In this article, we’ll examine billionaire Steve Cohen’s portfolio management strategy and approach to investing in stocks. We’ll also review 10 stocks billionaire Steve Cohen is selling. You can skip our detailed discussion about Steve Cohen’s investment philosophy and portfolio management strategies and jump directly to Billionaire Steve Cohen Is Selling These 5 Stocks.
Steve Cohen, the founder of Point72 Asset Management, is one of the world’s leading hedge fund managers, boasting a proven track record of consistently beating benchmarks. Cohen graduated from the Wharton School at the University of Pennsylvania and began his Wall Street career in 1978 at Gruntal & Co as a junior trader in the options arbitrage department. He made $8,000 in profits on the first day of trading and eventually helped the firm make $100,000 a day.
In 1992, he founded S.A.C. Capital Advisors, one of the most successful hedge funds of its era, averaging returns of 25% from 1992 to 2013. The firm traded 20 million shares daily in 1999, and by 2006 it accounted for 2% of the total stock market trading volume. Cohen founded Point72 Asset Management in 2014 after S.A.C. became the subject of an SEC insider trading investigation. Point72 uses multiple strategies to capitalize on profit-making opportunities, including long/short equity portfolios, fixed income strategies, and global quantitative investments. Point72 Asset Management returned over 9% last year.
Steve Cohen, who has a net worth of $11.8 billion, likes to take advantage of short-term price movements rather than holding stakes for the long term. During the December quarter, his firm initiated stakes in 403 stocks and dumped 359 positions, ending the quarter with $25 billion worth of 13F securities in its portfolio. The list of 10 stocks billionaire Steve Cohen is selling includes The Boeing Company (NYSE:BA), Starbucks Corporation (NASDAQ:SBUX), Baidu, Inc. (NASDAQ:BIDU), AT&T Inc. (NYSE:T), and Sirius XM Holdings Inc. (NASDAQ:SIRI).
Furthermore, Cohen sold numerous high-growth stocks that had achieved strong gains over the past two years. Those stocks include Oracle Corporation (NYSE:ORCL), PayPal Holdings, Inc. (NASDAQ:PYPL), and Accenture plc (NYSE:ACN). During the past two years, investors like Cohen have heavily favored growth stocks. Yet the billionaire’s exit strategy from some of some stocks seems to have been perfectly timed, as growth stocks like Oracle Corporation (NYSE:ORCL), PayPal Holdings, Inc. (NASDAQ:PYPL), and Accenture Plc (NYSE:ACN) have plunged sharply in recent months.
Our Methodology
We analyzed Point72 Asset Management’s 13F filing with the SEC for the fourth quarter reporting period to uncover some of the most prominent stocks the fund sold during Q4. The following is the list of 10 stocks billionaire Steve Cohen is selling.
Note: All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q4 2021 reporting period.
Steven Cohen of Point72 Asset Management
Billionaire Steve Cohen Is Selling These 10 Stocks
10. The Boeing Company (NYSE:BA)
Number of Hedge Fund Holders: 52
Cohen sold off his stake in The Boeing Company (NYSE:BA) in the fourth quarter of 2021. Shares of The Boeing Company (NYSE:BA) have plunged 13% so far in 2022, having failed to gain any momentum from the positive sentiments surrounding defense stocks following the Russian invasion of Ukraine.
In 2021, The Boeing Company (NYSE:BA) generated $26 billion in revenue from its defense business segment, while revenue from its commercial planes business came in at $16 billion. It appears that investors have been reacting negatively to larger than expected losses from the aircraft maker. The Boeing Company (NYSE:BA) posted a GAAP loss per share of $7.15 for the fourth quarter while its revenue of $14.7 billion also missed Wall Street expectations by $1.87 billion.
On the positive side, the company generated positive free cash flow of $494 million for the fourth quarter. The company has also been working on returning the 737 MAX to service globally in a safe manner. The 737 MAX has completed over 300,000 revenue flights since the FAA approved its return to service in November 2020, and its reliability remains above 99%.
Unlike tech growth stocks such as Oracle Corporation (NYSE:ORCL), PayPal Holdings, Inc. (NASDAQ:PYPL), and Accenture plc (NYSE:ACN), The Boeing Company (NYSE:BA) took a major hit from the various travel restrictions and pandemic related policies that were instituted around the world.
Of the 924 elite funds tracked by Insider Monkey that filed 13Fs for the December 31 reporting period, The Boeing Company (NYSE:BA) was in 52 portfolios as of the end of the December quarter, flat compared to the previous quarter.
9. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 55
Point72 Asset Management initiated a new position in Starbucks Corporation (NASDAQ:SBUX) at the beginning of 2021 and sold the entire stake in the December quarter. Shares of Starbucks Corporation (NASDAQ:SBUX) underperformed in 2021 and have fallen below the $100 level in 2022.
The latest selloff is partly attributed to the company’s lower than expected earnings for the December quarter. Its earnings per share of $0.72 missed analysts’ expectations of $0.80 Starbucks Corporation (NASDAQ:SBUX) also slashed its outlook for fiscal 2022. The company anticipates GAAP earnings per share to drop by a 4% to 6% and adjusted earnings per share to rise by 8% to 10%. Previously, the coffee giant forecasted GAAP earnings per share to decline by 4% and adjusted earnings per share to jump by at least 10%.
Like Steve Cohen, other hedge funds are also looking less bullish about the fundamentals of Starbucks Corporation (NASDAQ:SBUX), as the number of long hedge fund positions declined over the past three straight quarters. As of December 2021, Starbucks Corporation (NASDAQ:SBUX) was in 55 13F portfolios compared to 58 positions in the previous quarter.
In its fourth quarter investor letter, Polen Capital, an investment management firm, mentioned a few stocks, including Starbucks Corporation (NASDAQ:SBUX). Here is what Polen Capital stated:
“We trimmed Starbucks as a source of funding and to edge our weighting down. While the company has managed well through a difficult environment, we recognize that lockdowns are categorically challenging for this business. Starbucks has a robust mobile order and pay platform fueled by a sophisticated app as well as a strong loyalty program, but this doesn’t alter the fact that the store-based retail business is important to the company. As a result, we felt a smaller weighting was appropriate.”
8. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 39
Steve Cohen’s Point72 Asset Management dumped its entire stake in Baidu, Inc. (NASDAQ:BIDU) during the December quarter. Baidu, Inc. (NASDAQ:BIDU) is a Chinese multinational technology company specializing in artificial intelligence and internet-related services.
Compared to high-growth stocks such as Oracle Corporation (NYSE:ORCL), PayPal Holdings, Inc. (NASDAQ:PYPL), and Accenture plc (NSE:ACN), Baidu, Inc. (NASDAQ:BIDU) was among the biggest laggards in 2021, as shares of Baidu, Inc. (NASDAQ:BIDU) are down close to 50% over the past twelve months. On the positive side, the internet search company has successfully been transforming its business model from an online marketing company to a hard-tech supplier in fields such as self-driving cars, cloud computing, and chips.
The number of long hedge fund positions in Baidu, Inc. (NASDAQ:BIDU) has fallen sharply for the past three successive quarters. As of December 31, 39 hedge funds were bullish about the company compared to 89 at the end of the first quarter of 2021.
7. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 70
Point72 Asset Management first initiated a position in AT&T Inc. (NYSE:T) during the second quarter of 2021 and added to its existing stake in the third quarter. However, the firm sold its entire stake in the company during the December quarter. Shares of AT&T Inc. (NYSE:T) have been struggling over the past two years due to increasing competition and declining revenue. AT&T Inc. (NYSE:T) posted revenue of $41 billion for the fourth quarter, down 10% from the year-ago period.
Despite the poor financial performance, AT&T Inc. (NYSE:T) gained elite funds’ confidence during Q4. According to data tracked by Insider Monkey, AT&T Inc. (NYSE:T) was in 70 hedge funds’ portfolios as of the end of December compared to 66 positions in the previous quarter.
In its fourth quarter investor letter, Weitz Investment Management, an investment management firm, mentioned a few stocks, including AT&T Inc. (NYSE:T). Here is what Weitz Investment Management stated:
“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T to offer high-speed data (either via wireless connects or by building new fiber-optic networks).”
6. Sirius XM Holdings Inc. (NASDAQ:SIRI)
Number of Hedge Fund Holders: 24
The share price of Sirius XM Holdings Inc. (NASDAQ:SIRI) also underperformed in 2021 despite robust financial numbers. In 2021, its revenue of $8.70 billion increased 8% from the previous year, while net income jumped to $1.31 billion from $131 million a year earlier. Moreover, strong growth in its self-pay subscribers figures to be a major catalyst for future growth. In 2021, Sirius XM Holdings Inc. (NASDAQ:SIRI) added more than one million net new self-pay subscribers. Furthermore, its strong financial position enabled Sirius XM Holdings Inc. (NASDAQ:SIRI) to declare a special cash dividend of $0.25 per share.
Despite its recent solid financial performance and growth trajectory, hedge fund sentiment towards Sirius XM Holdings Inc. (NASDAQ:SIRI) fell during Q4. As of December 31, Sirius XM Holdings Inc. (NASDAQ:SIRI) was in 24 hedge funds’ portfolios compared to 27 positions in the previous quarter. Israel Englander’s Millennium Management was among the leading stakeholders in the company.
Like Oracle Corporation (NYSE:ORCL), PayPal Holdings, Inc. (NASDAQ:PYPL), and Accenture plc (NYSE:ACN), Sirius XM Holdings Inc. (NASDAQ:SIRI) is among the 10 stocks billionaire Steve Cohen is selling.
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Disclosure: None. Billionaire Steve Cohen Is Selling These 10 Stocks is originally published on Insider Monkey.
