In this article, we discuss 5 stocks that Cliff Asness is selling. If you want our detailed analysis of Asness’ history, hedge fund performance, and investment philosophy, go directly to Cliff Asness Is Selling These 10 Stocks.
5. The Cheesecake Factory Incorporated (NASDAQ:CAKE)
Number of Hedge Fund Holders: 20
Cliff Asness discarded its stake in The Cheesecake Factory Incorporated (NASDAQ:CAKE), an American restaurant company, in the fourth quarter of 2021, selling 26,809 shares that were owned as of Q3 2021. Cliff Asness first purchased shares of The Cheesecake Factory Incorporated (NASDAQ:CAKE) back in Q4 2010.
On January 5, Stephens analyst James Rutherford upgraded The Cheesecake Factory Incorporated (NASDAQ:CAKE) to Overweight from Equal Weight, with a price target of $47, down from $53. The analyst reasoned that the stock’s “ongoing underperformance” and its ability to exceed 2019 unit volumes with the help of a strong off-premise business were why he upgraded The Cheesecake Factory Incorporated (NASDAQ:CAKE). The analyst further noted that the company can retain these sales in 2022.
Castle Hook Partners held the biggest stake in The Cheesecake Factory Incorporated (NASDAQ:CAKE) in the third quarter of 2021, with 639,373 shares worth $30 million. Overall, 20 hedge funds were bullish on The Cheesecake Factory Incorporated (NASDAQ:CAKE), down from 26 funds in the preceding quarter.
Here is what Baron Small Cap Fund has to say about The Cheesecake Factory Incorporated (NASDAQ:CAKE) in its Q1 2021 investor letter:
“Shares of The Cheesecake Factory, Inc., the operator of casual dining restaurants, were up significantly in the first quarter, as their dining rooms reopened, and business recovered from the depths caused by COVID restrictions. We believe that the company weathered the downturn very well and emerged a stronger, more profitable entity, with an improved outlook. Off Premise sales were robust during the shutdown, and we believe that a good portion of those sales will be retained, so that each restaurant will do more revenue than before. We expect about 15% of restaurants in the casual dining space will be shuttered forever, which will help Cheesecake’s volumes and already strong competitive position. And we are excited about the opportunity for it to grow units, especially in the North Italia and Fox brands, which the company acquired prior to COVID. However, with the stock quadrupling off the bottom and back to its highs of five years ago, and trading at a good multiple of our expectation of near-term earnings, we sold about a third of our position into strength.”
4. Lyft, Inc. (NASDAQ:LYFT)
Number of Hedge Fund Holders: 33
Lyft, Inc. (NASDAQ:LYFT) is a California-based company that offers vehicles for hire, rental cars, and food delivery services across the United States and Canada. In Q4 2020, Cliff Asness purchased shares of Lyft, Inc. (NASDAQ:LYFT), and by Q3 2021, his hedge fund held 14,550 Lyft, Inc. (NASDAQ:LYFT) shares, worth $765,000. He sold the entirety of his position in the company in Q4 2021.
On February 8, Lyft, Inc. (NASDAQ:LYFT) reported earnings for Q4 2021. The company posted an EPS of $0.10, beating estimates by $0.01. Revenue for the period jumped 70.19% year-on-year to approximately $970 million, surpassing estimates by $29.05 million.
RBC Capital analyst Brad Erickson on February 9 lowered the price target on Lyft, Inc. (NASDAQ:LYFT) to $53 from $65 but kept an Outperform rating on the shares. The Q4 miss in active riders and below-consensus guidance may embolden bears, but the likely strong post-pandemic travel recovery would seem to carry a positive risk/reward on the stock, the analyst told investors in a research note.
Among the hedge funds tracked by Insider Monkey in Q3 2021, 33 funds were bullish on Lyft, Inc. (NASDAQ:LYFT), down from 43 funds in the prior quarter. Alkeon Capital Management held the biggest stake in Lyft, Inc. (NASDAQ:LYFT) as of September 2021, with 4.72 million shares worth $253.2 million.
Here is what ClearBridge Investments has to say about Lyft, Inc. (NASDAQ:LYFT) in its Q2 2021 investor letter:
“We also added to our disruptors’ exposure in the second quarter with the purchase of Lyft, a leading, U.S. focused ride-hailing business. Lyft operates in a rational duopoly with Uber and has been able to maintain consistent 30%–35% market share for the past several years. The company should be a key beneficiary of the U.S. reopening, with a post-COVID-19 recovery in rideshare demand driving an acceleration in volumes and revenue. We also see considerable runway for growth beyond this rebound, as rideshare remains underpenetrated. Lyft’s ability to weather a period of significant demand destruction in 2020 is encouraging and we see opportunity for margin expansion ahead. Despite volatility created by ongoing labor negotiations, we see the potential for new, state-level legislation creating collective bargaining rights for gig economy workers to provide greater certainty around industry labor costs, with increases that should be manageable.”
3. Coupa Software Incorporated (NASDAQ:COUP)
Number of Hedge Fund Holders: 52
Based in California, Coupa Software Incorporated (NASDAQ:COUP) is a global technology company offering a platform to assist customers with business spend management. Initially investing in Coupa Software Incorporated (NASDAQ:COUP) back in Q2 2018, Cliff Asness held 5,379 shares of the company in the third quarter of 2021, worth $1.17 million, which he disposed of completely in Q4 2021.
BMO Capital analyst Daniel Jester initiated coverage of Coupa Software Incorporated (NASDAQ:COUP) on January 31 with a Market Perform rating and a $135 price target. According to the analyst, Coupa Software Incorporated (NASDAQ:COUP)’s growth has slowed over the past year, which he attributes to some solutions falling lower on the digital transformation priority list as workers shifted to hybrid work environments with “little to no” corporate travel. While the analyst believes this dynamic will shift, he thinks the tactical set-up into Q4 results “still looks difficult”.
Stephen Mandel’s Lone Pine Capital held the largest stake in Coupa Software Incorporated (NASDAQ:COUP) as of Q3 2021, with 4.5 million shares worth over $1 billion. Overall, 52 hedge funds monitored by Insider Monkey were bullish on Coupa Software Incorporated (NASDAQ:COUP), with stakes amounting to $4.5 billion.
Here is what ClearBridge Investments has to say about Coupa Software Incorporated (NASDAQ:COUP) in its Q2 2021 investor letter:
“Within IT, we added positions in Coupa Software, a leader in the fast growing Business Spend Management market with opportunity to double its total addressable market by harnessing B2B payments with its Coupa Pay product; and AppLovin, a leading mobile gaming advertising network in a unique position to utilize its ad expertise to grow its own mobile game business at low user acquisition costs.”
2. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 62
Datadog, Inc. (NASDAQ:DDOG) is a New York-based company offering a SaaS-based data analytics platform. Cliff Asness’ AQR Capital Management purchased shares of Datadog, Inc. (NASDAQ:DDOG) in Q4 2020, and by the third quarter of 2021, the hedge fund owned 7,605 Datadog, Inc. (NASDAQ:DDOG) shares, worth over $1 million. Cliff Asness discarded his position in the company in Q4 2021.
Publishing its Q4 results on February 10, Datadog, Inc. (NASDAQ:DDOG) reported earnings per share of $0.20, beating estimates by $0.09. The $326.20 million revenue gained 83.74% year-on-year, exceeding estimates by $34.75 million.
Truist analyst Joel Fishbein on February 11 raised the price target on Datadog, Inc. (NASDAQ:DDOG) to $225 from $200 and kept a Buy rating on the shares. The company delivered “another strong beat and raise” in Q4 and growth is accelerating via both core and new products across all geographies, the analyst told investors in a bullish note.
A total of 62 hedge funds were bullish on Datadog, Inc. (NASDAQ:DDOG) in Q3 2021, and Tiger Global Management held the largest stake in the company, with 5.2 million shares worth $740.7 million.
Here is what ClearBridge Mid Cap Growth Strategy has to say about Datadog, Inc. (NASDAQ:DDOG) in its Q3 2021 investor letter:
“The ClearBridge Mid Cap Growth Strategy delivered positive absolute performance and outperformed the benchmark in the third quarter, with the primary differentiator being stock selection among our IT holdings. The tech names in the portfolio gained 10.1% for the quarter compared to a 2.2% gain for tech in the benchmark. Most of the heavy lifting was done by enterprise software holdings that are helping businesses analyze activity and execute more efficiently, such as Datadog. The leading contributors to absolute returns during the third quarter included Datadog.”
1. Peloton Interactive, Inc. (NASDAQ:PTON)
Number of Hedge Fund Holders: 62
Peloton Interactive, Inc. (NASDAQ:PTON) markets fitness equipment and subscription-based online exercise classes to users across North America and worldwide. Cliff Asness purchased a stake in Peloton Interactive, Inc. (NASDAQ:PTON) in Q4 2020, and over time, he gradually reduced his position in the company before selling off the 11,939 shares he held as of Q3 2021 in the fourth quarter of 2021.
On February 8, Peloton Interactive, Inc. (NASDAQ:PTON) reported its Q4 results, posting a loss per share of $1.22, missing estimates by $0.30. The $1.13 billion revenue missed market consensus by $17.35 million.
MKM Partners analyst Rohit Kulkarni raised the price target on Peloton Interactive, Inc. (NASDAQ:PTON) to $35 from $30 but kept a Neutral rating on the shares on February 10, citing the company’s Q4 results, updated outlook, and announced management changes as reasons for the lifted price target.
At the end of the third quarter of 2021, D1 Capital Partners was a prominent Peloton Interactive, Inc. (NASDAQ:PTON) stakeholder, with more than 6.8 million shares worth $599 million. Overall, 62 hedge funds were bullish on the stock in Q3 2021.
Here is what Miller Value Partners Opportunity Equity has to say about Peloton Interactive, Inc. (NASDAQ:PTON) in its Q4 2021 investor letter:
“Money losing growth stocks posted the biggest losses late in the year. Jim Cramer termed this behavior getting “pelotoned,” as Peloton is the poster child for what we experienced. At recent prices ($31.33 as of close 1/14/22), Peloton is more than 80% off its highs. It’s reversed nearly all its pandemic gains, trading at levels close to the IPO price ($29).
We previously owned Peloton, so we know the company well. We bought Peloton after the IPO based on our belief it was a misunderstood consumer brand pegged as a faddish hardware company.
It benefited enormously from the pandemic as demand surged and customer acquisition costs plummeted. We expected these dynamics to reverse as the environment normalized from stay-at-home. We sold in late 2020 because we thought it was fully valued around $100. Growing risks created a poor risk/reward.
At current prices, it’s interesting once again and we’ve resumed work on it. Market sentiment towards money losers remains quite negative. Peloton’s prospects, like others, ultimately depend on its ability to drive free cash flow over the long term. We reference Peloton because it’s an extreme example of behavior we’ve seen more broadly.”
You can also take a look at 10 Best Dividend Stocks to Buy According to Cliff Asness’ AQR Capital Management and Warren Buffett’s Performance in 2021: 10 Best Stock Picks.
