Investors are rarely left at a loss as a result of major data releases on Wall Street. Earnings season brings a flurry of corporate results for many of America’s most important companies, with economic data released almost daily Monday through Friday. But every now and then, one of these meaningful data dumps can slip through the cracks.
For example, August 14 marked the deadline for institutional investors with at least $100 million in assets under management to file. Form 13F at the Securities and Exchange Commission – and chances are you missed it. A 13F provides an under-the-hood look at which stocks Wall Street’s top money managers bought and sold last quarter (in this case, the August 14 filings detailed trading activity for the quarter ending in June).
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Although Berkshire Hathaway‘S Warren Buffett is an investor favoriteare there other billionaire money managers making waves. One of these highly regarded billionaires is Israel Englander of Millennium Management, who at the end of June oversaw an investment portfolio of nearly $216 billion spread across thousands of securities, including put and call options.
Despite running a terribly active hedge fund, a handful of trades stand out for Englander, including dumping a high-performing ultra-high yield dividend stock and piling into a struggling artificial intelligence (AI) company.
Of the thousands of positions Englander and his team have cut, perhaps the one that raises the most eyebrows is the sales activity we’ve seen in the first six months of 2024 at the telecom titan. AT&T (NYSE:T). Despite the company’s shares being up 49% on a total return basis (including the juicy 5% yield) over the past year, Englander has roughly 40% of his fund’s stake in AT&T this year (8,979,263 shares) sent to the chopping block.
Profit taking is one of the reasons why Millennium’s brightest investing minds have hit the sell button. It’s not often that AT&T achieves a total return of almost 50% over a twelve-month period. Although the price-earnings ratio (P/E) of 10 is still well below that of the benchmark S&P500it is currently trading at a price of 24% premium to the average future price-earnings ratio over the past five years.
It’s also possible that Englander and his advisers are concerned about an increase in legal costs for AT&T. In July 2023, an investigation report from the Wall Street Journal suggested that AT&T and other legacy telecom companies could incur financial liabilities related to their use of lead-sheathed cables. Despite AT&T refuting these findings, there may still be some degree of overhang or uncertainty.