Each week, we unpack the latest high-conviction trades from legendary investors — revealing what they’re doubling down on, cutting loose, or quietly walking away from.
In the most recent quarter, Terry Smith reduced or trimmed several notable positions in his portfolio. The steepest percentage declines point to stocks that may no longer meet his “buy good companies, don’t overpay, do nothing” philosophy — whether due to valuation concerns, sector risks, or changes in business quality.
Here are the top five reductions by percentage:
1. Equifax Inc (EFX) – ↓35.18%
Smith slashed his position in Equifax by over 127,000 shares, a notable cut in the credit reporting company. This may reflect concerns about the competitive landscape in data analytics or tighter IT security scrutiny following past breaches.
2. Mastercard Inc (MA) – ↓22.77%
Despite its wide moat and strong cash flow generation, Mastercard saw a 22.77% reduction. This might indicate valuation discipline in the face of elevated multiples or a rebalancing away from payment processors after strong performance.
3. Home Depot Inc (HD) – ↓21.22%
A 21% trim in Home Depot suggests caution around consumer discretionary spending or housing-related exposure. It may also signal profit-taking after a long run-up in the home improvement sector.
4. Verisk Analytics Inc (VRSK) – ↓20.84%
Verisk, a data analytics provider to insurance and energy firms, saw a sizable cut. Smith may be reassessing growth prospects or shifting capital to higher-conviction ideas with more upside potential.
5. Meta Platforms Inc (META) – ↓14.85%
The nearly 15% sale of Meta shares—despite strong AI-driven momentum—could reflect valuation caution or skepticism about ad market cyclicality and long-term margins in the metaverse segment.
Our Interpretation of the Sales Strategy
Terry Smith’s top reductions suggest a mix of profit-taking and selective pruning of positions that may have outpaced their intrinsic value. Known for his quality-first approach, these sales are unlikely to be panic-driven — but rather calculated, valuation-aware adjustments to maintain discipline in a concentrated portfolio. In a market still pricing in optimism, Smith’s moves serve as a quiet reminder of the importance of trimming when quality meets price exuberance.
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