Ed Lin
One of the first sovereign-wealth funds, and the largest at the state level in the U.S., just made a big bet on groceries as inflation continues to pressure American consumers.
Alaska Permanent Fund tripled its investments in shares of Walmart and Kroger -- the respective No. 1 and No. 2 players in terms of their share of the U.S. grocery market -- in the first quarter. The fund also bought more Ford Motor stock, and slashed a stake in Pfizer in the quarter.
It disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission. Alaska Permanent didn't offer a comment for this story. Created in 1980, it manages about $78 billion in assets, with about $27 billion of that in stocks.
The fund bought 22,400 more Walmart shares in the first quarter to lift its investment to 31,500 shares. Walmart stock soared 15% in the first quarter, compared with a 10% rise in the S&P 500 index. So far in the fourth quarter, shares are flat while the index is down 3%.
Strong earnings and news that Walmart was buying the smart-TV maker Vizio lifted the retailer's shares to a record intraday high of $61.66 in March. Although Walmart sells many things other than just food, its grocery sales in 2023 were more than twice Kroger's.
Kroger is trying to bulk up by buying Albertsons, a rival grocer, but the Federal Trade Commission has sued to block the deal. Kroger says the FTC's decision makes it more likely that America's consumers will face higher food prices and that there will be fewer grocery stores. Albertsons has said the combined company would be a stronger competitor against the grocery operations of Walmart, Amazon.com, and Costco Wholesale.
Kroger stock rose 25% in the first quarter, but so far in the second, shares are down 3%. Alaska Permanent bought 19,200 more Kroger shares to end the first quarter with 29,200 shares.
The fund bought 25,700 more Ford shares in the first quarter to lift its stake to 203,300 shares.
Ford earlier this month delayed the launch of its electric vehicle, though it has other EVs on the market, buying time for the consumer market for the cars to further develop. Barron's has noted that with EV growth on the wane, 2024 has so far been the year of the conventional vehicle.
Ford stock rose 9% in the first quarter, while it is down 5% so far in the second.
Pfizer stock slipped 3.6% in the first quarter, and has lost 7% since the end of March.
This month, the pharmaceutical company asked the Food and Drug Administration to expand the approval of its vaccine for respiratory syncytial virus to include all adults over the age of 18. A study of the drug in higher-risk 18- to 59-year-olds indicated it worked as well for them as for the adults 60 and over tested in a prior study.
Separately, the company could see a windfall of up to $3 billion from the sale of shares of Haleon, the Advil manufacturer formed in 2022 out of the former consumer-health divisions of Pfizer and GSK.
Alaska Permanent sold 89,000 Pfizer shares to end the first quarter with 16,700.
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.
Write to Ed Lin at edward.lin@barrons.com and follow @BarronsEdLin.
To subscribe to Barron's, visit http://www.barrons.com/subscribe
(END) Dow Jones Newswires
April 19, 2024 21:30 ET (01:30 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments