In this article, we’ll look at 12 stocks to sell according to Motley Fool. To skip our detailed analysis of current market dynamics heading into 2023, you can jump straight to the 5 Stocks to Sell According to Motley Fool.
Motley Asset Management focuses on high quality growth companies and continually reviews its current holdings in light of current stock market trends to ensure it maximizes its profits and minimizes its losses.
In 2022, the stock market undeniably entered bearish territory. However, as most investors today opt for safer investment strategies and the economy slowly begins to recover, major financial institutions have hope for the economy and the market in 2023. According to a JPMorgan report on 2023 Long-Term Capital Market Assumptions, published 2022, the long-term global inflation forecast for 2023 is 2.6%. Analysts at JPMorgan expect current inflation to ease significantly over the next two years. They also increased their expected annual yield for a US dollar 60/40 equity bond portfolio over the next 10-15 years from 4.3% to 7.2%.
We used Motley Asset Management’s Q3 2022 13F holdings data to pick the stocks for our list below. The asset manager completely sold or reduced its stake in these companies in the third quarter of 2022. We also used Insider Monkey’s third-quarter hedge fund data to show hedge fund sentiment for these stocks. They are ranked by the number of hedge funds that have interests in them, from lowest to highest.
Stocks to sell according to Motley Fool
12. Cardlytics, Inc. (NASDAQ:CDLX)
Number of Hedge Fund holders: 24
Cardlytics Inc. (NASDAQ:CDLX) is an advertising company based in Atlanta, Georgia. The company offers the Cardlytics platform, which is the bank’s own advertising channel. The platform enables marketers to reach customers through their network of financial institution partners using digital channels such as mobile applications and email.
Motley Asset Management sold its interest in Cardlytics, Inc. (NASDAQ:CDLX) down 51% from Q3. Analysts are forecasting bleak earnings prospects for the company in 2023, expecting it to lose $2.35 per share this year and $2.09 per share in 2024. As of December 2022, Cardlytics, Inc. (NASDAQ: CDLX) $255 million in liabilities compared to $249 million in assets. This also indicates a weak financial position in the short term.
Cardlytics Inc. (NASDAQ:CDLX) was found among the 13F holdings of 24 hedge funds in the third quarter, with a total stake value of $126.7 million.
Headwaters Capital, an investment management firm, named Cardlytics, Inc. (NASDAQ:CDLX) in its fourth quarter 2021 investor letter. Here’s what the company said:
“Sells: Cardlytics (“CDLX”). The CDLX position was sold during the quarter as it had become an opportunity cost in the portfolio. CDLX was a small position at the beginning of the year and has subsequently underperformed throughout the year due to a number of poor strategic acquisitions and the low spend of the customer base. The acquisitions have been particularly concerning as the company has not articulated a clear strategic rationale for the deals and has slowed the company on its path to profitability as both acquired companies generate losses. Given the small size of the position and the need for capital for more attractive investment opportunities, the entire CDLX position was sold during the quarter.”
11. Landstar System, Inc. (NASDAQ:LSTR)
Number of Hedge Fund holders: 25
Landstar System, Inc. (NASDAQ:LSTR) is a transportation company based in Jacksonville, Florida. The company offers integrated transportation management solutions in the US, Canada, Mexico and internationally. It operates through the Transport Logistics and Insurance segments.
Baird analyst Garrett Holland has a neutral rating for Landstar System, Inc. shares as of February 3. (NASDAQ:LSTR).
Motley Asset Management sold its interest in Landstar System, Inc. (NASDAQ:LSTR) down 5% in the third quarter.
There were 25 hedge funds long Landstar System, Inc. (NASDAQ:LSTR) in the third quarter, with total stakes of $250.9 million.
Wedgewood Partners, an asset manager, named Landstar System, Inc. (NASDAQ:LSTR) in its Q2 2022 investor letter. Here’s what the company said:
“Landstar System, Inc. (NASDAQ:LSTR) reported revenue growth of +53% during the quarter, driving more than +60% growth in earnings per share. Despite strong results in recent quarters, the stock peaked in November 2021 as investors began trying to time the end of the economic cycle, using Landstar as a proxy for economic activity. We are less concerned about where we are in this particular macroeconomic cycle, not only because the market has already factored in a slowdown, but also because the underinvestment in long-haul drivers has been a phenomenon for decades that is unlikely to resolved even if consumer demand normalizes in the coming quarters. We believe Landstar should be generating additional returns over time as it is one of the few companies that has steadily invested in drivers while not seeing a concurrent increase in competitiveness.”
10. UiPath Inc. (NYSE: PAD)
Number of Hedge Fund holders: 26
UiPath Inc. (NYSE:PATH) is a system software company based in New York. It provides an end-to-end automation platform that provides Robotic Process Automation (RPA) solutions. The company is mainly active in the US, Romania and Japan.
Raimo Lenschow of Barclays has an Equal Weight rating for shares of UiPath Inc. as of Jan. 10. (NYSE: PATH).
Motley Asset Management sold its stake in UiPath Inc. (NYSE:PATH) in the third quarter and completely sold the stock.
ARK Investment Management was the largest stakeholder in UiPath Inc in the third quarter. (NYSE:PATH), with 44.1 million shares. A total of 26 hedge funds were long on the stock, with a total stake value of $993.5 million.
9.Penumbra, Inc. (NYSE:PEN)
Number of Hedge Fund holders: 27
Penumbra Inc. (NYSE:PEN) is a healthcare company based in Alameda, California. The company develops and sells medical devices in the US and internationally. It offers aspiration-based thrombectomy systems and associated devices.
Motley Asset Management sold its interest in shares of Penumbra, Inc. in the third quarter. (NYSE:PEN) down about 5%. The stock now only makes up about 0.4% of the asset manager’s portfolio. In February, UBS analysts called Penumbra, Inc. (NYSE:PEN) also one of the riskiest stocks this year.
In the third quarter, a total of 27 hedge funds had interests in Penumbra, Inc. (NYSE:PEN). Their total stake value was $549 million.
ClearBridge Investments, an asset manager, named Penumbra, Inc. (NYSE:PEN) in its Q4 2021 investor letter. Here’s what the company said:
“Our aversion to early-stage biotech proved productive, as did our approach to highlight the enablers and select, profitable medical technology companies. Strong fourth quarter contributors included Part shadea developer of stents and related products for the treatment of aneurysms, whose shares recovered from a product recall earlier this year.”
8. Trex Company, Inc. (NYSE:TREX)
Number of Hedge Fund holders: 28
Trex Company, Inc. (NYSE: TREX) is a building products company based in Winchester, Virginia. It manufactures and distributes decking, railings and outdoor living products and accessories for residential and commercial markets. The company operates through the Trex Residential and Trex Commercial segments.
On Jan. 30, Loop Capital analyst Jeffrey Stevenson reiterated a Hold rating for shares of Trex Company, Inc. (NYSE:TREX).
Motley Asset Management reduced its stake in Trex Company, Inc. (NYSE: TREX) in the third quarter up 36%.
There were 28 hedge funds long Trex Company, Inc. (NYSE: TREX) in the third quarter. Their total stake value was $256.9 million.
Baron Funds, an asset management company, named Trex Company, Inc. (NYSE:TREX) in its fourth quarter 2022 investor letter. Here’s what the company said:
“Shares of two leading companies in housing-related construction products fell in the most recent quarter, partly due to concerns about the housing-related slowdown and associated expected growth slowdown:
Trex Company, Inc. (NYSE:TREX): The No. 1 manufacturer of wood-alternative outdoor decking and railings in the U.S. by market share. Pool Corporation: The world’s largest distributor of swimming pool supplies, equipment and related leisure products and is also one of the top three distributors of irrigation and landscape suppliers in the US.
We have purchased shares of both Trex and Pool at prices that we believe are attractive relative to their long-term growth potential.”
7. Ultragenyx Pharmaceutical Inc. (NASDAQ: RARE)
Number of Hedge Fund holders: 31
Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) is a biotechnology company based in Novato, California. It works on the identification, acquisition, development and commercialization of new products for the treatment of rare and ultra-rare genetic diseases. The company operates in North America, Europe and internationally.
In the third quarter, Motley Asset Management reduced its stake in Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) by about 52%. Avisol Capital Partners considers the stock to be stagnant due to a lack of key near-term catalysts. They consider the operating expenses of Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) in the third quarter, which were $315.8 million, as too high. This is because these expenses, coupled with Q3 revenue of $90.7 million, mean that the company’s available cash only gives it a runway of about three to four quarters at best.
Our hedge fund data shows that 31 funds are long Ultragenyx Pharmaceutical Inc. (NASDAQ: RARE) in the third quarter, with total stakes of $409 million.
6. MarketAxess Holdings Inc. (NASDAQ:MKTX)
Number of Hedge Fund holders: 32
MarketAxess Holdings Inc. (NASDAQ:MKTX) is a financial exchange and data company based in New York. The Company operates an electronic trading platform for institutional investors and broker-dealer companies around the world.
Credit Suisse analyst Gautam Sawant has a neutral rating for shares of MarketAxess Holdings Inc. as of January 26. (NASDAQ: MKTX).
MarketAxess Holdings Inc. (NASDAQ:MKTX) was one of the stocks sold entirely by Motley Asset Management in the third quarter.
A total of 32 funds were long on MarketAxess Holdings Inc in the third quarter. (NASDAQ: MKTX). Their total stake value was $847.6 million.
Baron Funds, an asset manager, named MarketAxess Holdings Inc. (NASDAQ:MKTX) in its Q2 2022 investor letter. Here’s what the company said:
“We have our position MarketAxess Holdings Inc. (MKTX), an electronic trading platform for fixed income instruments, on concerns about modest declines in the company’s relative market share.”
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Revelation: No. 12 Stocks to Sell According to Motley Fool was originally published on Insider Monkey.
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