In the dynamic world of stock trading, there’s no denying the importance of knowing which stocks billionaires are selling. Following these financial titans in their investment decisions can be invaluable in navigating the stock market’s volatility. Their access to top-tier research and wealth of experience often shape market trends, unlocking doors to potential investment avenues and shedding light on effective risk management.
Furthermore, their moves can significantly influence market trajectories. Their 13F provides a transparent view of Wall Street’s elite investors’ recent choices.
So, without further ado, let’s dive into three stocks that stocks billionaires are selling in the second quarter.
Chevron (CVX)
Chevron (NYSE:CVX) once basked in the golden glow of booming petroleum and natural gas prices, especially in the aftermath of Russia’s intervention in Ukraine last year.
Prominent investors have recently adjusted their stakes in Chevron. Prem Watsa completely sold out of his position, while Warren Buffet reduced his stake by 7.01%. Meanwhile, Jim Simmons made a significant cut, reducing his stake by 63.52%.
However, the party seemed to be winding down by the second quarter of this year. A dramatic plunge in earnings from $11.6 billion to a modest $6 billion can be attributed to a steep 80% year-over-year tumble in U.S. natural gas prices and a 37% dip in petroleum prices. The financial tapestry was further complicated as its free cash flow dropped by 76% year-over-year to a mere $2.5 billion, even with Chevron playing its hand with a massive $7.2 billion return to shareholders.
However, despite Chevron’s bullish maneuvers in the Permian Basin and its global escapades, its growing reliance on international results juxtaposed against the receding contribution from U.S. upstream earnings paints a concerning picture. Furthermore, you’re looking at a tough road ahead for Chevron with a not-so-rosy energy price forecast ahead and potential tremors such as the Australian union upheavals or a global economic downturn.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) continues to baffle investors. Though it doesn’t rev up like a typical automobile bigwig, its meteoric rise, massive market footprint, and multifaceted ventures command attention.
In the second quarter, several prominent investors made changes to their positions in Tesla. Both George Soros and David Tepper fully divested from the company. Jim Simmons significantly reduced his stake by 48.03%, while Ken Fisher made a milder cut of 10.7%. This make it one of those notable stocks billionaires are selling.
The spotlight shone even brighter in the second quarter of 2023 when Elon Musk’s brainchild rolled out an eye-popping 480,000 vehicles and racked up a staggering $25 billion in sales. A strategy leaning towards competitive pricing, though driving sales, continues to nibble away at its operating margins.
Tesla’s operating margins skidded to a mere 9.6% in the second quarter, compared to the first quarter’s 11.4% and 16% in the fourth quarter of 2022. However, Tesla’s valuations continue to rival Silicon Valley’s crown jewels, with its stock trading at more than 54.5 times forward cash flow estimates. Hence, a deep dive into its fundamentals points to an inflated valuation, prompting a need for investor caution.
Intel (INTC)
Intel (NASDAQ:INTC), despite flexing a robust second quarter, its stock is hovering stubbornly around the high $30s. CEO Pat Gelsinger paints a hopeful canvas, emphasizing potentially strong third-quarter revenues and promising collaborations.
During the second quarter, notable investors made adjustments to their Intel holdings. Steven Cohen significantly reduced his stake by 82.80%, Joel Greenblatt by 36.11%, Ken Fisher by 3.39%, and Jeremy Grantham by 0.61%
Additionally, the murky forecast for PC demand and potential hiccups in Intel’s data center narrative feed its bear case further. Feedback from tech titans such as Microsoft (NASDAQ:MSFT) and other PC moguls signals a sluggish resurrection of the market. While eyes are fixed on Intel’s upcoming Meteor Lake processor, its competition isn’t sitting idle.
The competition is already rolling out its AI-enhanced arsenal, increasing the competitive heat. Intel’s endeavor in the data center realm faces a gauntlet, especially from burgeoning AI accelerators. Moreover, on the margins front, Intel might be registering revenue upticks. Still, its gross margins are limping along at a snail’s pace, casting shadows on the efficacy of its turnaround plan.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
