In this article, we discuss Bill Gates' 2022 portfolio and 7 stocks to sell. If you want to skip our detailed analysis of Gates' hedge fund performance, stock selection and history, go directly to Bill Gates' 2022 Portfolio: 4 Stocks to Sell.
Bill Gates is perhaps the most well-known billionaire in modern times. He amassed his first billion dollars at the age of 31 with his exploits as the founder and chairman of Microsoft Corporation (NASDAQ:MSFT). The nearly $2 trillion empire he helped set up is one of the world's leading technology conglomerates today, and has allowed the Seattle-born 66-year old to dabble in various philanthropic and investment ventures.
Bill and Melinda Gates Foundation Trust is managed by Chief Investment Officer Michael Larson, who is also responsible for managing Bill Gates' personal wealth. As of the first quarter of 2022, Bill and Melinda Gates Foundation Trust has $19.76 billion in assets under management, with a top 10 holdings concentration of 95.92%. The fund's portfolio consists of 18 stocks in total, most of which are the fund's long-term holdings. In the first quarter of 2022, the fund did not make any new purchases or increased stakes in any stocks, but reduced holdings in 8 equities, and completely sold out of 4 stocks. The most prominent stocks in Gates' portfolio include Berkshire Hathaway Inc. (NYSE:BRK-B), Microsoft Corporation (NASDAQ:MSFT) and Walmart Inc. (NYSE:WMT), along with others mentioned below.
Now let's take a look at the top 7 stocks to sell according to the portfolio of Bill Gates.
We examined Bill Gates' portfolio for the first quarter of 2022, and picked the top 7 stocks in which his fund recently reduced/exited his position.
Bill Gates' 2022 Portfolio: 7 Stocks to Sell
7. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 63 Reduction In Stake: 57%
Walmart Inc. (NYSE:WMT) shares represent 2.27% of Bill Gates' portfolio for the first quarter of 2022, with 3.02 million shares valued at roughly $450 million. It boasts a market cap of $361 billion, and operates a range of retail and wholesale supermarkets across the United States, Canada and Mexico. Walmart Inc. (NYSE:WMT) offers a solid dividend yield of 1.83% as of May 18.
Guggenheim analyst Robert Drbul on May 18 kept a 'Buy' rating on Walmart Inc. (NYSE:WMT) shares, and decreased the price target to $175 from $185. The analyst reduced his FY22 and FY23 estimates owing to logistical headwinds and elevated costs on the back of rising inflation. Nonetheless, he remains bullish on the firm's long-term outlook, given its price leadership, scale, and a more diversified profit base as compared to peers.
Out of all the hedge funds tracked by Insider Monkey, 63 reported bullish bets on Walmart Inc. (NYSE:WMT) shares at the close of Q4 2021, with a combined value of $7.13 billion. This shows a downward trend from the previous quarter where 71 hedge funds held positions in the company. According to its first quarter portfolio, GQG Partners was the largest shareholder of Walmart Inc. (NYSE:WMT), with 15.43 million shares valued at $2.29 billion.
The firm released its first quarter earnings report on May 17, and EPS was recorded at $1.30, below estimates by $0.18. Quarterly revenue was recorded at $140.3 billion, above analysts' forecasts by $2.24 billion. As of May 18, shares of Walmart Inc. (NYSE:WMT) have lost 13.50% in the last 12 months, and 14.26% over the last 6 months.
In addition to Berkshire Hathaway Inc. (NYSE:BRK-B) and Microsoft Corporation (NASDAQ:MSFT), Walmart Inc. (NYSE:WMT) is on the radar of investors on Wall Street.
6. FedEx Corporation (NYSE:FDX)
Number of Hedge Fund Holders: 64 Reduction In Stake: 65%
FedEx Corporation (NYSE:FDX) offers e-commerce delivery and logistics services to clients in the United States and internationally. According to regulatory filings for Q1 2022, Bill Gates owned 534,000 shares of the firm at a price of $123.6 million, representing 0.62% of its total portfolio. This represented a decline of 65% in holding over the previous quarter, where 1.49 million shares of FedEx Corporation (NYSE:FDX) were reported in the billionaire's portfolio.
On May 9, Citi analyst Christian Wetherbee maintained a 'Buy' rating on FedEx Corporation (NYSE:FDX) shares, and set a price target of $270, noting the firm could become the 'universal shopping cart' in e-commerce, with its 2020 acquisition of ShopRunner and partnership with Microsoft allowing it to expand operations in the e-commerce market. The analyst has a long-term bullish stance on the shares.
As of the end of the fourth quarter of 2021, FedEx Corporation (NYSE:FDX) shares were reported in the portfolios of 64 hedge funds out of 900+ in the database of Insider Monkey. The aggregate value of these holdings stood at $2.46 billion. This shows a positive trend from the quarter before, where 49 hedge funds were long on the company shares. Southeastern Asset Management held a $321 million stake in FedEx Corporation (NYSE:FDX) at the close of the first quarter of 2022, making it the firm's largest shareholder.
Investment firm Artisan Partners, in its Q3 2021 investor letter, talked about FedEx Corporation (NYSE:FDX). Here's what the fund said:
“Our weakest Q3 performers included FedEx. Shares of FedEx, a global shipping and logistics firm, were held back by disappointing business results as labor cost headwinds and air network disruptions overshadowed solid top-line trends. We think the company should be able to overcome these near-term issues. Importantly, FedEx has strong pricing power as it operates in a consolidated global shipping industry. In September, the company announced it would increase its shipping rates by an average of 5.9% across most of its services, which is the first time in several years that its annual increase would exceed 5.0%. The industry’s renewed pricing discipline is a welcome change, reflecting a broader commitment to earn better returns on invested capital. FedEx is also closer to fully integrating TNT, a European-focused parcel company it acquired in 2016. The market is beginning to incorporate a higher probability FedEx will fully integrate TNT, which will provide a significant boost to profits. The stock now trades at a near-trough multiple of less than 12X 2022 earnings, so we added to our position on weakness.”
5. United Parcel Service, Inc. (NYSE:UPS)
Number of Hedge Fund Holders: 55 Reduction In Stake: 68%
Bill Gates owned roughly 741,000 shares of United Parcel Service, Inc. (NYSE:UPS) in the first quarter of 2022, with a price tag of $158.8 million. This was a decrease of 68% in holding over the previous quarter where the billionaire owned 2.28 million shares of the firm.
United Parcel Service, Inc. (NYSE:UPS) is an Atlanta-based firm which provides logistics and package delivery services in the United States and across the globe. On April 27, Credit Suisse analyst Ariel Rosa gave the firm an 'Outperform' rating, and lowered the price target to $226 from $263. She believes that risks have increased moderately for the firm's business, which includes competition hurting the pricing power, decreasing demand due to slowdown in the macro setting, and labor challenges adversely affecting margins.
In the first quarter, United Parcel Service, Inc. (NYSE:UPS) posted revenue of $24.4 billion, beating estimates by $579.2 million. EPS was recorded at $3.05, above expectations by $0.17.
Hedge funds were seen buying into United Parcel Service, Inc. (NYSE:UPS) stock. At the end of December, 55 hedge funds were long on the company shares with aggregate holdings worth $2.1 billion. In comparison, 42 hedge funds held positions in the company at the end of September.
In addition to Berkshire Hathaway Inc. (NYSE:BRK-B), Microsoft Corporation (NASDAQ:MSFT) and Walmart Inc. (NYSE:WMT), United Parcel Service, Inc. (NYSE:UPS) is a prominent stock in the portfolio of Bill Gates.
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Disclosure. None. Bill Gates' 2022 Portfolio: 7 Stocks to Sell is originally published on Insider Monkey.