In this article, we discuss the 5 tech stocks billionaire Richard Chilton is selling. If you want to read our analysis of Chilton’s investment philosophy, go directly to Billionaire Richard Chilton is Selling These 10 Tech Stocks.
5. Markforged Holding Corporation (NYSE:MKFG)
Number of Hedge Fund Holders: 22
Markforged Holding Corporation (NYSE:MKFG) is a Watertown, Massachusetts-based firm that produces 3D printers, software, and related materials. It specializes in the provision of industrial additive manufacturing platforms.
Richard Chilton sold off his entire stake in Markforged Holding Corporation (NYSE:MKFG), worth $332 million, during Q1 2022.
On June 10, Jared Maymon at Berenberg started coverage on Markforged Holding Corporation (NYSE:MKFG) with a price target of $35 and a Buy rating. The analyst believes that Markforged Holding Corporation’s (NYSE:MKFG) intellectual property and administrative policies differentiate it from its competitors in the industry. Maymon thinks the company has successfully developed a sustainable “gross-margin profile.”
Here’s what Baron Funds said about Markforged Holding Corporation (NYSE:MKFG) in its Q3 2021 investor letter:
“During the quarter, we participated in the SPAC offering of Markforged Holding Corporation, an innovative 3D printing or additive manufacturing company. The stock traded down materially after the SPAC deal closed and we ultimately decided to sell some of our Markforged shares to harvest a short-term tax loss and provide capital for an investment in another 3D printing company.”
Markforged Holding Corporation (NYSE:MKFG) was held by 22 hedge funds as of Q1 2022.
4. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 100
PayPal Holdings, Inc. (NASDAQ:PYPL) is a technology company offering a digital payments platform to users around the world. The platform allows consumers to conduct online money transfers in around 200 markets.
Richard Chilton sold off 96% of his stake in PayPal Holdings, Inc. (NASDAQ:PYPL) during Q1 2022.
On June 22, the price target on PayPal Holdings, Inc. (NASDAQ:PYPL) was lowered from $190 to $155 at Credit Suisse, while an Outperform rating was maintained. The firm credited the reduction in price target to a number of factors, including the departure of CFO John Rainey and inflationary pressures.
Last week, PayPal Holdings, Inc. (NASDAQ:PYPL) laid off employees working across different states in the risk management and operations department in an attempt to cut costs. PayPal Holdings, Inc. (NASDAQ:PYPL) stock is 62% down YTD as of June 21.
Here’s what Baron Funds said about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q1 2022 investor letter:
“PayPal Holdings, Inc. enables digital payments for consumers and merchants worldwide. Shares fell on disappointing 2022 guidance that called for 15% to 17% revenue growth but flat EPS growth due to higher credit costs and a higher tax rate. Management also tempered user growth expectations due to a strategic shift toward improving engagement of existing users and away from less-productive new user acquisition. Despite reduced earnings expectations, we believe the share price decline is overdone given PayPal’s growth opportunities and competitive advantages. We reduced PayPal Holdings, Inc.as it became clear that strong growth trends during the early part of the pandemic were not persisting in a more normal environment.”
PayPal Holdings, Inc. (NASDAQ:PYPL) was held by 100 hedge funds as of Q1 2022.
3. Copart, Inc. (NASDAQ:CPRT)
Number of Hedge Fund Holders: 44
Copart, Inc. (NASDAQ:CPRT) is a Dallas, Texas-based technology leader in the vehicle auction industry. Copart, Inc. (NASDAQ:CPRT) utilizes its VB3 technology to connect over 750,000 buyers and sellers globally.
Chilton Investment Company closed its position in Copart, Inc. (NASDAQ:CPRT) during Q1 2022.
Copart, Inc. (NASDAQ:CPRT) posted strong Q3 FY22 results, with revenue and earnings outperforming the consensus estimates. The company recorded service revenue of $766.3 million, compared to $623.8 million last year. However, total operating expenses increased by 39.8% YoY, and net income declined from $286.8 million to $278.6 million.
Wedgewood Partners shared its insights on Copart, Inc. (NASDAQ:CPRT) in its Q2 2021 investor letter. Here’s what the firm said:
“We first purchased Copart in late 2019. In this review, we will reprint parts of our original commentary on the Company and offer our thoughts on how the Company performed throughout the pandemic.
Copart is the largest company in the automotive salvage and auction industry. The industry is a duopoly, with the Company commanding a +40% market share. Insurance Auto Auctions is the Company’s only competitor of size or scale. The Company generates about 80% of its revenue in the U.S. The other 20% is generated in international markets. The U.K. generates the lion’s share at 15%. The rest is spread out in newer markets that include Canada, Brazil, Ireland, Germany, Spain, the U.A.E., Bahrain, Finland, and Ireland. Copart owns the largest global buying network, which essentially matches global demand with local supply.
The demand for salvage autos is a mix of dismantlers and rebuilders of used and refurbished auto parts that serve the auto repair market, whereby salvaged parts are considerably cheaper than new or OEM parts. Demand for autos that are damaged but worthy of repair has become a staple of international demand, where repaired cars are not subject to onerous safety regulations. With the Company’s advent of nationwide and global online salvage bidding, additional demand for complete, drivable autos from used car dealers and individuals has become quite significant in the demand mix. Insurance companies processing totaled autos make up the bulk (+87%) of the supply of auctioned autos. Copart has long relationships with State Farm, Allstate, Nationwide, and Farmers. GEICO recently signed on, which could easily yield +130,000 autos per year in supply. Other supply parties include charities, banks, rental car companies, fleet operators, and auto dealers. Copart acts as an agent, earning fees from both buyers and sellers…(Click here to see the full text)”
At the end of Q1 2022, Copart, Inc. (NASDAQ:CPRT) was held by 44 hedge funds.
2. Medtronic plc (NYSE:MDT)
Number of Hedge Fund Holders: 54
Medtronic plc (NYSE:MDT) is a Minneapolis, Minnesota-based medical technology company. Richard Chilton sold off his entire stake in Medtronic plc (NYSE:MDT) during Q1 2022.
In its Q4 FY22 results, Medtronic plc (NYSE:MDT) posted an EPS Normalized Actual of $1.52, missing the consensus estimate by $0.04. Furthermore, revenue was recorded at $8.09 billion, missing the analysts’ estimates by $340.08 million.
On June 1, James Mainwaring at Atlantic Equities downgraded Medtronic plc (NYSE:MDT) from Overweight to Neutral. The analyst also lowered the price target on the stock from $125 to $105, citing weak quarterly results.
In its Q1 2022 investor letter, Polen Capital shared its insights on Medtronic plc (NYSE:MDT). Here’s what the firm said:
“Ireland-based Medtronic is a leading health care company focused on supplying many important life-saving devices like pacemakers, defibrillators, and insulin pumps. This is another company with attractive pricing power and a business model that can hold up well during inflationary periods. Medtronic has increased market share across almost 70% of its portfolio since the start of the pandemic, which is a higher percentage than even before the pandemic. With growth-oriented companies falling out of favor over the quarter, the stock’s relatively discounted valuation (at approximately 19x earnings) also bolstered its performance.”
Of the 912 hedge funds in Insider Monkey’s database, 54 funds held a stake in Medtronic plc (NYSE:MDT) as of Q1 2022.
1. Texas Instruments Incorporated (NASDAQ:TXN)
Number of Hedge Fund Holders: 46
Texas Instruments Incorporated (NASDAQ:TXN) is a Dallas, Texas-based technology company involved in the production of semiconductors and processing chips.
Richard Chilton sold off 95% of his stake in Texas Instruments Incorporated (NASDAQ:TXN) during Q1 2022.
In April, Mark Lipacis at Jefferies lowered the price target on Texas Instruments Incorporated (NASDAQ:TXN) from $220 to $203 but maintained a Buy rating on the stock. The reduction in price target came after Texas Instruments Incorporated (NASDAQ:TXN) guided the EPS for Q2 to be 10% lower than the consensus.
Here’s what Davis Funds said about Texas Instruments Incorporated (NASDAQ:TXN) in its Q4 2021 investor letter:
“Within technology and communication services, we own a number of online businesses and semiconductor related companies, including Alphabet, Amazon, Intel, Applied Materials and Texas Instruments. Within the realm of high technology, we believe that leadership positions reflect enduring and widening competitive advantages over smaller competitors, with few exceptions. This is because online businesses, as well as semiconductor companies, benefit from economies of scale. An online search and advertising engine will, in general, be more profitable per unit of cost as it grows larger in terms of users and advertising dollars. It is a hub-and-spoke model, in other words, where it is generally not necessary to grow expenses at the same rate that revenues grow beyond a certain threshold. Therefore, returns on capital tend to be higher, the larger and more dominant the online search company is.”
As of Q1 2022, Texas Instruments Incorporated (NASDAQ:TXN) was held by 46 hedge funds, down from 53 in the previous quarter
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