other distinct brands has offered to buy the Wisconsin-based department store chain for $60 per share. However, the final transaction will have to be approved by the board of directors of both companies.
Earlier this May, Citi analyst Paul Lejuez cut estimates for several companies and downgraded several retail stocks, including Kohl’s Corporation which was downgraded to Neutral from Buy, with a price target of $39, down from $55. The analyst states that a lack of stimulus and the burden of higher food and fuel prices are squeezing several lower income consumers, leading to a pullback in discretionary categories like apparel and home. He adds that retailers are facing higher costs, which will now be harder to pass on to consumers.
Out of all the hedge funds tracked by Insider Monkey, 42 held positions in Kohl’s Corporation with a combined value of $789.3 million. This is compared to 34 hedge funds in the preceding quarter, with $707 million worth of stakes. Jeffrey Smith’s Starboard Value LP is a notable investor in Kohl’s Corporation, and ranks as its biggest shareholder with 3.3 million shares valued at $201.4 million.
You can also take a look at 10 Stocks Warren Buffett is Selling and 10 Best Stocks to Buy According to Billionaire Mario Gabelli.
Follow Insider Monkey on Twitter
Suggested articles:
This article is originally published at Insider Monkey.
