In this article, we discuss the 10 stocks Stanley Druckenmiller is dumping. If you want to skip our detailed analysis of these stocks, go directly to Stanley Druckenmiller is Dumping These 5 Stocks.
Stanley Druckenmiller is presently placed on the 231st position on the Bloomberg Billionaires Index, a list of 500 most wealthy individuals in the world maintained by business news publication Bloomberg. The net worth of the Wall Street stalwart, who manages over $3.4 billion in assets at Duquesne Capital, stands at more than $10.4 billion. The top holdings of his hedge fund, one of the most successful in the world but closed for outside investors, are concentrated in the technology sector.
Some of the top stocks in the investment portfolio of Duquesne Capital at the end of the second quarter of 2021 were Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), and Alphabet Inc. (NASDAQ: GOOG), among others. The top five holdings of the fund comprise over 40% of the entire portfolio. The top ten comprise just below 60% of the portfolio. In the past quarter, the fund made new purchases in 16 stocks, additional purchases in 10 stocks, and sold off 28 stocks. Some of these are discussed in detail below.
Despite this flurry of activity, the portfolio value of the fund has decreased by about $400 million between March and June this year. Druckenmiller, who made over $1 billion in 1992 by shorting the British pound along with George Soros, has never had a losing year on record. The top five most valuable holdings he sold during the second quarter accounted for close to 11% of the portfolio during the first quarter. Over the years, the success of Druckenmiller has been an exception in the world of finance that is broadly struggling.
The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, 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 124 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 115 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.
Our Methodology
With this context in mind, here is our list of the 10 stocks Stanley Druckenmiller is dumping. These were ranked according to the investment portfolio of Duquesne Capital at the end of the second quarter of 2021.
Only those stocks were selected that the hedge fund sold off entirely in the second quarter of 2021. The analyst ratings of each company are also discussed to provide readers with some more context about their investment decisions.
The hedge fund sentiment around each stock was gauged using the data of 873 hedge funds tracked by Insider Monkey. The stocks are arranged according to the number of hedge fund holders in each company.
Stanley Druckenmiller is Dumping These Stocks
10. First Horizon Corporation (NYSE: FHN)
Number of Hedge Fund Holders: 27
First Horizon Corporation (NYSE: FHN) is placed tenth on our list of 10 stocks Stanley Druckenmiller is dumping. The firm operates as a bank holding company and is headquartered in Tennessee. The fund first owned a stake in the company in the first quarter of 2021. It sold off the entire stake in the second quarter of 2021. The fund paid an estimated average price of $16.91 per share for the holding. At the end of June, the shares were trading at $17.28.
In earnings results for the second quarter, posted on July 16, First Horizon Corporation (NYSE: FHN) reported earnings per share of $0.58, beating market estimates by $0.14. The revenue over the period was $781 million, up 52% year-on-year.
At the end of the second quarter of 2021, 27 hedge funds in the database of Insider Monkey held stakes worth $151 million in First Horizon Corporation (NYSE: FHN), the same as in the preceding quarter worth $312 million.
Unlike Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), and Alphabet Inc. (NASDAQ: GOOG), First Horizon Corporation (NYSE: FHN) is one of the stocks Stanley Druckenmiller is dumping.
9. Cloudflare, Inc. (NYSE: NET)
Number of Hedge Fund Holders: 43
Cloudflare, Inc. (NYSE: NET) is ranked ninth on our list of 10 stocks Stanley Druckenmiller is dumping. The company owns and operates a cloud platform that markets network services to businesses. It is headquartered in California. According to 13F filings, the fund first owned a stake in the cloud company in the third quarter of 2021. It sold off the entire stake in the second quarter of 2021. The fund paid an estimated average price of $64.66 per share for the holding. At the end of June, the shares were trading at $105.84.
On August 10, investment advisory Argus reiterated a Buy rating on Cloudflare, Inc. (NYSE: NET) stock and raised the price target to $140 from $125, highlighting that the firm was offering a unique set of services.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Cloudflare, Inc. (NYSE: NET) with 57 million shares worth more than $165 million.
Unlike Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), and Alphabet Inc. (NASDAQ: GOOG), Cloudflare, Inc. (NYSE: NET) is one of the stocks Stanley Druckenmiller is dumping.
In its Q4 2020 investor letter, Alger Mid Cap Focus Fund, an asset management firm, highlighted a few stocks and Cloudflare, Inc. (NYSE: NET) was one of them. Here is what the fund said:
“Cloudflare. Inc. provides a broad range of network services to businesses of all sizes across the world. Cloudflare’s intelligent global network spans more than 200 cities in over 100 countries. It offers network security, performance and reliability to a growing portion of global web traffic. Today. over 15% of global internet requests go through Cloudflare. Cloudflare’s serverless network design allows this global network to be a key component layer as new developments for edge cornputing. 5G and Internet of Things increase the importance of secure. reliable edge networks. Cloudflare stock outperformed in the fourth quarter following the announcement of Cloudflare One, a cloud-bas. network-as-a-service platform designed to replace the traditional enterprise network infrastructure. The Cloudflare One solution merges existing Cloudflare access and security solutions along with new enterprise-specific features into a unified Zero Trust network that can be managed through a single “pane of glass.” or display screen. With the rapid shift to remote work caused by the pandemic, this product increases Cloudflare’s potential for winning business from enterprise customers seeking to adapt to this new business environment.
While Cloudflare One adoption is still early. Cloudflare has already started to demonstrate an improved ability to sell to large customers. When discussing its third quarter results. Cloudflare said that it is continuing to sign up larger enterprise customers. including its first client to generate more than $10 million in annual recurring revenue. Cloudflare has just started to better monetize its more than 100.000 paying customer base. which along with continued product innovation, gives the company strong growth potential.”
8. Barrick Gold Corporation (NYSE: GOLD)
Number of Hedge Fund Holders: 47
Barrick Gold Corporation (NYSE: GOLD) is a Canada-based mining company. It is placed eighth on our list of 10 stocks Stanley Druckenmiller is dumping. The fund sold off its entire stake in the mining company between March and June this year.
On August 23, investment advisory National Bank maintained an Outperform rating on Barrick Gold Corporation (NYSE: GOLD) stock but lowered the price target to C$37 from C$38. Mike Parkin, an analyst at the firm, issued the ratings update.
At the end of the second quarter of 2021, 47 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Barrick Gold Corporation (NYSE: GOLD), down from 49 the preceding quarter worth $1.3 billion.
Unlike Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), and Alphabet Inc. (NASDAQ: GOOG), Barrick Gold Corporation (NYSE: GOLD) is one of the stocks Stanley Druckenmiller is dumping.
In its Q4 2020 investor letter, GoodHaven Capital Management, an asset management firm, highlighted a few stocks and Barrick Gold Corporation (NYSE: GOLD) was one of them. Here is what the fund said:
“Barrick’s recent results have been consistent with our expectations. Barrick has begun inching up the dividend as planned, which should continue increasing absent them finding a large acquisition (they want more copper assets) or a materially lower price of gold. We’d also expect periodic special dividends during stronger gold price environments. At current gold prices we estimate normalized free cash flow at Barrick of over $1.60/share. The company is now about net-debt free. We see plenty of upside and absent a collapse in gold not too much downside. Missing from much of the public discussions about gold, but potentially interesting, is the supply/demand backdrop. As the Wall Street Journal (8/16/20) recently said “gold is amongst the rarest metals in the earth’s crust and much of the easier to get to ore has already been mined. What is left is harder to find and more expensive to extract…” According to the World Platinum Council, it was forecasted that there will be a supply and demand imbalance of 1.2 million ounces globally. The potential macro tailwinds that could add value to an alternate currency like gold including currency concerns, excessive debt and continuing negative real interest rates are still out there. While the shares performed well for the year they were weak in the second half and now stand more attractively priced.”
7. Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM)
Number of Hedge Fund Holders: 64
Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) is a Taiwan-based firm that makes and sells semiconductors. It is ranked seventh on our list of 10 stocks Stanley Druckenmiller is dumping. According to mandatory filings, the fund first owned a stake in the firm in the first quarter of 2021. It sold off that stake in the second quarter. The fund paid an estimated average price of $118.28 per share for the holding. At the end of June, the shares were trading at $120.16.
On June 30, investment advisory Susquehanna upgraded Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) stock to Neutral from Negative and raised the price target to $105 from $85, underlining that the firm was benefiting from increased revenue diversification.
At the end of the second quarter of 2021, 64 hedge funds in the database of Insider Monkey held stakes worth $10.6 billion in Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM), down from 76 in the preceding quarter worth $10.8 billion.
Unlike Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), and Alphabet Inc. (NASDAQ: GOOG), Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) is one of the stocks Stanley Druckenmiller is dumping.
In its Q1 2021 investor letter, Bonsai Partners, an asset management firm, highlighted a few stocks and Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) was one of them. Here is what the fund said:
“Taiwan Semiconductor is the world’s largest outsourced foundry of logic semiconductor chips. TSMC’s shares appreciated 8.9% during the quarter.
Similar to last quarter, the supply-demand imbalance in semiconductor chips continues to benefit TSMC. To fuel new technological advances and meet the current supply imbalance, we see significantly increased capital spending across the industry over the coming years.
TSMC has an extraordinary track record of return on these large investments despite their rapid historical cadence of expansion. I remain hopeful that the large capital expenditure plan they now have ($100 billion of investment over the next three years) will be money well spent and not lead to industry oversupply in the medium term. Hopefully, future returns on these investments will look as good as those of the past.”
6. JD.com, Inc. (NASDAQ: JD)
Number of Hedge Fund Holders: 76
JD.com, Inc. (NASDAQ: JD) is placed sixth on our list of 10 stocks Stanley Druckenmiller is dumping. The company operates as a retail infrastructure provider and operates an online ecommerce marketplace with headquarters in China. Latest filings show that Duquesne Capital, which sold off its entire stake in the company during the second quarter, first owned a stake in the firm in the second quarter of 2019. The firm paid an estimated average price of $52.64 per share on the stake it built. At the end of June, the shares were being sold at $79.81.
On July 23, investment advisory Mizuho maintained a Buy rating on JD.com, Inc. (NASDAQ: JD) stock but lowered the price target to $85 from $95, underlining that regulation pressures in China would have a limited impact on the company.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Tiger Global Management LLC is a leading shareholder in JD.com, Inc. (NASDAQ: JD) with 51.5 million shares worth more than $4.1 billion.
Unlike Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), and Alphabet Inc. (NASDAQ: GOOG), JD.com, Inc. (NASDAQ: JD) is one of the stocks Stanley Druckenmiller is dumping.
In its Q1 2021 investor letter, Arisaig Partners, an asset management firm, highlighted a few stocks and JD.com, Inc. (NASDAQ: JD) was one of them. Here is what the fund said:
“Our largest holding as a firm, JD.com, we expect to grow earnings at an annualised rate of 30% over the next five years, implying it will trade on an EV / EBITDA of 7.5x at the end of this period. Is this a growth stock or a value stock? Does anyone care? Do these labels really matter?
For the Asia Fund, with a higher pre-existing allocation to our core FMCG holdings coming into the year, we took advantage of capital market volatility to further concentrate on our highest conviction names. JD.com has been the main destination for our limited reallocations as evidence continues to emerge supporting our thesis that the company has a strong right-to-win in the large and highly fragmented USD1.8th Chinese grocery market. We have also been encouraged by the fact that after years of persistence, the company is beginning to engage with us on ESG issues (we have specifically discussed data protection, climate change and the circular economy). ESG is now being considered at the board level, and specific sustainability reporting should follow in the coming months. Having long displayed a healthy obsession with customer service, we interpret these latest conversations as a sign that JD is beginning to develop a more sophisticated understanding of its impact on all stakeholders.”
To see the rest of the stocks on this list click Stanley Druckenmiller is Dumping These 5 Stocks.
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Disclosure. None. Stanley Druckenmiller is Dumping These 10 Stocks is originally published on Insider Monkey.
