The 5 Most-Sold Guru Stocks of the 2nd Quarter

These stocks had the most sells from gurus during the quarter

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Aug 24, 2020
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In the second quarter of 2020, gurus continued to have high turnover rates in their portfolios as the economic downturn in the U.S. and much of the world has led them to re-evaluate their holdings and distribute their funds to new opportunities.

According to GuruFocus Hot Picks, a feature which allows investors to screen for the stocks that had the most guru buys or sells over a specific time frame, the five stocks that gurus sold the most during the second quarter (as determined by net sells) were Alphabet Inc. (GOOG, Financial)(GOOGL, Financial), Microsoft Corp. (MSFT, Financial), Oracle Corp. (ORCL, Financial), Cisco Systems Inc. (CSCO, Financial) and Adobe Inc. (ADBE, Financial).

Alphabet

Based in Mountain View, California, Alphabet is a multinational conglomerate that was formed as part of a restructuring of Google in 2015, in which Alphabet became the parent company of Google and several former Google subsidiaries. As of Aug. 24, the company has a market cap of $1.08 trillion.

During the quarter, 26 gurus sold voting shares of Alphabet and 26 gurus sold non-voting shares, while 10 gurus bought voting shares and seven bought non-voting shares. In total, there were 35 net sells.

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At the end of the quarter, 41 gurus owned voting shares of Alphabet and 41 owned non-voting shares. Steven Romick (Trades, Portfolio) reduced his voting shares by 12.64% and non-voting shares by 15.96%, while Diamond Hill Capital (Trades, Portfolio) reduced its voting shares by 25.86% and its non-voting shares by 36.75%. Andreas Halvorsen (Trades, Portfolio), Jerome Dodson (Trades, Portfolio) and Leon Cooperman (Trades, Portfolio) were among those who sold out of their holdings in the stock.

In its results for the second quarter of 2020, Alphabet recorded year-over-year declines in Google advertising and Google search revenue, but YouTube ads, Google Cloud and Google other (including YouTube's non-ad income streams) showed improvement. The company plans on a modest reduction in capital expenditures for 2020 compared to the prior year as it re-evaluates the optimal work environment in light of the ongoing pandemic.

Shares of Alphabet have gained approximately 37% over the past 12 months to trade around $1,582.11 per voting share and $1,586.54 per non-voting share on Aug. 24.

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Microsoft

Microsoft is a multinational tech giant headquartered in Redmond, Washington. The company develops, manufactures, licenses, sells and supports PCs, consumer software, consumer electronics and related services. As of Aug. 24, the company has a market cap of $1.61 trillion.

During the quarter, 36 gurus sold shares of Microsoft while 14 bought the stock, resulting in 22 net sells.

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At the end of the quarter, 51 gurus owned shares of Microsoft. Philippe Laffont (Trades, Portfolio) reduced his position by 82.29%, the Yacktman Focused Fund (Trades, Portfolio) sold 20.37% of its holding and Barrow, Hanley, Mewhinney & Strauss cut its position by 88.33%. Dodson and Ken Heebner (Trades, Portfolio) sold out of the stock.

Microsoft continues to benefit from its increasing shift to digital and cloud services, seeing strong growth in software services and Azure. "The last five months have made it clear that tech intensity is the key to business resilience," CEO Satya Nadella said on the company's earnings results for its fiscal fourth quarter of 2020, which ended on June 30.

Shares of Microsoft have gained approximately 60% over the past 12 months to trade around $213.32 on Aug. 24.

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Oracle

Oracle is a computer software company based in Redwood Shores, California. Best known for its Oracle database software and its computer systems and software, such as Solaris and Java, the company designs, manufactures and sells a variety of technology and software products. As of Aug. 24, the company has a market cap of $170.83 billion.

During the quarter, 23 gurus sold shares of Oracle while six bought the stock, resulting in 17 net sells.

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At the end of the quarter, 29 gurus owned shares of Oracle. Yacktman Asset Management (Trades, Portfolio) sold 59.46% of its funds' holdings in the company, Chris Davis (Trades, Portfolio) reduced the position by 85.08% and First Pacific Advisors (Trades, Portfolio) cut its holding by 27.67%. Lee Ainslie (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) sold out of the stock.

Despite having a lower valuation than many competitors, Oracle was one of the biggest guru sells of the three months ended June 30. The company has a price-earnings ratio of 17.86, which is lower than 69.70% of other companies in the software industry and comes in below the company's own 10-year median price-earnings ratio of 18.29. Cloud infrastructure and cloud applications drove 5% year-over-year growth in earnings per share for Oracle's fiscal fourth quarter of 2020. During the quarter, the company launched Exadata Cloud@Customer, allowing on-premise database customers to run the Oracle Autonomous Database in their own datacenters.

Shares of Oracle have gained approximately 7% over the past 12 months to trade around $55.62 on Aug. 24.

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Cisco Systems

Cisco Systems is a multinational technology company and worldwide leader in IT, networking and cybersecurity solutions. Based in San Jose, California, the company develops, manufactures and sells networking hardware, software, telecommunications equipment and other tech products. As of Aug. 21, the company has a market cap of $178.39 billion.

During the quarter, 19 gurus sold shares of Cisco while five bought the stock, resulting in 14 net sells.

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At the end of the quarter, 25 gurus owned shares of Cisco. Chuck Royce (Trades, Portfolio) reduced his investment by 32.08%, the Parnassus Endeavor Fund (Trades, Portfolio) sold 40.48% of its holding and Charles Brandes (Trades, Portfolio) cut the position by 14.41%. First Pacific Advisors and Steven Cohen (Trades, Portfolio) sold out of the stock.

Cisco has achieved its goal of restructuring so that more than half of its revenue comes from software and services by the end of the company's fiscal year 2020, which ended on July 25. This accomplishment was helped along by the favorable business environment for software and subscriptions, with subscriptions making up 78% of revenue for the software segment during the quarter. In the fiscal first quarter of 2021, the company completed its acquisition of ThousandEyes Inc. in its bid to increase its presence in Cloud infrastructure.

Shares of Cisco have lost approximately 9% over the past 12 months to trade around $42.02 on Aug. 24.

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Adobe

Adobe is known for its multimedia and creativity software products such as Photoshop, Illustrator and the rest of the Adobe Creative Suite. The San Jose, California-based company has also made more recent forays into digital marketing software. As of Aug. 24, the company has a market cap of $227.13 billion.

During the quarter, 19 gurus sold shares of Adobe while six bought the stock, resulting in 13 net sells.

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At the end of the quarter, 23 gurus owned shares of Adobe. Ainslie reduced the position by 70.74%, while Caxton Associates (Trades, Portfolio) cut 59.35%. Laffont, Dodson, Jim Simons (Trades, Portfolio) and Julian Robertson (Trades, Portfolio) sold out of the stock.

Adobe recorded record revenue during the second quarter of 2020, with all segments except Advertising Cloud reporting year-over-year growth. The company's digital media segment was especially strong with 18% growth. "Adobe's strategy to empower customers to create the world's content, automate critical document processes and enable enterprises to engage with their customers digitally, drove record revenue in Q2," CEO Shantanu Narayen said. However, some investors are worried about the company's acquisition-fueled foray into digital marketing, which could be an example of "diworseification," or expanding into areas that the company has less ability to capitalize on.

Shares of Adobe have gained approximately 67% over the past 12 months to trade around $473.48 on Aug. 24.

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Disclosure: Author owns no shares in any of the stocks mentioned. The mention of stocks in this article does not at any point constitute an investment recommendation. Investors should always conduct their own careful research and/or consult registered investment advisors before taking action in the stock market.

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