In this article, we discuss Tesla and the 9 other stocks that Cathie Wood is selling. If you want to skip our detailed analysis of these stocks, go directly to 5 Stocks Cathie Wood is Selling.
Cathie Wood leads ARK Investment Management, a New York-based fund with a portfolio value of more than $41 billion at the end of the third quarter of 2021. Over the years, Wood has developed a reputation of investing in disruptive, high growth sectors of the industry.
Healthcare and technology are some of the main focus areas of the fund. Wood has a personal net worth of around $400 million, according to business news publication Forbes.
Wood has been in the news recently after her fund sold over a billion dollars worth of Tesla, Inc. (NASDAQ:TSLA) stock, merely a few months after the investor famously backed the share price of the electric vehicle maker to touch $3,000. Latest data shows that the portfolio value of her fund went down by about $12 billion between June and September as she sold out of 36 stocks, made additional purchases in 69, reduced holdings in 176, and made new purchases in 50 equities. The growth-focused fund has been hit by inflationary headwinds in recent weeks.
Some of the other stocks that Cathie Wood is selling include Alibaba Group Holding Limited (NYSE:BABA), Bristol-Myers Squibb Company (NYSE:BMY), and General Electric Company (NYSE:GE), among others discussed in detail below.
Our Methodology
These were picked from the investment portfolio of ARK Investment Management at the end of the third quarter of 2021. The stocks which the fund exited completely between June and September this year were preferred for the list.
The hedge fund sentiment around each stock was calculated using the data of 873 hedge funds tracked by Insider Monkey.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Cathie Wood of ARK Investment Management
Cathie Wood is Selling Tesla and Other Stocks
10. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 60
Latest filings show that the hedge fund overseen by Wood owned over 3.9 million shares of Tesla, Inc. (NASDAQ:TSLA) at the end of the third quarter of 2021 worth $3 billion, representing 7.36% of the portfolio. Although the company is still the largest holding, the fund has decreased stake in it by 28% between June and September compared to the filings for the second quarter. Reports suggest that Wood has continued to sell the stock through October and November.
In early November, news publication Business Insider reported that ARK Investment had sold over 80,000 shares of Tesla, Inc. (NASDAQ:TSLA) worth around $93 million, bringing the total value of shares sold in the past three months to almost $1.3 billion.
At the end of the second quarter of 2021, 60 hedge funds in the database of Insider Monkey held stakes worth $9 billion in Tesla, Inc. (NASDAQ:TSLA), down from 62 in the previous quarter worth $10 billion.
Just like Alibaba Group Holding Limited (NYSE:BABA), Bristol-Myers Squibb Company (NYSE:BMY), and General Electric Company (NYSE:GE), Tesla, Inc. (NASDAQ:TSLA) is one of the stocks facing the heat from an economic slowdown.
Here is what Baron Partners Fund has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q1 2021 investor letter:
“Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, energy storage solutions, and battery cells. The stock fell during the quarter as a result of general market dynamics and a potential production slowdown due to parts shortages. A refreshed S/X and China Model Y ramp could also have a negative impact on margins in early 2021. We anticipate strong growth and improved margins driven by new production capacity, manufacturing efficiencies, localization of its manufacturing and supply chain, and maturation of Tesla’s full self-driving technology.”
9. HUYA Inc. (NYSE:HUYA)
Number of Hedge Fund Holders: 11
HUYA Inc. (NYSE:HUYA) operates live streaming platforms for gamers. ARK Investment had decreased stake in the company by 72% in the second quarter compared to the filings for the first quarter of 2021, and the latest data shows that the fund has sold off the entire stake between June and September. The firm beat market estimates on earnings per share in the third quarter but missed on revenue.
HUYA Inc. (NYSE:HUYA) stock has nosedived in recent weeks after a government crackdown against dual-listed firms in China made several investors jump ship. The crackdown is still ongoing and US-based Chinese firms face further uncertainty.
At the end of the second quarter of 2021, 11 hedge funds in the database of Insider Monkey held stakes worth $89 million in HUYA Inc. (NYSE:HUYA), down from 13 in the previous quarter worth $335 million.
8. The Trade Desk, Inc. (NASDAQ:TTD)
Number of Hedge Fund Holders: 25
The Trade Desk, Inc. (NASDAQ:TTD) is a tech firm that offers a cloud-based solution to digital advertising campaign management. The stock climbed to a three-month high on November 8 after beating market estimates on earnings per share and revenue for the third quarter. Oppenheimer, DA Davidson, RBC Capital, and Stephens all raised price targets on the stock after the impressive earnings results.
The earnings report of The Trade Desk, Inc. (NASDAQ:TTD) also helped the adtech industry in general gain around 25%, the highest jump since August, as investor confidence was boosted and sympathy trading took off as well.
At the end of the second quarter of 2021, 25 hedge funds in the database of Insider Monkey held stakes worth $719 million in The Trade Desk, Inc. (NASDAQ:TTD), down from 35 in the preceding quarter worth $812 million.
In its Q2 2021 investor letter, Richie Capital Group, an asset management firm, highlighted a few stocks and The Trade Desk, Inc. (NASDAQ:TTD) was one of them. Here is what the fund said:
“The Trade Desk (TTD – up 26.3%) – Shares in the programmatic advertising specialist rebounded during the quarter after selling off in Q1. The selloff was part of the previously mentioned market move away from higher priced technology names. The rebound in Q2 was due to Google delaying its phase out of third-party cookies in its Chrome browser to mid to late 2023. This is positive news, but TTD is prepared for the inevitable transition away from cookies. The company has built an industry alternative called UID 2.0 which asks users’ permission to receive targeted ads on websites.
UID 2.0 has gained more traction in the digital ad industry vs competing alternatives with many major publishers and advertisers on board. Additionally, TTD’s business is diversified across numerous channels including video, audio, in-app, native and social. Connected TV is currently their fastest growing business, and cookies are meaningless on that platform as ads are based on first-party data.”
7. PACCAR Inc (NASDAQ:PCAR)
Number of Hedge Fund Holders: 28
PACCAR Inc (NASDAQ:PCAR) makes and sells heavy-duty commercial trucks. The company recently announced the SuperTruck 3 program, an initiative of the US Department of Energy to develop zero emissions medium-and heavy-duty trucks. Kevin Baney, the vice president of the firm, has said that the technologies developed in the earlier part of the program had later been deployed in production vehicles.
Credit Suisse analyst Jamie Cook recently upgraded PACCAR Inc (NASDAQ:PCAR) stock to Outperform from Neutral and raised the price target to $106 from $89, noting that new product rollouts for the firm would help it improve margins and gain market share in the coming months.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in PACCAR Inc (NASDAQ:PCAR) with 2 million shares worth more than $183 million.
In its Q1 2020 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and PACCAR Inc (NASDAQ:PCAR) was one of them. Here is what the fund said:
“Shares of truck manufacturer PACCAR, Inc. fell as the North American Class 8 market continued its cyclical decline, and the outlook for sales and production took another step back with the economic impact from the pandemic.”
6. LendingTree, Inc. (NASDAQ:TREE)
Number of Hedge Fund Holders: 30
LendingTree, Inc. (NASDAQ:TREE) owns and runs an online consumer platform. The company posted earnings for the third quarter in late October, posting a revenue of close to $300 million, up 35% year-on-year and beating estimates by $4.8 million. The company recently also joined the S&P Small Cap 600 Index. It has a market cap of close to $2 billion and was founded in 1996. It is headquartered in North Carolina.
Truist analyst Youssef Squali has a Buy rating on LendingTree, Inc. (NASDAQ:TREE) stock with a price target of $275. In an investor note penned in late October, the analyst said there was positive sentiment around the firm because of low valuation and growth prospects in the long and short-term.
At the end of the second quarter of 2021, 30 hedge funds in the database of Insider Monkey held stakes worth $346 million in LendingTree, Inc. (NASDAQ:TREE), up from 25 in the previous quarter worth $568 million.
In addition to Alibaba Group Holding Limited (NYSE:BABA), Bristol-Myers Squibb Company (NYSE:BMY), and General Electric Company (NYSE:GE), LendingTree, Inc. (NASDAQ:TREE) is one of the stocks that Cathie Wood is selling.
In its Q1 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and LendingTree, Inc. (NASDAQ:TREE) was one of them. Here is what the fund said:
“We also exited our position in LendingTree. LendingTree is a two-sided marketplace in the consumer financial services vertical that connects borrowers with lenders. The company has built a brand over more than 15 years that offers savings to borrowers by having banks compete. The company had been acquired by IAC before the financial crisis and then was spun out in the worst of the global financial crisis (GFC). The company had a resurgence following the GFC by adding value in the mortgage market. The company used the strong cash flow generation in the model to expand into adjacencies and diversify the revenue base. The product offering has expanded over the years mostly through acquisition and includes credit cards, personal loans, and insurance.
This diversified strategy had paid dividends amid demand shocks, like the decline in demand for mortgages 18 months ago and then the demand destruction caused by the pandemic. However, diversification has some downsides. While it protects the company from major demand destruction shocks, in our opinion, it has made it hard to drive consistent long-term compounding as products have come in and out of favor due to macro factors. While we think that LendingTree has solved a unique problem, we do not believe it has the same compounding potential going forward and have exited the position in accordance with our process.”
To see the rest of the stocks in this list click to read 5 Stocks Cathie Wood is Selling.
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Disclosure. None. Cathie Wood is Selling Tesla and 9 Other Stocks is originally published on Insider Monkey.
