Billionaire Israel Englander Sold 40% of Millennium’s Stake in AT&T and Is Piling Into This Troubled Artificial Intelligence (AI) Stock Instead

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Investors are rarely ever at a loss for important data releases on Wall Street. Earnings season provides an onslaught of operating results for many of America’s most-important businesses, while economic data releases occur on an almost everyday basis from Monday through Friday. But every so often, one of these meaningful data dumps can slip through the cracks.

For instance, Aug. 14 marked the deadline for institutional investors with at least $100 million in assets under management to file Form 13F with the Securities and Exchange Commission — and there’s a chance you missed it. A 13F offers an under-the-hood look at which stocks Wall Street’s top-tier money managers purchased and sold in the latest quarter (in this instance, the Aug. 14 filings detailed trading activity for the June-ended quarter).

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Although Berkshire Hathaway‘s Warren Buffett is a favorite of investors, there are other billionaire money managers who make waves. One of these highly tracked billionaires is Israel Englander of Millennium Management, who as of the end of June was overseeing a nearly $216 billion investment portfolio spread across thousands of securities, including put and call options.

Despite running a very active hedge fund, a handful of trades stand out for Englander, including dumping an outperforming ultra-high-yield dividend stock, as well as piling into a troubled artificial intelligence (AI) company.

Among the thousands of positions Englander and his team have reduced, perhaps the one that raises the most eyebrows is the selling activity we’ve witnessed through the first six months of 2024 in telecom titan AT&T (NYSE: T). Despite shares of the company rallying by 49% on a total return basis (including its juicy 5% yield) over the trailing year, Englander has sent roughly 40% of his fund’s stake in AT&T (8,979,263 shares) to the chopping block this year.

Profit-taking represents one reason Millennium’s brightest investment minds have been pressing the sell button. It’s not often that AT&T delivers a nearly 50% total return on a trailing-12-month basis. While its forward price-to-earnings (P/E) ratio of 10 is still well below that of the benchmark S&P 500, it’s currently trading at a 24% premium to its average forward P/E multiple over the trailing-five-year period.

It’s also possible Englander and his advisors are concerned about an increase in legal expenses for AT&T. In July 2023, an investigative report from the Wall Street Journal suggested AT&T and other legacy telecom companies might incur financial liabilities tied to their use of lead-sheathed cables. Despite AT&T refuting these findings, there may be some degree of overhang or uncertainty that still exists.

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