In this article, we will be looking at the 5 stocks that are being dumped by billionaire investor Richard Chilton. If you want to see our detailed analysis of these stocks, Mr. Chilton’s investment philosophy, and Chilton Investment Company’s history and past performance, you can head directly to Billionaire Richard Chilton is Dumping These 10 Stocks.
5. The Clorox Company (NYSE:CLX)
Number of Hedge Fund Holders: 34
The Clorox Company (NYSE:CLX) manufactures and markets consumer and professional products worldwide. It operates through four segments: Health and Wellness, Household, Lifestyle, and International.
This November, DA Davidson analyst Linda Bolton Weiser raised her price target on The Clorox Company (NYSE:CLX) to $162 from $145 and reiterated a Neutral rating on the shares.
Here’s what LRT Capital Management had to say about The Clorox Company (NYSE:CLX) in their first quarter 2021 investor letter:
“For several months now, our largest position has been Clorox – the cleaning products company. Besides wipes, the company also manufactures bleach, charcoal, cat litter, plastic bags, and container products. Clorox benefited during the Covid-19 pandemic from an increased demand for cleaning products. Companies and consumers trust the Clorox brand – a source of the company’s huge competitive advantage.
United Airlines, for example, chose to partner with Clorox in its push to reassure consumers about the safety of air travel. The company is a typical “defensive” holding – subject to very small fluctuations in end market demand. Its branded consumer products remain in strong demand. Historically (pre-Covid), the company’s sales grew in line with GDP, while earnings-per-share grew slightly faster due to operational and financial leverage. We expect sales will decline slightly in the next few quarters as the Covid-19 pandemic comes to an end, but we believe this decline is more than accounted for by the company’s low valuation.
On February 4th, Clorox reported results for Q4 2020, with both earnings and sales beating estimates. Sales grew by +27% (vs. 20% estimate) from the prior year’s Q4, and EPS increased +39% ($2.03 vs. $1.75 expected). The company continues to see robust demand and raised its sales and EPS guidance for the rest of the year. Shares are down 4% year-to-date. We believe the shares are undervalued at 20x trailing and 24x forward earnings and currently represent an excellent opportunity.”
4. Texas Roadhouse Inc (NASDAQ:TXRH)
Number of Hedge Fund Holders: 36
Texas Roadhouse Inc (NASDAQ:TXRH) operates a chain of casual dining restaurants in the United States and internationally. As of December 29, 2020, it operated 537 domestic restaurants and 97 franchise restaurants.
In the third quarter of 2021, Chilton Investment Company completely exited Texas Roadhouse Inc (NASDAQ:TXRH). Comparing this to the second quarter of 2021, the fund’s stake in the company was $2.23 million, which accounted for 0.05% of Mr. Chilton’s 13F portfolio.
Insider Monkey was able to identify 36 hedge funds that held stakes in Texas Roadhouse Inc (NASDAQ:TXRH) by the end of the third quarter. The total value of these stakes was over $993.48 million, up from $806.75 million in the previous quarter.
3. Coherent, Inc. (NASDAQ:COHR)
Number of Hedge Fund Holders: 37
Coherent, Inc. (NASDAQ:COHR) provides lasers, laser-based technologies, and laser-based system solutions for a range of commercial, industrial, and scientific research applications.
Chilton Investment Company’s stake in the company was roughly $695,000 at the end of the second quarter of 2021. Mr. Chilton completely sold his stakes in Coherent, Inc. (NASDAQ:COHR) in the third quarter of 2021.
Out of the 867 elite funds tracked by Insider Monkey, 37 held stakes in Coherent, Inc. (NASDAQ:COHR) by the end of the third quarter of 2021. These stakes amounted to $1.46 billion.
Appleseed Fund published its first-quarter 2021 investor letter, in which the firm mentioned Coherent, Inc. (NASDAQ:COHR). Here’s what the firm had to say:
“Our most significant contributors to the Fund’s equity performance during the quarter (includes) Coherent (COHR). During the quarter, Coherent announced that it was being acquired, after which several other bidders emerged. Between the takeover announcement and the bidding war among Coherent suitors, the shares rallied strongly during the quarter.”
2. Ecolab Inc. (NYSE:ECL)
Number of Hedge Fund Holders: 39
Ecolab Inc. (NYSE:ECL) provides water, hygiene, and infection prevention solutions and services worldwide. The company operates through the following segments: Global Industrial, Global Institutional & Specialty, and Global Healthcare & Life Sciences. On December 2, Ecolab Inc. (NYSE:ECL) announced that its board of directors raised the company’s quarterly dividend by 6.3% to $0.51 per share, up from $0.48 per share. The dividend is payable on January 18, 2022, for shareholders of record December 14, 2021.
This December, Evercore ISI analyst Stephen Richardson resumed coverage of Ecolab Inc. (NYSE:ECL) with an In-Line rating and a $235 price target.
By the end of the third quarter of 2021, 39 hedge funds held stakes in Ecolab Inc. (NYSE:ECL) worth $2.55 billion. Chilton Investment Company was not one of these 39 funds since Mr. Chilton sold his stakes in the company and completely exited the stock in the third quarter.
1. United Parcel Service, Inc. (NYSE:UPS)
Number of Hedge Fund Holders: 42
United Parcel Service, Inc. (NYSE:UPS) provides letter and package delivery, transportation, logistics, and financial services. It operates through three segments: U.S. Domestic Package, International Package, and Supply Chain & Freight.
Mr. Chilton decided that it was time to let the investment go and sold his stake in the company in the third quarter of 2021. United Parcel Service, Inc. (NYSE:UPS) covered 0.07% of Chilton Investment Company’s 13F portfolio in the second quarter of 2021 when Mr. Chilton’s stake in the company was in excess of $3.04 million.
On October 27, Raymond James analyst Patrick Tyler Brown raised his price target on United Parcel Service, Inc. (NYSE:UPS) to $260 from $240 and reiterated a Strong Buy rating on the shares following the company’s earnings results for the third quarter of 2021.
United Parcel Service, Inc. (NYSE:UPS) was spotted on 42 hedge fund portfolios by the end of the third quarter of 2021. The total stakes of these funds in the company amounted to $1.26 billion.
ClearBridge Investments published its “Dividend Strategy” second quarter 2021 investor letter, in which the firm mentioned United Parcel Service, Inc. (NYSE:UPS). Here’s what the firm had to say:
“We funded the shift primarily with trims in UPS following big gains in this name. UPS is a long-term holding that have been and remain core holdings. During the quarter, however, we took gains and resized the positions to reflect their current risk-reward post strong increases in the stocks.
UPS too has been a core, long-term holding. For many years its stock languished alongside fundamental performance that was both uneven and often uninspiring. Since Carol Tomé took the reins last summer and capitalized on COVID-19-related freight disruptions, UPS’s earnings have soared, and the stock has followed suit. We trimmed the position toward the end of the quarter despite continued near-term momentum and an undemanding valuation multiple. This trim reflects the longerterm risk, though hard to quantify, that Amazon may become a full-fledged competitor and meaningfully disrupt the dynamics of the industry. While not our base case, this risk cannot be disproven. We continue to be very bullish on UPS’s near-term outlook and optimistic about its longer-term outlook, while also continually looking over our shoulder to make sure Amazon is not on our heels.”
You can also take a look at 10 Best Dividend Stocks to Buy According to Billionaire Richard Chilton and 10 Best Dividend Stocks to Buy According to Billionaire George Soros.
