The amount of data investors digest daily on Wall Street can sometimes feel overwhelming. Over the last six weeks, investors have navigated their way through earnings season, a Federal Reserve Open Market Committee meeting, and President Donald Trump's regularly changing tariff and trade policy. Suffice it to say, it can be easy for something important to fall through the cracks.
Arguably the most important data dump of the entire quarter occurred less than two weeks ago on May 15. This 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.
A 13F is filing that allows professional and everyday investors to see which stocks Wall Street's smartest money managers purchased and sold in the latest quarter. Even though 13Fs have their flaws -- since they're filed 45 days after the end to a quarter, they may contain stale data for active hedge funds -- they still provide invaluable clues as to which stocks and trends have the full attention of the market's leading asset managers.
While Warren Buffett is the most-followed of all money managers, he's far from the only billionaire investor known for their outsized returns. Billionaire Stanley Druckenmiller of Duquesne Family Office is also revered for his ability to spot a good deal.
Image source: Getty Images.
During the March-ended quarter, Druckenmiller was an active seller of stocks and quite the selective buyer. Duquesne's 13F shows he completely exited more than three dozen positions and reduced 18 more. In comparison, he opened just 12 new positions and added to 14 existing holdings.
Among these dozens of trades, two stand out. Specifically, Duquesne's billionaire chief completely exited his stake in one of Wall Street's hottest stock-split stocks and continued to pile into one of the stock market's most-promising drugmakers.
Stanley Druckenmiller just dumped one of Wall Street's preeminent stock-split stocks
Next to the evolution of artificial intelligence (AI), nothing has been a more intriguing trend for investors than companies announcing and completing stock splits.
A stock split allows a public company to alter its share price and outstanding share count while having no impact on its market cap or underlying operating performance. Most investors have been gravitating to businesses conducting forward splits, which are designed to reduce a company's share price to make it more nominally affordable for everyday investors who can't purchase fractional shares through their broker. Plus, companies whose share price has increased enough to warrant a forward split must be doing something right from an operating and innovation standpoint.
During the first quarter, Druckenmiller was a seller of one of Wall Street's most-esteemed stock-split stocks: cybersecurity colossus Palo Alto Networks(NASDAQ: PANW), which completed a 2-for-1 split in December. Duquesne's 13F shows the entirety of its 87,424-share position in Palo Alto was sold.
Simple profit-taking may explain this selling activity. All of Duquesne's stocks have an average holding period of less than nine months, which means its billionaire chief isn't shy about ringing the register.
However, valuation may have also played a role. Even with sustained double-digit earnings and sales growth, Palo Alto Networks is valued at an aggressive 60 times forecast earnings per share in 2025. Even amid a historically pricey stock market, Palo Alto is priced for perfection.
Thankfully, Palo Alto Networks has continued to deliver for its shareholders. Based on the company's fiscal third-quarter operating results (ended April 30), which were released last week, annual recurring revenue for its next-generation security solutions jumped 34% to $5.1 billion, and its total backlog of remaining performance obligations grew 19% to $13.5 billion from the prior-year period.
More than a half-decade ago, Palo Alto made the purposeful shift to a cloud-based (and now AI-supported) cybersecurity model. In the latest quarter, 80% of its net sales came from higher-margin subscriptions and support services, with only 20% from physical firewall products. Over time, more revenue has become recurring and tied to its high-margin subscription segment, which is a big reason why its stock has been steadily climbing.
The other factor working in Palo Alto Networks' favor is that cybersecurity has evolved into a basic necessity service. With businesses moving their data and that of their customers online and into the cloud at an accelerated pace, demand for cybersecurity solutions should be consistent in any economic climate.
Though it's possible Druckenmiller's sale proves prescient in the months to come, it's more likely Palo Alto Networks' stock continues its ascent when looking back in a few years' time.
Image source: Getty Images.
This might be Druckenmiller's favorite stock right now
On the other end of the spectrum is a stock Duquesne's billionaire chief hasn't stopped buying for three consecutive quarters -- and it's not a tech company. Following purchases of 1,427,950 shares in the third quarter and 7,569,450 shares in the fourth quarter, Druckenmiller added another 5,882,350 shares of drug giant Teva Pharmaceutical Industries(NYSE: TEVA) in the March-ended quarter.
Prior to 2024, Teva's shareholders navigated their way through nine generally painful years that were marred by the loss of exclusivity for blockbuster multiple sclerosis drug Copaxone, weaker generic-drug pricing, the overpayment of generic-drug company Actavis, and a seemingly endless parade of litigation. This included claims the company had to face regarding the role it played in the U.S. opioid crisis. On a peak-to-trough basis, Teva shares lost about 90% of their value.
But after a long winter, the sun appears to be shining on this brand-name and generic drug producer, once again.
The biggest shift for Teva has involved directing more of its capital and focus toward novel-drug development. Though brand-name drugs have finite periods of sales exclusivity, they generate notably higher margins and growth potential. For instance, tardive dyskinesia drug Austedo delivered 39% constant-currency sales growth in the March-ended quarter and is on pace for $2 billion in annual sales at the midpoint of current forecasts.
Secondly, Teva's executives have placed great emphasis on lowering costs and improving the company's financial flexibility. What began with turnaround specialist Kare Schultz, and has been continued with current CEO Richard Francis, is a meaningful pare-down of Teva's net debt via the sale of noncore assets and reduced operating costs. Shortly following the Actavis acquisition in the summer of 2016, Teva was buried under more than $35 billion in net debt. As of the end of March 2025, this net debt figure stood at less than $15 billion.
Another pivotal moment for Teva Pharmaceutical was putting its opioid litigation woes firmly in the rearview mirror. In early 2023, 48 of the 50 U.S. states approved Teva's $4.25 billion opioid settlement, which is to be spread over 13 years and includes up to $1.2 billion of Teva's generic version of Narcan, the opioid overdose reversal drug, being given to states. With no major litigation overhanging the company, its persistently depressed valuation multiple should be free to (finally) expand.
Lastly, billionaire Stanley Druckenmiller was likely attracted to Teva's deep-discount valuation. While the stock market entered 2025 at one of its priciest valuations in history, based on the S&P 500's Shiller price-to-earnings ratio, shares of Teva are valued at just 6.6 times forecast earnings per share in 2025.
Though Teva is unlikely to reintroduce a dividend anytime soon, it's delivered year-over-year sales growth for nine consecutive quarters and its focus on brand-name therapies is beginning to resonate with Wall Street.
Should you invest $1,000 in Palo Alto Networks right now?
Before you buy stock in Palo Alto Networks, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palo Alto Networks wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider whenNetflixmade this list on December 17, 2004... if you invested $1,000 at the time of our recommendation,you’d have $639,271!* Or when Nvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,you’d have $804,688!*
Now, it’s worth notingStock Advisor’s total average return is957% — a market-crushing outperformance compared to167%for the S&P 500. Don’t miss out on the latest top 10 list, available when you joinStock Advisor.
