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Wall Street whales took note of Alphabet. Hedge fund managers and billionaire investors alike downplayed or sold their stakes in Google’s parent company all at once in the fourth quarter of 2023, according to regulatory filings. These disclosures, although backward-looking, shed light on moves made by influential investors. Alphabet’s sale occurred during the last three months of the year, when the club name and the stock market as a whole were doing well. In 2023, the stock price rose 58.3%. This is more than double his 24.2% rise in the S&P 500. Notably, in the fourth quarter, Alphabet’s stock price rose 6.75%. Stocks have risen 1% so far in 2024, lower than the S&P 500’s 5% year-to-date rise. GOOGL 1Y Mountain Alphabet stock price performance over the past 12 months. Dan Loeb’s hedge fund Third Point and billionaire investor Stanley Druckenmiller searched in the three months ending Dec. 31, according to Securities and Exchange Commission 13F disclosures released this week. All shares in a major engine company were sold. Third Point has owned Alphabet for less than a year, but Druckenmiller has bought and sold shares in recent quarters. Both men’s assets were worth more than $100 million. Third Point and Druckenmiller’s exits were among a number of club stock-related transactions that surfaced this week in the latest collection of 13Fs, which institutional investors with assets of $100 million or more are required to file quarterly with the SEC. Ta. The fourth-quarter disclosure cycle revealed that tech stocks were sold off heavily on a wave of artificial intelligence optimism on Wall Street, setting them up for impressive results in 2023. Of course, the motives behind a professional’s decisions cannot be determined from regulatory filings alone. But in general, the decision to take something out of a stock that is skyrocketing during the fourth quarter is understandable. That’s because we believe he took a similar action in early January, reducing positions in eight of his holdings that had risen significantly in value over the past year. In addition to Alphabet, these stocks comprised the rest of our six important stocks (Metaplatform, Microsoft, Amazon, Apple, Nvidia) plus Salesforce and Palo Alto Networks. Disadvantages of the 13F While useful for winning the hearts and minds of whales, the 13F does not include a detailed list of transactions, only a quarter-end snapshot. It’s entirely possible that the fund’s holdings have changed by the time last quarter’s filings are revealed. This is especially important for certain hedge fund managers, such as David Tepper, who are known for being nimble traders. Additionally, short positions (bets that stock prices will fall) are not disclosed in his 13F, making it difficult to determine the fund’s full attitude toward the market. Some Wall Street veterans, such as David Tepper’s Appaloosa Management, simply reduced their involvement in Alphabet this quarter. The company ended the year with a 16% stake in Alphabet, leaving it with a position worth about $324 million. Baupost Group, a hedge fund run by value investor Seth Claman, sold about 23% of Alphabet stock during the same period. Baupost’s stock was worth about $416 million at the end of the quarter. The Club has owned Alphabet and other Significant Six megacaps for many years. But after Google’s parent company’s latest earnings report showed weakness in its main advertising business, Jim Cramer admitted he “continues to think about whether we should own Alphabet.” . Not everyone was selling Alphabet in the fourth quarter. Michael Berry, of “Big Short” fame, started a long position in the tech giant during the quarter and had nearly $5 million in holdings at year-end. Bill Ackman’s Pershing Square Capital Management retained a large stake in Alphabet during this period. At the end of the year, it was worth about $1.9 billion. During the fourth quarter, Tepper also reduced his stake in NVIDIA, a leading manufacturer of his AI chips. Nvidia’s value is expected to more than triple in 2023, making it the S&P 500’s best performing stock. Tepper sold nearly 23 of his shares. % of his Nvidia stock in three months, but at the end of the year it was still one of his largest holdings. Mr. Tepper modestly added large stakes in Microsoft and Amazon, worth $639.27 million and $600.16 million, respectively, at the end of the quarter. NVDA 1Y Mountain His Nvidia stock performance over the past 12 months. Mr. Druckenmiller, who closed his hedge fund more than a decade ago and now runs the Duquesne Family Office, also sold some of his Nvidia stock in the fourth quarter. However, it remains one of his largest holdings, according to SEC disclosures. The investor also purchased call options in Nvidia, giving him the right, but not the obligation, to buy additional shares in the chipmaker at an agreed-upon price in the future, according to the filing. In non-tech moves, Druckenmiller cut his stake in Eli Lilly and Lilly, another 2023 hot stock, by about 11% in the last three months of the year. His position was worth about $234.7 million at year-end. He also stepped down from a small position at Danaher. Lilly and Danaher are the executives of his Jim’s Charitable Trust, a portfolio used by the CNBC Investment Club. Warren Buffett’s Berkshire Hathaway sold part of its only holding in Significant Six, Apple, in the fourth quarter, according to a company filing. Berkshire offloaded about 10 million shares in the iPhone maker, leaving the conglomerate with more than 905 million shares worth $174.35 billion at the end of the quarter. Mr. Buffett has long admired Apple, calling it a “great business” above all others in Berkshire’s vast corporate empire, which includes BNSF Railway and auto insurance company Geico. Against this backdrop, we believe fourth-quarter sales were driven by prudent portfolio management. This is a move similar to ours in early January when he cut back on his Apple to right-size his position. In other words, they sold a small amount to prevent Apple from becoming too heavily weighted against other holdings. At the end of the day, we want to run a diversified portfolio. We don’t want to be an Apple fund. CRM 1Y Mountain Salesforce stock performance over the past 12 months. Another of his 2023 winners that saw sales in the fourth quarter is Salesforce. Jeff Smith’s Starboard Value, one of the first of many activist investors to publicly take aim at Salesforce, reduced its stake in the enterprise software giant by 11% over the same period. . At year-end, the company’s stock was still worth about $404 million. Starboard cut its stake in Salesforce in the first three quarters of 2023 as CEO Marc Benioff repeatedly demonstrated improved profitability and cost discipline to Wall Street’s satisfaction. Smith’s fund still owns about 1.54 million Salesforce shares, down from 3.03 million at the end of 2022, when the activist campaign began. Robes Third Point and Inclusive Capital, two other activist firms that also targeted Salesforce, sold their positions completely in the first half of 2023. Conclusion The information revealed in 13F should not serve as the basis for any investment decision, but it is worth noting it as part of the larger process of “buy and do your homework” that Jim preaches. . From a portfolio management perspective, it’s hard to argue with investors, whether Wall Street professionals or domestic individuals, who have reduced their stakes in 2023’s tech winners in recent months. We did it ourselves because our investment discipline required it. As Jim said, no one has ever benefited and gotten hurt. (See here for a complete list of Jim Cramer Charitable Trust stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in a charitable trust’s portfolio. If Jim talks about a stock on his CNBC TV, he will wait 72 hours before executing a trade after issuing a trade alert. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
A sign posted in front of Google’s offices in Mountain View, California, on January 30, 2024.
Justin Sullivan | Getty Images
The Wall Street whale got excited. alphabet.
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