In this article, we discuss the 5 stocks that billionaire Philippe Laffont is selling. If you want to see more stocks that the billionaire discarded in Q1, click Billionaire Philippe Laffont is Selling These 10 Stocks.
5. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 79
Pfizer Inc. (NYSE:PFE) is an American multinational biopharmaceutical firm that commercializes medicines, biosimilars, and vaccines. Philippe Laffont owned 10.3 million shares of Pfizer Inc. (NYSE:PFE) in the fourth quarter of 2021, worth about $609 million, representing 2.70% of the total portfolio. The billionaire’s hedge fund dumped the position entirely in Q1 2022.
Morgan Stanley analyst Terence Flynn on July 8 lowered the price target on Pfizer Inc. (NYSE:PFE) to $49 from $52 and kept an Equal Weight rating on the shares after adjusting estimates ahead of the company’s Q2 report. He expects biopharma revenues to remain robust if economic activity dampens and continues to believe firms that can deliver revenue growth are best positioned among the group, the analyst said.
Among the hedge funds tracked by Insider Monkey, Cliff Asness’ AQR Capital Management is the leading position holder in the company, with 10.70 million shares worth over $554 million. Overall, Pfizer Inc. (NYSE:PFE) was part of 79 hedge fund portfolios at the conclusion of Q1 2022, down from 83 funds in the preceding quarter.
Here is what ClearBridge Investments Value Equity Strategy has to say about Pfizer Inc. (NYSE:PFE) in its Q4 2021 investor letter:
“While the level of general turnover abated as we progressed through 2021, it remained high in one area: post-COVID-19 recovery plays. The concept behind this investment thesis was, and still is, straightforward: with the advent of effective vaccines, the path from pandemic to endemic is just a matter of time. As this transition occurs, the estimated excess savings of over $2 trillion built up on U.S. consumer balance sheets will unlock dramatic pent-up demand for experiences, especially global travel. This investment case seemed especially compelling when the Pfizer vaccine positively surprised markets in November 2020. As a result, we made post-COVID-19 stocks (which were trading well below our estimate of recovery value) a sizable theme within the portfolio. We understood this to be a more aggressive tilt in positioning because it required a major improvement in demand to catalyze fundamentals and drive price toward higher business values. While we accepted that recovery would not be smooth and that it would take time to deploy vaccines both domestically and globally, we decided that recovery was the logical path of least resistance and we were being well compensated for these risks.
What we did not account for, however, was vaccine hesitancy and the risk of further infection waves. As a result, the first variant wave, Delta, was a negative surprise to both the market and our team. When the risk surfaced, we immediately updated our probability-driven models and debated how we should react. The resulting conclusion was that the recovery would be delayed and that we should reduce our exposure quickly, subsequently targeting the most aggressive recovery stocks such as cruise lines. We again acted swiftly and decisively to the positive surprise that Pfizer had delivered a high-efficacy antiviral COVID-19 pill. This pill should greatly reduce COVID-19 severity risks globally, increasing the probability of a global travel recovery in 2022. While this is still true, the emergence of the highly mutated Omicron variant set off another infection wave which spurred us to again act quickly and further reduce our risk exposure. This back-and-forth may sound exhausting, but it highlights our compulsion to act if we determine a surprise has a large enough impact on the probabilities that power our valuation-driven investment cases.
