Earlier this week, I covered the most-loved stocks by hedge funds in the second quarter of 2018, according to 13F filings. The filings, which are submitted to the Securities and Exchange Commission within 45 days after the end of each calendar quarter, detail equity positions of hedge funds with more than $100 million in assets under management. Since they are backward-looking, they are useless for trading but do provide a fascinating insight into what hedge fund managers are doing. They exclude cash and credit positions.
I now want to look at the equities that were most sold by hedge funds throughout the second quarter.
As I mentioned previously, media was the most acquired sector according to data filed with the SEC and compiled by GuruFocus. This is a marked change from previous quarters. For the past two years, tech stocks have regularly ranked among the most bought equities, but this is no longer the case.
Indeed, according to the latest set of figures, some of the securities sold the most last quarter were tech stocks, a complete reversal from the previous trend. Some of the industry's biggest names decided to dump their FANG holdings.
The most sold stocks
Facebook (FB, Financial) tops the list of stocks dumped by hedge funds. David Tepper (Trades, Portfolio), Lee Ainslie (Trades, Portfolio), Daniel Loeb (Trades, Portfolio) and  Steve Mandel (Trades, Portfolio) all decreased their positions in the tech giant by between 12% and 56%.
These are big moves for what was one of the S&P 500's most-loved stocks among funds only a few quarters ago. It seems that issues surrounding personal data privacy and a slowdown in growth are to blame, though this is just a guess. The hedge funds' filings only detail buying and selling, they do not tell us why managers make the trades they do.
Microsoft (MSFT, Financial) was another stock that was dumped during the quarter. The data here is slightly misleading because there was a massive sale by the Bill and Melinda Gates Foundation Trust during the period, while other big names added to their holdings. Mandel's Lone Pine Capital increased its stake by 3.5% and Ainslie's Maverick Capital increased its holding by a similar amount. Third Point, Loeb's hedge fund, tripled its Microsoft holding to 2.3 million shares.
Moving away from the tech sector, another company that was featured among the top 10 most sold for the second quarter was United Health Group Inc. (UNH, Financial). Once again, Lone Pine Capital was a big seller. The firm dumped 3.2% of its holdings during the three months to the end of June, joining Tepper's Appaloosa and Leon Cooperman (Trades, Portfolio)'s Omega as sellers.
United Health was actually a significant position for Lone Pine, so it is notable that the firm reduced its holdings during the quarter. Booking Holdings Inc. (BKNG, Financial) has now replaced United as the fifth-largest position after Lone Pine increased its holdings during the quarter. Other notable sales by Mandel's firm include a 21% reduction in Adobe Systems (ADBE, Financial) and a 20% reduction in Constellation (STZ, Financial).
The most notable change was Facebook. Previously, this was Mandel's largest position, accounting for 6.2% of assets under management. After dumping over 4 million shares, it is now one of the firm's smallest holdings.
The final notable transaction I want to cover isPayPal (PYPL, Financial). To me, this is a great example of just how much views can differ on a particular stock. During the second quarter, both Mandel and Cooperman reduced their positions.
Mandel sold 4.4 million shares, while Cooperman dumped a couple thousand. While these two managers were selling, however, Pat Dorsey and Loeb were buying. Third Point acquired 10 million shares of the online payments processor throughout the second quarter. Meanwhile, Dorsey made PayPal his fourth-largest holding after Facebook, Dollar General (DG, Financial) and Alphabet (GOOG, Financial).
Disclosure: The author owns no stocks mentioned.
