In this article, we discuss the 5 stocks Warren Buffett is selling. If you want to read our detailed analysis of these stocks, go directly to Warren Buffett Is Selling These 10 Stocks.
5. Marsh & McLennan Companies, Inc. (NYSE: MMC)
Number of Hedge Fund Holders: 41
Percentage Decline in Stake in Q2: 21%
Marsh & McLennan Companies, Inc. (NYSE: MMC) is ranked fifth on our list of 10 stocks Warren Buffett is selling. The firm markets professional services and operates from New York. Regulatory filings reveal that Berkshire Hathaway owned over 4 million shares in the firm at the end of the second quarter of 2021, representing 0.2% of the portfolio. The shares are valued more than $590 million. The firm has decreased stake in the company by 21% compared to the first quarter of the year.
On August 16, investment advisory Wolfe Research initiated coverage of Marsh & McLennan Companies, Inc. (NYSE: MMC) stock with an Outperform rating and a price target of $171, citing that the firm could grow based on new hires.
Out of the hedge funds being tracked by Insider Monkey, Ohio-based investment firm Diamond Hill Capital is a leading shareholder in Marsh & McLennan Companies, Inc. (NYSE: MMC) with 2.2 million shares worth more than $315 million.
4. Merck & Co., Inc. (NYSE: MRK)
Number of Hedge Fund Holders: 79
Percentage Decline in Stake in Q2: 49%
Merck & Co., Inc. (NYSE: MRK) is a New Jersey-based healthcare firm. It is placed fourth on our list of 10 stocks Warren Buffett is selling. According to the latest data, Berkshire Hathaway owned more than 9 million shares in the firm at the end of the second quarter of 2021, representing 0.24% of the portfolio. The shares are valued at more than $712 million. The Buffett-led firm has trimmed stake in the healthcare company by 49% compared to the first quarter of 2021.
On July 26, investment advisory Truist assumed coverage of Merck & Co., Inc. (NYSE: MRK) stock with a Buy rating and a price target of $92, underlining that the stock could trade at 15-times expected earnings per share in 2022.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Merck & Co., Inc. (NYSE: MRK) with 10.3 million shares worth more than $802 million.
In its Q1 2021 investor letter, Artisan Partners highlighted a few stocks and Merck & Co., Inc. (NYSE: MRK) was one of them. Here is what the fund said:
“In Q1, we initiated a position in Merck, a provider of health care solutions including prescription medicines, vaccines, biologic therapies, animal health and consumer care products. We purchased Merck when the stock came under pressure in part on concerns that the newly minted Biden administration could implement regulatory changes and lower drug costs in the pharmaceutical industry. Recent, but anticipated changes to Merck’s management team have also weighed on shares, as have concerns over the company’s heavy reliance on immunotherapy treatment Keytruda. Notably, Merck is not getting much credit from investors for the 60+ programs it has in clinical development, despite having several solid and large new product opportunities. Additionally, the company’s strong balance sheet and robust free cash flow provide it multiple options for future partnerships and acquisitions. While Merck is undergoing a period of transition, we think the company’s fundamentals are strong and believe changes to management should be a catalyst for improvement.”
3. Axalta Coating Systems Ltd. (NYSE: AXTA)
Number of Hedge Fund Holders: 47
Percentage Decline in Stake in Q2: 100%
Axalta Coating Systems Ltd. (NYSE: AXTA) is a Pennsylvania-based firm that makes and sells coating systems. It is ranked third on our list of 10 stocks Warren Buffett is selling. Latest filings reveal that Berkshire Hathaway has sold off its entire stake in the company during the second quarter.
On July 28, investment advisory Citi kept a Buy rating on Axalta Coating Systems Ltd. (NYSE: AXTA) stock and raised the price target to $39 from $37, appreciating the solid quarterly results posted by the company.
At the end of the second quarter of 2021, 47 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Axalta Coating Systems Ltd. (NYSE: AXTA), up from 43 in the previous quarter worth $1.5 billion.
In its Q1 2021 investor letter, Ariel Investments highlighted a few stocks and Axalta Coating Systems Ltd. (NYSE: AXTA) was one of them. Here is what the fund said:
“While we did not exit any holdings during the quarter in Ariel Fund, we initiated a position in Axalta Coating Systems, Ltd. (AXTA) which is emerging from the shadow of its former parent, DuPont. We expect Axalta—a leading manufacturer of coatings for cars and trucks—to continue to gain market share from ongoing consolidation in its refinishing business and further margin improvement through cost savings programs.”
2. Biogen Inc. (NASDAQ: BIIB)
Number of Hedge Fund Holders: 67
Percentage Decline in Stake in Q2: 100%
Biogen Inc. (NASDAQ: BIIB) is placed second on our list of 10 stocks Warren Buffett is selling. The company operates from Cambridge as a biotechnology firm. According to the latest data, Berkshire Hathaway sold off its entire stake in the company between March and June this year.
On August 2, investment advisory Mizuho maintained a Neutral rating on Biogen Inc. (NASDAQ: BIIB) stock and raised the price target to $300 from $244. Salim Syed, an analyst at the firm, issued the ratings update.
At the end of the second quarter of 2021, 67 hedge funds in the database of Insider Monkey held stakes worth $3.1 billion in Biogen Inc. (NASDAQ: BIIB), up from 63 in the preceding quarter worth $1.4 billion.
In its Q2 2021 investor letter, Longleaf Partners Fund highlighted a few stocks and Biogen Inc. (NASDAQ: BIIB) was one of them. Here is what the fund said:
“Biogen (52%, 1.24%), a biotechnology company specializing in therapies for the treatment of neurological diseases, contributed in a way that warrants a longer than usual writeup. When we first began buying the company in early January, the stock scored well on all three Business, People and Price criteria, but the range of outcomes was wider than most investments for us. On the business, while the company has had a leading position in neuroscience for decades, it had become a collection of assets that was hard for the stock market to value. This led to most short-term investors focusing on year-over-year (YOY) earnings declines in 2021 and pipeline uncertainty. We focused most on strong cash flows from Biogen’s Multiple Sclerosis franchise, a growing yet hidden biosimilars business, and a pipeline that we believed was actually quite interesting and diversified beyond the manic market focus on Aducanumab, a proposed treatment for Alzheimer’s. On the people front, we also liked what the board and management had been doing (large, discounted repurchases and prudent internal and external investments) and not doing (no big, dumb M&A or unsustainable dividends). Our single point appraisal was around $375/share, but we saw a range at the low end of slightly above $250 if the pipeline totally failed or approaching $500 if the company saw a reasonable amount of pipeline success. We also thought that we were effectively paying a very low double-digit multiple of FCF/share. It is important to note that we were not betting on our science expertise or any other predictions that fall outside our circle of competence. Rather, we used our bottom-up appraisal skills to find a security that was mispriced at that given moment – we had followed the company for over 10 years before our purchase – and that shorter-term investors were afraid to own due to the potential for near-term stock price volatility. We started with a partial position, as we felt the wider-than-usual range of outcomes and uncertainty around the stock could lead to the chance to fill it out at a better price later.
On June 7, the FDA approved Aducanumab (now known as Aduhelm) after a contentious process that has yet to fully play out. The stock shot upward, and our single point value increased to $425. With the stock trading at that level, we exercised our price discipline and sold our position. In this era of “multi-decade-compounders at any price” and given SAM’s history of being long term, it feels weird to be in and out of something so quickly. But it also feels OK to be able to use our appraisal skills to secure a payoff for our long-term clients. The company’s stock price has fallen since our sale, and we will continue to watch the price-to-value (P/V) gap going forward.”
1. Liberty Global plc (NASDAQ: LBTYA)
Number of Hedge Fund Holders: 30
Percentage Decline in Stake in Q2: 100%
Liberty Global plc (NASDAQ: LBTYA) is ranked first on our list of 10 stocks Warren Buffett is selling. The company operates from London as a communication services provider. Regulatory filings show that the Buffett-led firm sold off its entire stake in the company during the second quarter of 2021.
On June 23, investment advisory JPMorgan resumed coverage of Liberty Global plc (NASDAQ: LBTYA) stock with an Overweight rating and a price target of $37, noting that there was 40% upside potential in the shares.
At the end of the second quarter of 2021, 30 hedge funds in the database of Insider Monkey held stakes worth $806 million in Liberty Global plc (NASDAQ: LBTYA), down from 35 in the preceding quarter worth 848 million.
You can also take a peek at 10 Stocks that Helped Warren Buffett Make $4.6 Billion in Dividends and 10 Best Dividend Stocks with Over 5% Yield According to Hedge Funds.
