One of the largest public pensions in the U.S. recently made some major adjustments in its stock investments.
The State Teachers Retirement System of Ohio cut back on investments in Apple (ticker: AAPL) and Tesla stock (TSLA) in the third quarter, and bought more shares of General Motors (GM) and Alibaba Group Holding (BABA). STRS Ohio, as the pension is known, disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission.
STRS Ohio, which managed assets of $80.9 billion as of June 30, didnâ€™t respond to a request for comment on the stock trades.
The pension sold 864,478 post-split Apple shares in the third quarter to trim its position in the iPhone maker to 9.8 million shares as of Sept. 30. Apple stock split 4 for 1 at the end of August.
Apple shares have surged 80% year to date through Thursdayâ€™s close, including a 14% gain so far in the fourth quarter. By comparison, the S&P 500 index, a measure of the broader market, has risen 14.6% year to date, including a 10.1% so far in the fourth quarter.
Apple has been lifted by a recent report that demand for its 5G iPhones has been stronger than expected, and one analyst sees shares continuing their rally in 2021. There is speculation that Apple is actively developing a car, but weâ€™re skeptical of the companyâ€™s foray into electric vehicles. Still, weâ€™re upbeat on the stock, and Apple is one of our 10 top stock picks for next year.
STRS Ohio sold 41,987 post-split Tesla shares to end September with 316,583 shares of the electric-vehicle maker. Tesla stock split 5 for 1 at the end of August.
Teslaâ€™s stock price has rocketed nearly 700% in 2020, including a 54.3% surge in the fourth quarter alone.
Tesla joined the S&P 500 earlier this month, the most valuable company ever added to the index. Barry Ritholtz, chairman and chief investment officer of Ritholtz Wealth Management, recently told us, â€œTeslaâ€™s already shifted the paradigm. Theyâ€™ve already won.â€
GM stock has added 13.6% in 2020, including a 40.5% surge since the end of September.
GM last month scaled back an agreement with Nikola (NKLA), a maker of trucks powered by alternative fuels. Weâ€™ve suggested that GM stock could continue to rise in 2021 on earnings growth as the economy recovers. GM could even resume paying a dividend next year.
STRS Ohio bought 750,442 additional GM shares in the third quarter, raising its investment to 2.8 million shares of the auto giant.
The pension bought 46,700 American depositary receipts of Alibaba in the quarter, ending September with 205,434 ADRs of the Chinese internet giant.
Alibaba ADRs have gained 4.7% year to date, including a 24.5% drop so far in the fourth quarter.
Alibaba and peers have been pressured by Chinese regulators over their business practices. Also, Alibaba co-founder Jack Ma himself has faced a backlash in China. Also weighing on the ADRs is a potential delisting in the U.S.
Inside Scoop is a regular Barronâ€™s feature covering stock transactions by corporate executives and board membersâ€”so-called insidersâ€”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.