Ed Lin
One of the largest pensions in the U.S. made major changes in its stock investments in the first quarter, including cutting a stake in one of the most iconic companies in its state.
State of Michigan Retirement System bought more Advanced Micro Devices stock, quintupled an investment in Peloton Interactive, tripled its Walmart stake, and sold General Motors stock. The pension disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
SMRS, as the pension is known, said it "doesn't discuss active investments or investment strategies." It has net assets of more than $108 billion, and is the 21st largest public pension in the U.S. by assets.
The pension bought 142,400 more AMD shares in the first quarter to lift its investment to 913,100 shares. AMD stock soared 22% in the first quarter compared with a 10% rise in the S&P 500; so far in the second, shares are down 13% compared with a 3% drop in the index.
A raft of unfavorable news for chips has eroded AMD stock this month. On April 2, Beijing told Chinese telecom carriers to phase out foreign technology, in a blow to AMD and Intel. A day later, an earthquake in Taiwan stoked worries that the chip-supply chain would be hampered. Some days this month, the tech sector faltered, and AMD stock found itself dragged down.
Peloton is having an even worse 2024. Shares dove 30% in the first quarter, and so far in the second, they have slid 26%.
Best known for its exercise bikes, Peloton warned in February that it would miss its full-year cash-flow target because of difficulty adding paid-app subscribers, coupled with "an uncertain macroeconomic outlook." The news sent shares down to what was then a record low. This month it dropped the unlimited free membership option to its app. Peloton reports fiscal-third-quarter results on May 2.
SMRS bought 480,000 additional Peloton shares to end the first quarter with 596,500 shares.
The pension bought 782,280 more Walmart shares in the first quarter to lift its stake to 1,172,800 shares of the retailer.
Walmart stock rose in February on a strong fourth-quarter report, which included news of a big dividend boost and confirmation it was buying smart TV maker Vizio. The Drucker Institute, part of Claremont Graduate University, recently listed Walmart as one of the top companies for financial strength in its Management Top 250 ranking.
Walmart stock gained 15% in the first quarter, and so far in the second it has slipped 2%.
GM stock surged 26% in the first quarter, and so far in the second shares are up 1%.
Shares of the auto maker soared in January on a strong fourth-quarter report and guidance. GM lifer and CEO Mary Barra told us in a March 1 feature, "Now we have our best portfolio of electric vehicles and internal-combustion-engine vehicles ever."
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.
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(END) Dow Jones Newswires
April 28, 2024 03:00 ET (07:00 GMT)
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