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Billionaire David Tepper, founder and president of Appaloosa Management.

 

Billionaires and high-asset hedge funds have done lots of selling in 2021. Here are 25 stocks they unloaded in the first three months of the year.

The first quarter of 2021 saw America’s billionaires modify a host of their stock holdings, whether they were adding or reducing positions. And many of the wealthiest insiders have been selling stock in large quantities so far this year.

According to a mid-May report from Bloomberg, corporate insiders have been especially busy selling holdings that appreciated significantly during the COVID-19 pandemic. Insiders of U.S.-listed public companies sold $24.4 billion worth of stock in 2021 through the first week of May. This compares to the sale of $30 billion between June 2020 and December 2020.

There’s no denying investors have profited nicely during the pandemic. With inflation rearing its ugly head and President Joe Biden looking to take a financial bite out of some of America’s wealthiest, it’s accelerated the rate of selling by billionaires.

Jeff Bezos, for instance, has sold $6.7 billion in Amazon.com (AMZN) stock so far in 2021. That’s roughly two-thirds of what he sold for the entire 2020.

In some cases, asset managers are selling to take profits. In other situations, it’s more a matter of rotating assets into more appropriate investments based on the current economic environment. Bezos could be diversifying his investments outside of his large Amazon stake.

Here are 25 stocks the billionaire set sold off over the past few months. Every quarter, we look at 13F filings from institutional investors to discover not only some of the billionaire set’s favorite stock picks – but also which investment ideas they’re souring on. At least one billionaire (though in many cases, several) dumped anywhere between 20% to 100% of their holdings in the following 25 stocks.

1 of 25

Wells Fargo

A Wells Fargo bank branch

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  • Market value: $188.4 billion
  • Billionaire investor: Warren Buffett (Berkshire Hathaway)
  • Shares sold: 51,748,813 (-98%)

Warren Buffett did the unimaginable in the first quarter, selling off all but 675,054 of Berkshire’s Wells Fargo (WFC, $45.57) shares. The holding was a staple of the Berkshire Hathaway equity portfolio for years.

As recently as the end of fiscal 2019, Wells Fargo was its sixth-largest stock by market value. As a result, Berkshire owned 8.4% of the California-based bank at the time. The billionaire continued to support WFC despite all its problems with corporate culture and proper banking selling practices.

“If you look at Wells, through this whole thing they’re uncovering a whole lot of problems, but they aren’t losing any customers to speak of,” Buffett told the Financial Times in April 2019.

All good things must come to an end. On May 17, Berkshire filed its latest 13F holdings report. Buffett had reduced his stake in WFC to a $26.4 million position.

Wells Fargo isn’t the only bank stock he’s abandoned in recent quarters. In the fourth quarter, Berkshire exited positions it held in JPMorgan Chase (JPM), M&T Bank (MTB) and PNC Financial Services (PNC).

However, he remains committed to Bank of America. It is the holding company’s second-largest position behind Apple (AAPL), accounting for almost 15% of its $270-billion equity portfolio.

2 of 25

Mastercard

A Mastercard credit card

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  • Market value: $360.6 billion
  • Billionaire investor: Ruane Cuniff & Goldfarb
  • Shares sold: 456,069 (-47%)

The investment manager cut its Mastercard (MA, $363.82) position during the first quarter from 3.7% of its $10.6-billion portfolio down to 1.7%. As a result, the second-largest payments processor in the world is no longer a top 20 holding.

Ruane Cuniff first bought Mastercard stock in the second quarter of 2006. It’s done very well on its investment, paying an average price per share of just $6.67, according to WhaleWisdom.

Mastercard stock lost some of its shine in the first quarter. Its results included a 17% year-over-year decline in cross-border volumes, 600 basis points less than its larger rival, Visa (V).

According to an article in The Globe & Mail, Morningstar Senior Equity Analyst Brett Horn believes cross-border volumes are “the biggest headwind” for MA, as indicated in a note to clients. However, Mastercard CEO Michael Miebach believes that travel will improve in countries where vaccinations have been given to large segments of the population.

Overall, the payments processor had an excellent first quarter, processing 8% more transactions by dollar value than it did in Q1 2020. It had also had a per-share profit of $1.74 in the three-month period, 17 cents higher than the consensus analyst estimate.

It appears that Ruane Cuniff is merely taking some profits off the table and redeploying them into more favorable near-term segments of the economy.

3 of 25

Baidu

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  • Market value: $64.2 billion
  • Billionaire investor: Jim Simons (Renaissance Technologies)
  • Shares sold: 5,385,073 (-62%)

Baidu (BIDU, $184.61) was one of the largest positions of stocks sold by Renaissance Technologies in the first quarter.

Before the sale, the Chinese internet search engine company accounted for 2.0% of Renaissance’s $80.4 billion in assets. After the sale, Baidu was still its seventh-largest holding at a market value of $697.2 million, or 0.9%, of its portfolio. The hedge fund has held Baidu since Q1 2017, and paid an average price per share of $113.15.

Baidu reported its Q1 2021 results in mid-May. Revenues increased by 25% from the year prior to $4.4 billion. While ad sales accounted for 80% of core revenue during the quarter, non-advertising revenue grew by 70% over the three-month period. Within three years, BIDU expects non-advertising sales to exceed ad revenue. The increase in revenue from its cloud and artificial intelligence businesses certainly helped BIDU’s top line.

Of the 36 analysts covering Baidu, 31 think it’s a Buy or Strong Buy. Only one analyst believes it’s a Sell. The remaining four have it at Hold. The median target price is 2,056.51 Chinese yuan or $321.37 per American depositary share.

Renaissance wasn’t the only prominent seller of Baidu stock during the first quarter. Artisan Partners (APAM) sold 7.39 million shares during the quarter, reducing its position by 99% to just 0.02% of its $79.1-billion portfolio.

4 of 25

Discovery

photo of person watching TV holding remote

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  • Market value: $15.1 billion
  • Billionaire investor: John Paulson (Paulson & Co.)
  • Shares sold: 6,902,805 (-100%)

In mid-May, AT&T (T) announced it was spinning off its WarnerMedia subsidiary, which includes HBO and CNN, and merging it with Discovery Communications (DISCA, $30.46), whose properties include Food Network and HGTV.

The combined entity believes its size and scale allow it to take on and win customers from streaming video giants Netflix (NFLX) and Walt Disney (DIS).

Under the terms of the deal, AT&T shareholders will own 71% of the business, with Discovery shareholders owning the rest.

Is it possible that Paulson got wind of a pending deal and didn’t like what he saw? After all, he sold his entire DISCA stake six weeks or more before the deal’s announcement.

Discovery was a large part of the Paulson & Co. portfolio, accounting for almost 5% of its $4.4 billion in assets reported under its 13F. Paulson first owned DISCA in the fourth quarter of 2017, paying an average price of $24.32 per share for its holdings.

Whatever the reason, BofA Global Securities analyst David Barden believes the AT&T-DISCA deal is beneficial to both companies. More importantly, AT&T gets out of the media business and receives $43 billion in cash and securities to pay down its debt.

Some would say it’s a wise play on a poor hand of cards.

5 of 25

Carnival

A Carnival cruise ship

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  • Market value: $34.9 billion
  • Billionaire investor: Marshall Wace LLP
  • Shares sold: 8,012,746 (-76%)

Marshall Wace reduced its position in Carnival (CCL, $29.28) from 1.2% of its $21.8-billion portfolio at the end of December to 0.3% at the end of March. Despite the sale – its largest of the first quarter by shares sold – it still owns 2.4 million shares of the cruise line stock.

The U.K.-based asset manager first owned Carnival’s shares in the third quarter of 2020. This suggests that it was betting on the industry’s recovery. It paid an average price of $19.97 per share for CCL stock, and the shares traded as high as $29 in March. It made an excellent return on investment over three quarters.

Some industry pros believe that Carnival’s shares have more upside, suggesting Marshall Wace may have left some profits on the table.

“We are going to see cruise liners starting to sail again,” Danielle Shay, director of options at Simpler Trading told CNBC on May 25. “The cruise liners are still beat down, which means that you still have some upside.”

Shay stated that Carnival and its two biggest rivals are trading between 33% and 45% below their January 2020 highs, before the pandemic wiped out their businesses.

Should Carnival’s three key U.S. ports resume sailing this summer as expected – Port Canaveral and Port Miami in Florida, and Port of Galveston in Texas – it’s possible that its shares could move even higher.

Marshall Pace didn’t have this information when it sold 76% of its Carnival stake in the first quarter.

6 of 25

PayPal

The PayPal app on a smartphone

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  • Market value: $315.8 billion
  • Billionaire investor: David Tepper (Appaloosa Management)
  • Shares sold: 350,000 (-66%)

While PayPal Holdings (PYPL, $268.82) is only Appaloosa’s 37th largest position in a $7-billion portfolio, it was one of the more significant cuts on a percentage basis in the first quarter.

Appaloosa first started buying PayPal in Q2 2020. Over three quarters, it paid an average of $174.23 for its shares in the digital payments platform. It’s possible the hedge fund simply wanted to take profits.

Alternatively, Appaloosa may have felt PayPal was barking up the wrong tree with its plans to develop a “super app” similar to Alipay, WeChat, Paytm or Grab. The company is looking to get into stock investing, high-yield savings accounts and all kinds of other financial services to gain more business from its core users.

“There’s too many apps on all of our phones – I can’t have an app for my pharmacy, my grocery, for all the different retailers I have,” PayPal CEO Dan Schulman told Bloomberg in May. “I can’t have 40 to 50 different apps on my phone. I can’t remember the passwords; I don’t want to enter in all my info every time. There’s really only eight to 10 apps that we use every single day or every single week. Those apps are going to morph into what we call super apps.”

Analysts aren’t so sure that PayPal will convince U.S. consumers to change the way they use products and services. A possible target audience could be the 25% of Americans who own a smartphone but remain unbanked.

7 of 25

Laboratory Corp. of America

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  • Market value: $25.3 billion
  • Billionaire investor: Larry Robbins (Glenview Capital Management)
  • Shares sold: 331,592 (-60%)

By no means is Laboratory Corp. of America (LH, $259.09) a significant position for Glenview. It represented 2.6% of its $5.9 billion in assets at the end of December. Now, after selling 60% of its holdings in one of America’s largest owners of clinical labs, it has 220,595 shares in LH, or less than 1% of Glenview’s portfolio. That makes it just the 28th-largest position.

The asset manager first bought LH stock in the second quarter of 2020, paying an average of $166.11 a share.

Lab Corp. has benefited over the past 15 months from the coronavirus. In March 2020, in an effort to get more Americans tested, private commercial labs such as Lab Corp. started doing COVID-19 testing. As a result, its revenues and profits exploded.

The company’s Q1 2021 results showed sales grew by 50% year-over-year to $4.2 billion and adjusted earnings per share (EPS) spiked 271% to $8.79 per share. LH’s COVID-19 testing accounted for a significant amount of its revenue growth during the quarter.

However, LH’s guidance for all of 2021 calls for earnings from COVID-19 testing to fall by 35%-50% as the world gets back to normal. It’s safe to assume that Glenview feels Lab Corp.’s pandemic-fueled gains are coming to an end.

8 of 25

Herbalife Nutrition

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  • Market value: $5.6 billion
  • Billionaire investor: Carl Icahn
  • Shares sold: 8,018,886 (-100%)

Carl Icahn’s infatuation with Herbalife Nutrition (HLF, $52.29) finally came to an end after first buying the stock in Q1 2013.

In the third quarter of 2020, the billionaire cut his stake in the multi-level-marketing nutrition firm to 20.5 million shares.

By the end of March 2021, Icahn whittled the holding down to 8.02 million shares, most repurchased by Herbalife in January at an average price of $48.05 a share. As part of that repurchase, Icahn agreed to relinquish the five seats on HLF’s board his representatives held.

Icahn sold off the final amount between April 28 and May 6 at prices between $46 and $48. In May 2018, Icahn owned almost 24% of the company. Estimates put Icahn’s profits from Herbalife at well over $1 billion.

Now that Icahn’s moved on from HLF, his stake in Occidental Petroleum (OXY) is his second-largest holding behind Icahn Enterprises (IEP), his own holding company. Icahn owns 77.9 million shares, or 8.3%, of the oil-and-gas producer.

However, Icahn appears also to be reducing his investment in Occidental. In the first quarter, he sold 13.4 million shares, or 14% of his holdings. There could be more selling on the horizon, considering in mid-March, the billionaire investor indicated that he would sell up to 30 million of those OXY shares to reposition assets.

His third-largest holding is CVR Energy (CVI). His 71.2 million shares represent a 70.8% ownership stake in the oil refiner and nitrogen fertilizer manufacturer.

9 of 25

Tesla

Tesla sedans in front of a Tesla sign

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  • Market value: $582.7 billion
  • Billionaire investor: Baillie Gifford
  • Shares sold: 11,088,110 (-40%)

Since the end of Q3 2020, Baillie Gifford has cut its stake in Tesla(TSLA, $604.87) by more than half to 16.2 million, with approximately 11.1 million shares sold in the first quarter of 2021 and 7.4 million in Q4 2020.

Despite the significant reduction, the electric vehicle (EV) stock remains Baillie Gifford’s largest holding at 6% of its $178.7 billion in assets listed on its Q1 2021 13F. The investment manager’s second-largest holding is Amazon.com at 5.1%.

According to WhaleWisdom, Baillie Gifford paid an average price of $41.89 for its TSLA shares since first buying in Q1 2013. In the first quarter of this year, Tesla’s share price traded between a high of $900.40 in late January and a low of $539.49 in early March.

Assuming it sold at or near the high for the quarter, Baillie Gifford theoretically could have made more than 2,000% on the shares it sold in Q1 2021.

There was disagreement amongst the portfolio managers at Baillie Gifford about how much Tesla to sell. In February, Funds Insider reported that some of Baillie Gifford’s open-end mutual funds had cut their positions by a significant amount while others such as the Baillie Gifford Positive Change fund remained large stakeholders. As of May 31, Tesla was the third-largest position held by that fund at 7.1%.

Whatever Baillie Gifford does with its remaining Tesla shares is bound to gain attention through the remainder of the year and into 2022.

10 of 25

Green Brick Partners

New home construction

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  • Market value: $1.1 billion
  • Billionaire investor: David Einhorn (Greenlight Capital)
  • Shares sold: 6,700,000 (-27%)

Greenlight Capital sold 27% of its shares of Green Brick Partners(GRBK, $22.18) during the first quarter. However, the hedge fund’s investment in the diversified homebuilder and land development company still accounts for 33.3% of its $1.4-billion portfolio.

David Einhorn first met Green Brick CEO Jim Brickman in 2002. Brickman invested with Greenlight, and together, the two men started buying up distressed real estate assets. In 2009, they formed Green Brick Partners. A few homebuilder acquisitions later, they took the company public via a reverse merger with Denver-based ethanol producer BioFuel Energy in October 2014.

At the merger, Greenlight and Brickman owned 49.9% and 8.4%, respectively, of the merged entity. Today, Einhorn remains chairman of Green Brick and owns 34.4% of the company.

In Greenlight Capital’s Q1 2021 shareholder letter, Einhorn had good things to say about Green Brick.

“GRBK, as a business, had excellent results. Full year 2020 earnings per share were up 97%. More importantly, its backlog grew 86% and its lot position grew 61%. In early 2021, the business accelerated further, with new orders up 80% through February, ahead of last year’s 76% growth in the comparable (pre-COVID) period,” Einhorn wrote.

“Normally, the business is limited by sales. Currently, GRBK is limited by how many houses it is able to build and how quickly it is able to build them. This is what we call ‘a high class problem.'”

At the time of the BioFuel merger, GRBK shares were trading around $7.25. That’s a threefold return over six-and-a-half years or just less than 20% compounded annually.

11 of 25

NCR

Generic bank ATMs

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  • Market value: $6.0 billion
  • Billionaire investor: David Einhorn (Greenlight Capital)
  • Shares sold: 1,026,147 (-100%)

Greenlight’s sale of its NCR (NCR, $46.18) position was included in this list of 25 stocks because it was the largest position (2.3% of portfolio) at the end of December that Einhorn completely sold in the first quarter.

According to WhaleWisdom, it first bought NCR shares in Q3 2020, paying an average price of $22.14 per share. The maker of ATMs, point-of-sale terminals and self-checkout systems has done well over the past year – up about 140% over the past 52 weeks – so it’s not unusual for Einhorn to be taking profits.

If Einhorn didn’t sell, NCR would likely be in Greenlight’s top 10 holdings.

All of NCR’s gains in 2021 have come in the past three months. On Jan. 25, it announced that it would acquire Cardtronics (CATM) for $2.5 billion in cash, or $39 per CATM share, including the assumption of debt. The deal strengthens the company’s move toward the NCR-as-a-Service strategy it launched in December.

While NCR expects to find between $100 million and $120 million in annual operating cost synergies by the end of 2022, it wasn’t enough to keep Einhorn invested. Cardtronics previously had agreed to an offer from private-equity firm Apollo Global Management (APO).

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