Below is the list of 5 stocks Steve Cohen is selling. For a detailed discussion about Steve Cohen’s investment philosophy and portfolio management strategies please see Billionaire Steve Cohen Is Selling These 10 Stocks.
5. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 60
Steve Cohen’s Point72 Asset Management initiated a stake in Oracle Corporation (NYSE:ORCL) during the September quarter of 2021 and dumped the entire stake in the December quarter. Oracle is one of many software stocks that had generated robust share price gains for investors over the past two years. The company is also one of the somewhat rare tech companies that offers dividends to shareholders, with its dividend yield currently hovering around 1.67%.
Market analysts are showing confidence in Oracle’s future fundamentals. For instance, Monness Crespi Hardt analyst Brian White has a $126 price target for Oracle due to confidence in its cloud business. Deutsche Bank analyst Brad Zelnick predicts Oracle to grow its cloud infrastructure market share by 30% annually over the next several years.
4. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 112
Paypal Holdings, Inc. (NASDAQ:PYPL) is one of the favorite stocks among growth investors due to its robust growth trends and strong fundamentals. Its strategy of offering crypto services has further bolstered its revenue growth trends over the past two years. Steve Cohen first initiated a position in PayPal during the second quarter of 2019 and sold out the entire stake in the December quarter of 2021.
In its fourth quarter investor letter, Harding Loevner, an investment management firm, mentioned a few stocks, including PayPal Holdings. Here is what Harding Loevner stated:
“Within IT, PayPal reported slower growth outside its core US market and lowered its earnings guidance for 2022 just enough to catch the wrath of the expensiveness vigilantes. Viewed by sector, IT and Health Care were the biggest detractors in the quarter. Within IT, PayPal reported slower growth outside its core US market and lowered its earnings guidance for 2022 just enough to catch the wrath of the expensiveness vigilantes.”
3. PepsiCo, Inc. (NYSE:PEP)
Number of Hedge Fund Holders: 63
Billionaire Steve Cohen bought a stake in PepsiCo, Inc. (NYSE:PEP) at the beginning of 2021 and sold its entire position in the December quarter to capitalize on the share price run. Shares of PepsiCo surged more than 25% over the past 12 months amid improving financial numbers and the economic reopening. PepsiCo is also one of the best stocks to hold for the long-term given its extensive dividend growth history.
Of the 924 hedge funds tracked by Insider Monkey that filed 13Fs for the December SEC reporting period, PepsiCo was in 63 of their portfolios as of December 31. Terry Smith’s Fundsmith LLP was among the leading stakeholders in the company.
2. Accenture plc (NSE:ACN)
Number of Hedge Fund Holders: 52
Accenture plc (NSE:ACN) shares have surged sharply during the past two years. Steve Cohen’s Point72 missed capitalizing on the bulk of that period, initiating a position in the company during the third quarter of 2021. Nonetheless, by the time the fund dumped its entire stake just a quarter later, its position had potentially gained 30% or more in value.
In its fourth quarter investor letter, Third Point Management shared its bullish analysis on Accenture plc (NSE:ACN). Here is what Third Point Management stated:
“Accenture, the gold standard in IT Services, is a high-quality compounder at the nexus of two post-Covid megatrends: the acceleration of digitization across industries globally and an emerging IT talent war. It specializes in the highest value work and is the leader in digital and cloud transformations. For the past two decades, Accenture has compounded free cashflow per share at 12% per year on a fully unlevered basis. It has been able to sustain these high rates of compounding due to rising IT spend, rising IT outsourcing, and consistent market share gains. Accenture is positioned to benefit from skyrocketing demand for IT services, partially due to the coronavirus pandemic, which dramatically accelerated the need for digitization across industries. As companies urgently undertake large scale digital and cloud transformations, tech laggards with historically poor IT hiring capabilities must digitize to survive. We believe that as IT services demand accelerates and shifts towards digital transformation projects (where Accenture is particularly well-positioned), Accenture’s market share gains will sustainably accelerate.
Accenture’s growth will also be supported by an increasingly constrained supply of IT talent. Remote work is decoupling employment from location, globalizing the IT talent pool and enabling leading technology companies to compete for talent outside their home markets much more proactively than in the past. That dynamic is making it increasingly difficult for companies in other industries to hire IT professionals at a time of their greatest need. This IT talent “supply shock” is a tremendous opportunity for Accenture, whose best-in-class brand and talent recruiting give the company a growing supply-side advantage which we believe should translate into further market share gains going forward.
Taken together, we believe these concurrent demand and supply shocks should enable Accenture to sustainably accelerate its growth algorithm going forward. We expect revenue growth to accelerate from high single-digit historical levels to mid-teens in the coming years, while free cashflow per share growth accelerates from low-teens to roughly 20% or better. Accenture’s recent guidance for a material acceleration in fiscal year 2022 is the first evidence of this dynamic unfolding. We expect elevated growth to persist for years to come, and are excited to be long-term owners of the stock.”
1. Sea Limited (NYSE:SE)
Number of Hedge Fund Holders: 111
Sea Limited (NYSE:SE) was one of the oldest stock holdings in billionaire Steve Cohen’s portfolio, as the firm first bought a stake in the tech-focused conglomerate in 2018. It dumped its entire SE position in the December quarter of 2021. The company’s shares were among the best performers over the past two years, however, they’ve plunged by more than 50% year-to-date due to investors’ move towards value stocks.
In its fourth quarter investor letter, investment management firm Hayden Capital mentioned a few stocks, including Sea Limited. Here is what Hayden Capital stated:
“Sea Ltd represents a substantial portion of our portfolio, and this last market downturn has certainly been painful for shareholders. While I’d estimate (or rather guess?) that ~2/3rd of the stock price decline is due to concerns around the aforementioned rising rate environment hurting most long-duration growth companies, approximately ~1/3rd of the stock decline is likely due to investor’s concerns around Sea Ltd transitioning from “Act 1” to “Act 2”, which I’ll discuss in this section.
Previously, Sea has relied upon the exponential growth of its gaming business, Garena, and in particular that of the worldwide mobile game sensation, Free Fire, to provide the profits to reinvest into the Shopee ecommerce division within Southeast Asia. Between 2018 and 2021, profits from Garena grew over 10x, all of which was reinvested into building out the Shopee ecommerce platform.
This strategy has been tremendously successful, with Shopee now on track to achieve ~$100 Billion in GMV in 2022, making it one of the largest ecommerce companies in the world. More importantly, these new-to-ecommerce customers are extremely sticky (ordering more than 4x per month, logging in several times per day, and spending 30 – 60 minutes inside of the app per day).
This isn’t simply “renting customers” via deeply discounted promo codes. But rather, Shopee has trained a whole new segment of the population to shop online via their addictive & engaging platform. Nowadays, Shopee is definitively the dominant ecommerce leader in Southeast Asia (~55 – 60% market share), and the company feels that it is in a much more stable position versus just a few years ago…” (Click here to see the full text)
You can also take a look at the Billionaire Ken Griffin Is Loading Up on These 10 Stocks and 10 Best Pharmaceutical Stocks to Buy in 2022.
