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THE MONEY IDEA💡
What the Pros Are Selling
Welcome, we are {{active_subscriber_count}} Money Masters and counting!
Wall Street’s best fund managers are not only buying but also trimming some of their biggest winners. Gathered by Morningstar experts, the latest filings reveal where professional investors are taking profits, cutting back exposure, or managing risk after a strong market run. Here is a closer look at the stocks they have been selling and what that means for everyday investors.
Let’s dive in.
The pros make us want the pen now.
THE MONEY IDEA💡
What the Pros Are Selling
Bottom Line: Microsoft continues to deliver stellar results in cloud and AI, yet managers are trimming to manage position sizes after massive outperformance.
Cloud Surge – Azure bookings rose 34% year over year, showing that enterprise demand for AI and hybrid cloud remains extraordinary.
Above Guidance – Cloud revenue climbed 39% as well, smashing guidance and cementing Microsoft as the clear category leader.
Margin Strength – Operating margins near 45% highlight the company’s ability to scale AI investments while protecting profitability.
Fair Value – Morningstar boosted its estimate to $600 per share, leaving shares undervalued despite recent strength.
Profit Taking – Trims reflect prudent risk control rather than any change to the long-term thesis.
Do This Next: Keep core exposure intact, but be patient and use volatility to add rather than buying into strength.
Bottom Line: iPhone and services growth remain robust, but with shares trading above fair value and tariff risk looming, trims are a tactical move.
iPhone Beat – June revenue jumped 10%, with iPhone 16 sales exceeding expectations by $5 billion in a single quarter.
Services Growth – Services revenue grew 13% to $27.4 billion, reinforcing Apple’s sticky ecosystem and recurring income streams.
Tariff Headwinds – Margins took an 80-basis-point hit from tariffs, and management warns the September quarter will see even more pressure.
Premium Valuation – Morningstar’s fair value was raised to $210, but shares still trade slightly above this target.
Future Risk – While Apple’s long-term story is intact, trade uncertainty and overvaluation create limited upside in the short run.
Do This Next: Trim profits into strength and prepare to re-enter on tariff-driven weakness that could reset expectations.
Bottom Line: Visa remains a dominant payments network, but with normalized cross-border growth and a valuation premium, managers are trimming to lock in gains.
Revenue Growth – Net revenue rose 14% year over year, underscoring healthy consumer and merchant spending trends worldwide.
Travel Normalization – Cross-border travel volumes have fully normalized, removing one of Visa’s strongest recent tailwinds.
Valuation Gap – Shares now trade 14% above Morningstar’s $306 fair value, leaving little margin of safety.
Margin Pressure – Operating margins slipped slightly, reflecting near-term investment spending and modest expense growth.
Macro Risks – Tariff uncertainty and potential consumer spending slowdowns are not reflected in today’s premium multiples.
Do This Next: Keep a core stake but rebalance exposure; add only if valuations retreat closer to fair value.
Bottom Line: Fund managers have been trimming Caterpillar, but with AI-driven power demand and strong backlogs, the stock still looks undervalued.
Earnings Mix – Construction and mining profit softened, but power solutions tied to data centers delivered strong growth.
Tariff Impact – Management estimated $1.3–$1.5B in 2025 tariff costs, but remains confident in levers to offset them.
Record Backlog – Backlog growth in construction and resources supports near-term stability despite macro jitters.
Fair Value – Morningstar raised its estimate to $477, leaving shares about 9% undervalued today.
AI Tailwind – Demand for power generation to fuel AI data centers is emerging as a durable growth driver.
Do This Next: Use trims from managers as opportunity; accumulate gradually while shares trade below intrinsic value.
Bottom Line: Sherwin’s pricing power remains impressive, but with slowing demand and shares trading 42% above fair value, managers are trimming to avoid overpaying.
Soft Sales – Revenue edged up just 1% as price hikes offset declines in consumer and coatings demand.
Guidance Cut – Management lowered full-year EPS guidance, citing weaker volumes and project delays across key markets.
DIY Weakness – Higher interest rates and fading residential construction continue to pressure customer demand.
Overvaluation – Shares now trade at one of the steepest premiums in the S&P 500 relative to Morningstar’s $258 fair value.
Trim Logic – Fund managers appear to be taking profits while demand softens and economic uncertainty lingers.
Do This Next: Avoid chasing the stock at current highs; wait for a reset in valuation before considering new exposure.
Why the fund managers are trimming Sherwin Williams.
ACTION PLAN✅
Let’s Make Money Today!
Quick Money: For instant diversification and volatility control, blend these picks with a broad-market ETF to keep exposure balanced.
$MSFT ( ▲ 0.87% ) – Hold; add selectively on dips if AI momentum continues to fuel margin expansion.
$AAPL ( ▼ 0.55% ) – Trim; re-enter at or below fair value if tariffs spark a near-term selloff.
$V ( ▲ 0.73% ) – Rebalance; maintain a core position but avoid buying at stretched premiums.
$CAT ( ▲ 0.44% ) – Buy ≤ $420; Has room for upside as AI-driven power demand offsets tariff costs.
$SHW ( ▲ 0.53% ) – Avoid new buys; wait for valuation to cool before committing capital.
If you’re looking for more smart, actionable ideas beyond this week’s picks, we’ve gathered a short list of other high-quality newsletters worth your time.
See our curated picks here — practical insights on money, work, and life from trusted sources.
QUOTE CORNER📄
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