The Most-Sold Guru Stocks of t

In the fourth quarter of 2021, which ended on Dec. 31, a Santa Claus rally driven by higher-than-expected retail sales helped push U.S. stock indexes to new record highs. The S&P 500 surpassed 4,790, the Nasdaq 100 topped 16,570 and the Dow Jones Industrial Average beat the 36,480 mark.

In a previous article, I went over the most popular guru buys during the quarter. Now, let’s take a look at which stocks gurus were selling. According to GuruFocus’s Hot Picks, a feature which allows investors to screen for the stocks that had the most guru buys or sells in the most recent quarter, the five stocks that gurus were selling the most during the fourth quarter of 2021 (as determined by net sells) were Microsoft Corp. (MSFT, Financial) (37 sells, nine buys, 28 net sells), UnitedHealth Group Inc. (UNH, Financial) (28 sells, fiive buys, 23 net sells), Alphabet Inc. (GOOGL, Financial) (28 sells, 10 buys, 18 net sells), Berkshire Hathaway Inc. (BRK.B, Financial) (24 sells, eight buys, 16 net sells) and Wells Fargo & Co. (WFC, Financial) (24 sells, eight buys, 16 net sells).

Microsoft

Microsoft (MSFT, Financial) 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.

During the quarter, 37 gurus sold shares of Microsoft while nine gurus were buying shares, resulting in 28 net sells. As of the quarter’s end, the stock appeared in the portfolios of 57 gurus.

Sellers of the stock included
Catherine Wood (Trades, Portfolio) and
Chase Coleman (Trades, Portfolio), while buyers included
Murray Stahl (Trades, Portfolio) and
Ken Fisher (Trades, Portfolio). Gurus have been net sellers of the stock for the past couple of years:

The top guru shareholder is
Ken Fisher (Trades, Portfolio) with 0.36% of shares outstanding, followed by Primecap Management with 0.23% and Dodge & Cox with 0.13%.

The stock traded for an average price of $325.12 in the three months through the end of December. As of March 1, shares traded around $294.58 with a 52-week range of $224.26 to $349.67. The GF Value Line assigns the stock a rating of fairly valued.

Microsoft has proven itself to be a durable tech giant throughout the years, and it is transitioning more to the highly lucrative software-as-a-service (SaaS) model. Its cloud business has solid growth prospects. Gaming is mixed, with the company most recently trying to bolster this business by acquiring Activision Blizzard (ATVI, Financial). Investor concerns could stem partially from the unsustainability of Windows OEM revenue growth, which saw a great pull-forward due to the pandemic and has begun to slow down.

UnitedHealth Group

UnitedHealth Group (UNH, Financial) is a managed care company based in Minnetonka, Minnesota. The largest company of its kind by revenue, UnitedHealth offers a variety of health care products and insurance services through its many subsidiaries.

During the quarter, 28 gurus sold shares of UnitedHealth while five gurus were buying shares, resulting in 23 net sells. As of the quarter’s end, the stock appeared in the portfolios of 33 gurus.

Gurus who sold the stock included
Richard Pzena (Trades, Portfolio) and
Andreas Halvorsen (Trades, Portfolio), while buyers included
Mario Gabelli (Trades, Portfolio) and
David Rolfe (Trades, Portfolio). This bearish turn came after years of gurus mostly being neutral:

The Vangaurd Health Care Fund has the biggest stake among gurus with 0.73% of shares outstanding. Next is Dodge & Cox with 0.45%, then
Steve Mandel (Trades, Portfolio) with 0.24%.

The stock traded for an average price of $454.21 in the three months through the end of December. As of March 1, shares traded around $474.23 with a 52-week range of $332.67 to $509.23. The GF Value Line assigns the stock a rating of modestly overvalued.

UnitedHealth has been posting strong growth numbers and issuing equally strong guidance, with national health care spending and Medicare enrollment both expected to increase in the coming years. The selloff of its stock comes amid a broader health care sector selloff as investors worry about rising interest rates, an economic slowdown and lower spending related to Covid-19 care visits and hospitalizations.

Alphabet

Based in Mountain View, California, Alphabet (GOOGL, Financial) 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.

During the quarter, 28 gurus sold Alphabet’s voting shares while 10 gurus were buying shares, resulting in 18 net sells. As of the quarter’s end, the stock appeared in the portfolios of 47 gurus.

Lee Ainslie (Trades, Portfolio) and
Alan Fournier (Trades, Portfolio) were among those selling the stock during the quarter, while gurus such as
Robert Karr (Trades, Portfolio) and
Ron Baron (Trades, Portfolio) were buying shares. Gurus have been bearish on the stock this past couple of years:

The top guru shareholder of Alphabet’s voting shares is
Ken Fisher (Trades, Portfolio) with 0.29% of shares outstanding, followed by Primecap Management with 0.18% and
Spiros Segalas (Trades, Portfolio) with 0.07%.

The stock traded for an average price of $2,884.33 in the three months through the end of December. As of March 1, shares traded around $2,672.96 with a 52-week range of $1,994 to $3,030.9315. The GF Value Line assigns the stock a rating of fairly valued.

While Alphabet’s main source of revenue, advertising, remains in steady growth mode, investors are wary of the company’s move to reduce service fees at its Play Store from 30% to 15%. This move was made following the court ruling that Apple Inc. (AAPL) would have to allow developers to direct customers to outside payment methods, where Apple wouldn’t be able to take a cut of their earnings. This move will help reduce the number of developers who seek to bypass conducting transactions through the Play Store, though it will undeniably have a negative impact in the short term.

Berkshire Hathaway

Berkshire Hathaway (BRK.B, Financial) is the conglomerate headed by famous value investor
Warren Buffett (Trades, Portfolio) and his partner
Charlie Munger (Trades, Portfolio). The group owns a wide variety of businesses, including Geico and other insurance companies, Berkshire Hathaway Energy, BNSF and a sizable investment portfolio.

During the quarter, 24 gurus were selling Berkshire’s Class B shares while eight gurus were buying the stock, resulting in 16 net sells. As of the quarter’s end, the stock appeared in 39 gurus’ portfolios.

Those selling the stock included
Jeremy Grantham (Trades, Portfolio) and
Paul Tudor Jones (Trades, Portfolio), while
Jim Simons (Trades, Portfolio)’ Renaissance Technologies and
Joel Greenblatt (Trades, Portfolio) were among the buyers. Gurus have been net sellers of the stock this past couple of years:

Bill Gates (Trades, Portfolio)’ charitable foundation has the biggest holding among gurus with 1.51% of shares outstanding. The second-largest belongs to
Diamond Hill Capital (Trades, Portfolio) with 0.12% and the third-largest belongs to
Tom Russo (Trades, Portfolio) with 0.08%.

The stock traded for an average price of $286.71 in the three months through the end of December. As of March 1, shares traded around $316.74 with a 52-week range of $243.23 to $325.63. The GF Value Line assigns the stock a rating of significantly overvalued.

Buffett’s conglomerate has caught a lot of slack for not being particularly active in equity markets following the Covid-19 market selloff in 2020. Moreover, as Buffett grows older, investors are worrying about how the company will fare as he leaves more and more of the investing decisions to his portfolio managers. This is definitely a stock that carries a significant “key person risk,” even if the company itself doesn’t.

Wells Fargo

Wells Fargo (WFC, Financial) is a U.S. bank major headquartered in San Francisco. It is the fourth-largest bank in the U.S. by assets. Like its peers, the bank earns most of its revenue from loans and credit cards, though it is subject to an asset cap following its fake accounts scandal back in 2016.

During the quarter, 24 gurus were selling shares of Wells Fargo while eight were buying the stock, resulting in 16 net sells. As of the quarter’s end, 37 gurus owned shares of the stock.

The gurus selling the stock included
Francis Chou (Trades, Portfolio) and
Louis Moore Bacon (Trades, Portfolio), while those buying shares included
Ken Heebner (Trades, Portfolio) and Simons’ firm. Gurus were mostly bullish on Wells Fargo in 2020, but they became more bearish in 2021:

With 3.43% of shares outstanding, Dodge & Cox is the most significant guru shareholder of the company, followed by Primecap Management with 1.28% and
Chris Davis (Trades, Portfolio) with 0.99%.

The stock traded for an average price of $49.28 in the three months through the end of December. As of March 1, shares traded around $50.45 with a 52-week range of $36.34 to $60.30. The GF Value chart assigns the stock a rating of fairly valued.

Wells Fargo was a great stock to buy in 2020 as the market punished its valuation even more harshly than most peers thanks to its past issues with the fake accounts scandal. However, until the asset cap is removed, Wells Fargo’s upside potential will remain limited, so once the gap between the share price and the fair value was more or less closed, other banks became more attractive investment opportunities.