In this article we take a look at the 10 stocks billionaire Jeffrey Talpins sold in the second quarter of 2022 and analyze the performance of each stock over the past six months as of November 19. If you want to skip this part and see the top 5 stocks in this list, go to Was Billionaire Jeffrey Talpins Right About These 5 Stocks?
We prepared the actual contents of this article a few months ago when we analyzed the Q2 portfolio of billionaire Jeffrey Talpins to pick the most important stocks he sold during the period. We are publishing this article today because it’s always interesting for the readers to analyze how good the so-called “smart money” is when it comes to stock picking. When we look at the stock picks/sells of hedge funds in hindsight, we can better analyze their performance and see whether they were right or wrong.
In this article you will see the stocks billionaire Jeffrey Talpins sold off during the second quarter of 2022. For year stock we have mentioned its performance over the past six months as of November 19.
At the time of writing we had mentioned analyst ratings for these stocks from famous Wall Street analysts. It’d be interesting for our readers to see how right or wrong were these analysts’ price targets and calls.
So, was Jeffrey Talpins right in selling in these stocks? Let’s find out in this article. But first, our brief primer on Jeffrey Talpins and his hedge fund.
Jeffrey Talpins is the CEO, Chief Investment Officer, and Founder of Element Capital Management. The renowned and successful fund manager provides strategic direction for Element Capital. He also makes investment decisions for the investment funds managed by Element Capital.
Before launching Element Capital Fund in 2005, Mr. Jeffrey Talpins was head trader of Citigroup’s fixed income options franchise. Prior to working for Citigroup, he started his career at Goldman Sachs where he was responsible for trading agency mortgage options and pass-through securities.
As at the end of the second quarter of 2022, the fund’s portfolio value came in at $199 million. This was an improvement of 1% from the preceding quarter. Its top 10 holdings make up around 40.31% of the total investment portfolio. Element Capital Management was able to return around 12% returns in 2019. Billionaire Jeffrey Talpins’ fund saw a busy 2019 after delivering 17% returns in 2018. At the beginning of 2020, the firm increased performance fees to 40%.
Jeffrey Talpins of Element Capital
10. Union Pacific Corporation (NYSE:UNP)
No. of Hedge Fund Holders: 65
Performance of UNP Over the Past Six Months: -1.40%
Union Pacific Corporation (NYSE:UNP) is the largest public railroad in North America. Union Pacific Railroad is its principal operating company and is North America’s premier railroad franchise which covers 23 states across the western two-thirds of the US.
At the end of the second quarter of 2022, 65 elite funds held Union Pacific Corporation (NYSE:UNP) against 89 hedge funds in the preceding quarter.
In a research report published on September 30, Barclays analyst Brandon Oglenski reduced the price target on Union Pacific Corporation (NYSE:UNP) to $235 from $255. The analyst keeps an “Overweight” rating. According to the analyst, railroad margins can see pressure from labor agreements and softer volume outcomes, resulting in a “less robust” earnings forecast for 2023.
Carillon Tower Advisers, an investment management firm, published its first quarter of 2022 investor letter and mentioned Union Pacific Corporation (NYSE:UNP). Here is what the fund said:
“Union Pacific (NYSE:UNP) benefited from rising oil prices, which typically bring more demand for rail shipping as opposed to moving freight by truck. Rail transportation can be much more fuel-efficient than over-the-road trucking.”
9. Talos Energy Inc. (NYSE:TALO)
No. of Hedge Fund Holders: 21
Performance of TALO Over the Past Six Months: +3.67%
Talos Energy Inc. (NYSE:TALO) is an independent oil and gas company that is principally involved in offshore exploration and production. It has operations in the United States, Gulf of Mexico, and offshore Mexico.
After deferral of the planned dry-dock maintenance process into Q3 2022, the company has started mobilizing HP-1 vessel to shore for regulatory-required maintenance. Talos Energy Inc. (NYSE:TALO) is expecting dry-dock to result in 6.0 – 9.0 MBoe/d of deferred production and incremental operating and capital costs in Q3 2022.
MKM Partners initiated coverage on Talos Energy Inc. (NYSE:TALO) and restated a “Buy” rating on the shares of the company. They gave the stock a price objective of $23.00 on July 20.
Insider Monkey’s Q2 2022 survey of 895 hedge funds outlined that 21 invested in Talos Energy Inc. (NYSE:TALO) in comparison to 23 in the preceding quarter.
8. Gores Holdings VIII, Inc. (NASDAQ:GIIX)
No. of Hedge Fund Holders: N/A
Performance of GIIX Over the Past Six Months: +0.46%
Gores Holdings VIII, Inc. (NASDAQ:GIIX) is a special purpose acquisition company (SPAC) that is sponsored by an affiliate of The Gores Group, LLC, founded by Alec Gores. The company has not engaged in any operations except identifying and consummating a business combination.
Footprint, which is a global materials science technology company, and Gores Holdings VIII, Inc. (NASDAQ:GIIX) announced strategic changes to the terms of the definitive merger agreement. Recent amendments and associated incremental capital sources should help Footprint position itself for long-term growth. Gores Holdings VIII, Inc. (NASDAQ:GIIX) highlighted that Footprint’s strong progress despite current market conditions further strengthened its conviction in the company.
Spartan Fund Management Inc. bought a new stake in shares of Gores Holdings VIII, Inc. (NASDAQ:GIIX) in the first quarter of 2022. The fund purchased 45,759 shares of the company’s stock, worth approximately $569,000.
7. Emerson Electric Co. (NYSE:EMR)
No. of Hedge Fund Holders: 47
Performance of EMR Over the Past Six Months: +12%
Emerson Electric Co. (NYSE:EMR) is a global leader which designs and manufactures products and delivers services that bring technology and engineering together to offer innovative solutions for customers available in a wide range of industrial, commercial, and consumer markets.
Emerson Electric Co. (NYSE:EMR) announced an agreement to sell its Russia business, including Metran, and Emerson LLC, to the local management team.
In the full year 2022, the company expects to post net sales growth of 7%- 8% and underlying sales growth of 9%- 10%. The company has increased its EPS guidance to $5.25 – $5.35 and adjusted EPS guidance to $5.05 – $5.15.
Analysts at Sanford C. Bernstein initiated coverage on Emerson Electric Co. (NYSE:EMR) and reduced the target price on the company’s stock from $105.00 to $100.00. They gave a “Market perform” rating on the stock on August 17. However, Citigroup increased its price objective on the company’s stock to $99.00 on August 15.
By the end of this year’s June quarter, 47 of the 895 hedge funds polled by Insider Monkey held stakes worth $1.25 billion in Emerson Electric Co. (NYSE:EMR).
6. Deere & Company (NYSE:DE)
No. of Hedge Fund Holders: 54
Performance of DE Over the Past Six Months: +32%
Deere & Company (NYSE:DE) is the world’s leading manufacturer of agricultural equipment. The company produces recognizable machines in the heavy machinery industry.
Deere & Company (NYSE:DE) announced it issued satellite communications (SATCOM)-focused request for proposals to secure cutting-edge solutions that should further connect fleet of intelligent machines. The company posted its third quarter of 2022 results, reporting a net income of $1.884 billion against $1.667 billion in the third quarter of 2021.
Deere & Company (NYSE:DE) has revised its full-year earnings outlook to $7.0 billion – $7.2 billion. In 2023, the company expects strong order books and positive customer fundamentals to stem solid demand.
At the end of the second quarter of 2022, Insider Monkey’s 895 hedge fund survey revealed that 54 hedge funds were invested in the firm. Evercore ISI covered Deere & Company (NYSE:DE) on August 22 and increased the price objective on the stock from $416.00 to $439.00.
CAO Marc A. Howze sold 4,019 shares of Deere & Company (NYSE:DE) on September 9. This transaction was done at an average price of $373.22, for a total value of $1,499,971.18.
LRT Capital Management, an investment management firm, released its July month 2022 investor letter and mentioned Deere & Company (NYSE:DE). Here is what the fund said:
“Deere & Company (NYSE:DE) manufactures machines and equipment, which help the agriculture and construction industries. The company’s production and precision agriculture segment manufacture global equipment and technology solutions for production-scale growers of large grains, small grains, cotton, and sugar. The small agriculture and turf segment develops equipment for dairy and livestock producers, crop producers, and turf and utility customers. Finally, the construction and forestry segment make a range of machines for the earthmoving, forestry, and roadbuilding production systems.
The company is the leader in farming and agricultural equipment and competes with the likes of CNH Industrial and Kubota Corporation. Deere has generated returns on equity of over 20%, and in many years well above 30%, for more than two decades. How is this possible when the company’s end markets are so cyclical?
Deere sells an “ongoing relationship” to farmers, as every piece of equipment purchased leads to a steady supply of future parts and related services. The true source of Deere’s competitive advantage is the company’s dealership network, and its ability and willingness to finance the purchase of its equipment for farmers. The unique nature of its distribution system and the credit decisions that are made at the distributor level have created a structure that has allowed the company to keep credit losses to astonishingly low levels.”
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Disclosure: None. Was Billionaire Jeffrey Talpins Right About These 10 Stocks? is originally published on Insider Monkey.
