Select Billionaire Money Managers Are Selling a Stock-Split Stock That's Gained 214,000% Since Its IPO -- and They're Likely to Regret It

Globe and Mail

a day ago

There's nothing more valuable on Wall Street than data -- and there's rarely a shortage of it for investors. Between earnings season, which is a six-week period each quarter where most S&P 500 companies report their operating results, and near-daily economic reports from the federal government, it's easy for investors to be overwhelmed by the sheer amount of data they can comb through. It's also possible to overlook something important.
For instance, one of the most-telling data dumps of the entire quarter occurred less than four weeks ago, and it very well may have flown under the radar of most investors.
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May 15 was the deadline for institutional investors overseeing at least $100 million in assets under management to file Form 13F with the Securities and Exchange Commission. A 13F provides a concise snapshot of a fund's portfolio, which allows investors to see which stocks, exchange-traded funds (ETFs), and select options Wall Street's smartest money managers purchased and sold in the latest quarter.
Even though 13Fs are far from perfect -- e.g., since they're filed up to 45 calendar days following the end to a quarter, they can present stale data for active hedge funds -- they still offer a clear picture of which stocks and trends have the undivided attention of the market's best investors.
While most of the focus during 13F-filing season is placed on which stocks billionaire Warren Buffett is buying and selling, he's not the only billionaire asset manager who can make waves with his capital. During the March-ended quarter, select billionaires surprisingly sold shares of a sensational stock-split stock that's rallied more than 214,000% (on a total return basis) since its initial public offering (IPO).
Investors typically rally around companies enacting forward stock splits
A stock split is a tool publicly traded companies have at their disposal to make their shares more accessible to investors. However, stock splits are entirely cosmetic, with an adjustment to a company's share price and outstanding share count (by the same factor) not affecting its market cap or underlying operating performance.
Stock splits can adjust a company's share price one of two ways: up (reverse split) or down (forward split).
A reverse split is designed to increase a company's share price with a commensurate decrease in its outstanding share count. Most investors avoid this type of split because it's undertaken by struggling businesses whose stock is potentially in danger of being delisted from a major U.S. stock exchange.
In comparison, a forward stock split is completed by businesses wanting to make their shares more accessible to investors who can't purchase fractional shares through their broker. Companies that need to reduce their share price to make it more nominally affordable for everyday investors are, more often than not, leading their respective industry in terms of innovation and operating execution. This is the type of split that billionaire money managers and everyday investors typically flock to.
But as the latest round of 13F filings showed, even industry-leading businesses can get shown the door by billionaire fund managers.
Select billionaires have reduced their exposure to one of 2025's highest-flying stock-split stocks
Since 2025 began, only three preeminent businesses have announced and/or completed a forward stock split. Auto parts supplier O'Reilly Automotive was the largest on the basis of magnitude (15-for-1), and Interactive Brokers Group is readying to complete its first-ever forward split (4-for-1) next week.
But neither of these stock-split stocks holds a candle to wholesale industrial and construction supplies company Fastenal (NASDAQ: FAST), which has delivered a return in excess of 214,000%, including dividends paid, since its initial public offering (IPO) in 1987. The 2-for-1 forward split Fastenal completed after the close of trading on May 21 marked the ninth time in just 37 years the company's board has green-lit a stock split.
But before Fastenal officially announced that it would be splitting its stock for a ninth time, two billionaire fund managers were busy showing shares of the company to the door.
Billionaire Cliff Asness of AQR Capital Management oversaw the disposition of a third of his fund's stake in Fastenal (about 519,000 shares), while Israel Englander of Millennium Management dumped almost three-quarters of his fund's stake (roughly 203,000 shares). Take note that Millennium hedges a lot of its common stock positions with put and call options, which is the case here.
With Fastenal stock delivering a six-digit total return since 1987, simple profit-taking is one reason these fund managers may have willingly pressed the sell button. Asness and Englander oversee highly active funds that aren't shy about locking in profits.
But there's also the possibility these billionaire investors were concerned about Fastenal's valuation. Fastenal's forward price-to-earnings (P/E) ratio of 35 represents a 16% premium to its average forward P/E multiple over the trailing-five-year period. While it's possible this premium valuation will hinder the upside of its stock in the near-term, these billionaires are likely to regret their selling activity for two very important reasons.
On a macroeconomic basis, Fastenal is intricately tied to the health of the U.S. and global economy. Even though recessions are normal and inevitable aspects of the economic cycle, downturns tend to be short-lived and have averaged only 10 months since the end of World War II. With the typical period of economic growth lasting roughly five years since 1945, Fastenal's operations grow in lockstep with an expanding U.S. and global economy.
What's arguably even more important is that Fastenal has deepened its ties with many of America's leading industrial and construction companies. Its various managed inventory solutions, which includes on-site internet-connected vending machines and bins that help keep track of inventory, help businesses save money while educating Fastenal about the supply chain needs of its top clients. The bulk of Fastenal's net sales come from businesses it has close-knit relationships with.
This is not a stock-split stock I'd wager against being higher three-to-five years from now.
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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Interactive Brokers Group. The Motley Fool recommends the following options: long January 2027 $175 calls on Interactive Brokers Group and short January 2027 $185 calls on Interactive Brokers Group. The Motley Fool has a disclosure policy.