Billionaire investors are ditching Neflix, Johnson & Johnson and Celgene. Motley Fool writers Leo Sun, George Budwell and Cheryl Swanson discuss the reasons why.
Carl Icahn is selling Netflix, and has reduced his position from 10% to 3.7%. Netflix has risen365% since Icahn initiated his position in 2012, and perhaps he is just taking profits, but the stock has been volatile, and dropped 26% on a single day in October. For its declines the stock is still richly valued with a multiple of 100. It also faces challenges, as Time Warner and CBS give it a run for its money with streaming video.
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George Soros eliminated his position in Celgene in the third quarter after beginning it in the second quarter. The stock has risen 37% in the last year, and has a high price to earnings ratio of 23. However, Soros isn’t abandoning biotech; he recently purchased shares of AbbiVie
Warren Buffet has dramatically reduced his position in Johnson & Johnson. In 2007, Buffett owned 61 million shares, but now holds only 327, 000. This might be puzzling, since the company raised its earnings forecast three times in the last year and is seeing strong sales of its Hepatitis drug. Then again, the Oracle of Omaha may be right.