The largest U.S. public pension recently made major changes in some of its biggest stock investments.
California Public Employees' Retirement System cut an investment in engine supplier GE Aerospace, halved its stake in shares of electric-vehicle maker Tesla Motors, and bought more shares of telecom AT&T Inc and retailer Costco in the third quarter. Calpers, as the pension is known, disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
In response to a request for comment on the investment changes, the pension said in an email, "Calpers' global public equities are largely managed using quantitative and systematic investment approaches. Consequently, we generally do not comment on our individual holdings or trades." The pension manages more than $520 billion of assets, more than any other public pension in the U.S.
GE Aerospace stock has been on a tear since being formed after GE Vernova spun from it in April. On a pro forma basis, the shares surged 85% in the first nine months of 2024, compared with a 21% rise in the S&P 500. So far in the fourth quarter GE Aerospace stock is down about 4%, while the index is up 3.6%.
GE Aerospace reported strong third-quarter earnings. With the election of Donald Trump for his second term as president, the company's engine operations might not be affected by any potential tariff wars.
Calpers sold 718,713 GE Aerospace shares to cut its stake to 2 million shares at the end of the third quarter.
The pension sold 4.5 million Tesla shares in the third quarter to chop down its stake to 4.9 million shares.
Tesla stock eked out a 5.3% rise in the first nine months of 2024, and so far in the fourth quarter shares are up 34%.
Shares got a big boost with Trump's election win, as Tesla CEO Elon Musk was a vocal champion of the former and future president, and his policies. Analysts expect Trump to end purchase tax credits for EVs, but it isn't clear what effect this would have on Tesla's sales.
Meanwhile, Trump has tapped Robert F. Kennedy Jr. to be his secretary of Health and Human Services, and RFK's past attacks on both Wi-Fi and 5G don't bode well for AT&T stock. The company's third-quarter earnings topped expectations, but the top line came in light.
AT&T stock rose 31% in the first nine months of 2024, and so far in the fourth quarter shares are up 5.4%. Calpers bought 6.5 million more AT&T shares to end the third quarter with 29.5 million shares.
Costco stock rose 34% in the first three quarters of the year, and so far in the fourth shares are up 8.9%.
The retailer's sales growth eased in October, reflecting tempered demand after a September surge fueled by a port strike on the East Coast, and people preparing for Hurricane Helene. Costco has catered to buyers of precious metals by recently adding platinum bars to its offerings of gold bars and silver coins.
Calpers bought 329,107 more Costco shares to end the third quarter with 1.6 million shares.
Inside Scoop is a regular Barron's feature covering stock transactions by corporate executives and board members -- so-called insiders -- as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
