In this article, we discuss the 10 tech stocks billionaire Richard Chilton is selling. You can skip our analysis of Chilton’s investment philosophy and go directly to Billionaire Richard Chilton is Selling These 5 Tech Stocks.
In 1992, Richard Chilton, an American billionaire, established his own hedge fund Chilton Investment Company. The fund was established on the tenet that firms with strong business models and management would generate positive, risk-adjusted returns over the course of an economic cycle. Chilton’s investment philosophy is characterized by taking long-term positions in companies valued at reasonable prices. The bottom-up, fundamental approach aims to generate compounding returns in bullish markets and safeguard cash in volatile economic conditions.
The fund also views environmental and social governance (ESG) as crucial components to ensure a company’s sustainable growth and encourage shareholder participation. Keeping this in mind, Chilton Investment Company includes ESG criteria as another factor in its review process while making investment decisions.
In Q1 2022, the hedge fund made investments in 11 new companies, closed its position in 20 stocks, and reduced its holdings in 64 stocks. Chilton’s Q1 2022 portfolio is valued at $4.16 billion and includes notable companies such as Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META), and Apple Inc. (NASDAQ:AAPL).
Richard Chilton of Chilton Investment Company
Our Methodology
With this context in mind, let’s begin our list of the 10 tech stocks that billionaire Richard Chilton is selling. These stocks have been picked from the Q1 2022 portfolio of Chilton Investment Company. We have included tech stocks in which the billionaire closed his entire position or sold off at least 90% of his stake.
Billionaire Richard Chilton is Selling These 10 Tech Stocks
10. American Tower Corporation (NYSE:AMT)
Number of Hedge Fund Holders: 50
American Tower Corporation (NYSE:AMT) is one of the leading providers of next-generation wireless technologies and infrastructure. The company is working towards the expansion of telecom services in rural locations.
The hedge fund had first initiated a position in American Tower Corporation (NYSE:AMT) in Q2 2020 with 1,635 shares. It went on to sell the entire stake in the fourth quarter of 2020 before re-opening a position in Q4 2021 with 719 shares. In Q1 2022, Richard Chilton again sold off his entire stake in American Tower Corporation (NYSE:AMT).
On June 21, American Tower Corporation (NYSE:AMT) was double upgraded from Underweight to Overweight by Philip Cusick at JPMorgan. The analyst also increased the price target on American Tower Corporation (NYSE:AMT) from $245 to $285. Cusick described the company’s revenue stream as “highly predictable and recession-resistant.” American Tower Corporation (NYSE:AMT) stock is down 13.80% YTD, and the analyst believes the company’s nature of revenue creates a favorable risk/reward ratio.
American Tower Corporation (NYSE:AMT) also increased its quarterly dividend by 2.1% to $1.43. The dividend is payable on July 8. The company’s forward dividend yield stands at 2.42% as of June 21.
American Tower Corporation (NYSE:AMT) was mentioned in the Q2 2021 investor letter of ClearBridge Investments. Here’s what the firm said:
“On a regional basis, the U.S. and Canada was the top contributor to quarterly performance, of which U.S. communications company American Tower was one of the lead performers. American Tower is a leading independent owner, operator and developer of wireless and broadcast communications infrastructure. The company has 41,000 sites in the U.S. and a further 139,000 sites across 19 countries, predominantly emerging markets (India 75k, Latin America 40k and Africa 18k). American Tower performed well after the U.S. network operators announced plans to deploy 5G spectrum, with investment much larger and much sooner than the market was anticipating.”
American Tower Corporation (NYSE:AMT) was held by 50 hedge funds at the end of Q1 2022.
9. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 99
Booking Holdings Inc. (NASDAQ:BKNG) is a Connecticut-based travel technology corporation. The company provides services in more than 220 territories and has over 28 million listings.
Chilton Investment Company sold off its entire stake in Booking Holdings Inc. (NASDAQ:BKNG) during Q1 2022. The hedge fund first opened a position in Booking Holdings Inc. (NASDAQ:BKNG) in Q1 2020 with 28,110 shares at an average quarterly share price of $1754.7.
On June 9, Eric Sheridan at Goldman Sachs lowered the price target on Booking Holdings Inc. (NASDAQ:BKNG) from $2460 to $2360 and reiterated a Neutral rating on the stock. Owing to an uncertain macro-environment, the analyst shared that he is adopting a conservative outlook on the online travel industry and slashed the gross bookings and EBITDA estimates. Furthermore, the inflationary pressure is also expected to weigh down on the demand levels to a certain extent.
ClearBridge Investments shared its stance on Booking Holdings Inc. (NASDAQ:BKNG) in its Q1 2022 investor letter. Here’s what the firm said:
“Other actions during the quarter included the sale of consumer name Booking Holdings (NASDAQ:BKNG). We sold Booking, the owner of online travel agencies Booking.com, Priceline and Kayak, due to its higher exposure to Europe where we believe a rebound in travel will be slowed by the spillover effects of the Ukraine invasion on consumer spending.”
As of Q1 2022, 99 hedge funds held a stake in Booking Holdings Inc. (NASDAQ:BKNG), up from 92 in the preceding quarter.
8. Trimble Inc. (NASDAQ:TRMB)
Number of Hedge Fund Holders: 28
Trimble Inc. (NASDAQ:TRMB) specializes in the provision of technology solutions to make work processes more efficient. The company offers software for multiple purposes such as data sharing, route selection, and 3D design.
Chilton Investment Company had taken a stake in Trimble Inc. (NASDAQ:TRMB) during Q4 2021 with 2,420 shares before closing the entire position in the first quarter of 2022.
On May 23, Erik Lapinski at Morgan Stanley upgraded Trimble Inc. (NASDAQ:TRMB) from Underweight to Equal-Weight. However, the analyst lowered the price target on the stock from $70 to $67. Lapinski sees the stock’s past premium to the S&P 500 as more in line with its multiple now. He expects the stock performance to be impacted more by earnings revisions in comparison to re-ratings as in the past.
Earlier this year, Trimble Inc. (NASDAQ:TRMB) lowered its FY22 revenue guidance from $3.95 – $4.05 billion to $3.8 – $3.88 billion. Meanwhile, the consensus estimate stands at $4.02 billion. Trimble Inc. (NASDAQ:TRMB) cut the guidance due to the fluctuations in foreign exchange rates and certain regulatory changes.
Trimble Inc. (NASDAQ:TRMB) was held by 28 hedge funds at the end of Q1 2022, down from 32 in the previous quarter.
7. II-VI Incorporated (NASDAQ:IIVI)
Number of Hedge Fund Holders: 26
II-VI Incorporated (NASDAQ:IIVI) is a Saxonburg, Pennsylvania-based manufacturer of optoelectronic components and semiconductors. The company’s optical systems make use of engineered materials to improve efficiency and durability.
Richard Chilton closed his position in II-VI Incorporated (NASDAQ:IIVI) during Q1 2022. The stock had been a part of Chilton Investment Company’s portfolio since the first quarter of 2021.
On May 10, Simon Leopold at Raymond James reiterated an Outperform rating on II-VI Incorporated (NASDAQ:IIVI). The analyst increased the price target on the stock from $79 to $82, citing strong Q3 FY22 results. II-VI Incorporated (NASDAQ:IIVI) posted an EPS Normalized Actual of $0.95, surpassing the consensus estimate by $0.10. Revenue was reported at $827.7 million, beating the analysts’ estimates by $22.92 million. However, II-VI Incorporated (NASDAQ:IIVI) issued mixed guidance for the fourth quarter of the year. While Leopold appreciated the company’s ability to work through frequent lockdowns in China, he expressed concern over macro-economic uncertainty and the impact of inflation on the firm.
Giverny Capital discussed its outlook on II-VI Incorporated (NASDAQ:IIVI) in its Q4 2021 investor letter. Here’s what the firm said:
“As for purchases, in the fourth quarter we added modestly to our holding in II-VI Inc. We talked about II-VI (pronounced Two-Six) in our third quarter letter and will repeat that we continue to believe this optical components manufacturer is well-positioned in a variety of growing markets, including network communications; electric vehicles; industrial automation and defense. II-VI’s share price plunged after it emerged as the high bidder for the laser technology company Coherent last summer. We bought II-VI after the plunge, and in our first months of ownership, the stock has performed well.”
Of the 912 hedge funds in Insider Monkey’s database, 26 funds held a stake in II-VI Incorporated (NASDAQ:IIVI) at the end of Q1 2022, down from 36 in the fourth quarter of 2021.
6. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 93
Adobe Inc. (NASDAQ:ADBE) is a California-based computer software firm. The company provides creative-cloud services and specializes in digital media and marketing solutions.
Chilton Investment Company reduced its holding in Adobe Inc. (NASDAQ:ADBE) by 99% in Q1 2022. The hedge fund now only owns 2,048 shares in the company, representing 0.02% of the overall portfolio.
Adobe Inc. (NASDAQ:ADBE) posted strong Q2 2022 results, with revenue and earnings surpassing the analysts’ estimates. However, the Q3 guidance presented by the company was lower than the consensus estimates. Adobe Inc. (NASDAQ:ADBE) guided total revenue to be around $4.43 billion as opposed to the $4.51 billion consensus estimate. Furthermore, the Non-GAAP EPS was estimated to be $3.30, lower than the $3.40 consensus. The company also cut its guidance for FY 2023. Adobe Inc. (NASDAQ:ADBE) credited the economic uncertainty and currency fluctuations for the lowered forecasts. Furthermore, the earnings are also expected to be impacted by the management’s decision to stop the sales of all its products in Russia and Belarus.
On June 21, Keith Weiss at Morgan Stanley downgraded Adobe Inc. (NASDAQ:ADBE) from Overweight to Equal-Weight and lowered the price target from $591 to $361. The analyst stated that the company is facing increased competition, and the shift to its Digital Experience business will slow down the earnings per share growth as this is a relatively lower margin segment.
Here’s what Baron Funds said about Adobe Inc. (NASDAQ:ADBE) in its Q1 2022 investor letter:
“Shares of Adobe Inc. (NASDAQ:ADBE), the leading provider of content creation, document management, and marketing software, were weak in the quarter, down 19.7% along with the overall software industry. Continued investor fears around the possibility of pandemic-driven pullforward in demand, increasing competition, and earnings results that were in line with expectations also weighed on shares. While Adobe is seeing slower year-over-year volume growth due to tougher compares, it continues to execute well, with management calling out strong engagement and retention rates in Digital Media, in line with pre-COVID levels while the company continues innovating rapidly, broadening its offering. We continue to believe that Adobe is well positioned given its marquee brand and best-in-class technology, which helps content creators and marketing professionals better reach, communicate, and sell their companies’ products in an increasingly digitally connected world.”
Of the 912 hedge funds in Insider Monkey’s database, 93 funds held a stake in Adobe Inc. (NASDAQ:ADBE) as of Q1 2022.
Some of the popular companies included in Chilton’s Q1 2022 portfolio are Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META), and Apple Inc. (NASDAQ:AAPL).
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Disclose. None. Billionaire Richard Chilton is Selling These 10 Tech Stocks is originally published on Insider Monkey.
