The largest public pension in the U.S. recently lowered positions in outperforming stocks in its portfolio.
The California Public Employees’ Retirement System sold shares of iPhone maker
Apple
(ticker: AAPL), chip giant
Intel
(INTC), and Chinese electric-vehicle makers
NIO
(NIO) and
Li Auto
(LI) in the first quarter. Calpers, as the pension is known, disclosed the stock trades in a form it filed with the Securities and Exchange Commission.
Calpers says it doesn’t comment on individual trades. It manages $455 billion in assets.
Apple stock soared 27% in the first quarter, compared with a 7% rise in the
S&P 500 index.
So far in the second, the shares are up 6.2% while the index has gained 2%.
Apple reported a strong fiscal second quarter earlier this month, lifting shares. Sales of iPhones were higher than expected. The company will be releasing a headset that includes virtual-reality capability. Apple stock and those of other giant tech companies have bolstered the S&P 500.
Calpers sold 7 million Apple shares in the first quarter to end March with 36.4 million shares.
Calpers sold 1.1 million Intel shares in the quarter to cut its stake to 9.8 million shares.
Intel stock didn’t get a sustained boost from a strong first-quarter-earnings report at the end of April. Intel Chief Financial Officer David Zinsner said the company was still facing a tough macro environment, but the general PC demand outlook was roughly in line with its expectations during the quarter. Intel earlier this month unveiled its strategy to win more chip-manufacturing business in its battle against
Taiwan Semiconductor Manufacturing
(TSM).
Intel stock soared 24% in the first quarter, and so far in the second shares are up 9.2%.
The American depositary receipts of Chinese EV makers NIO and Li Auto rose 7.8% and 22%, respectively, in the first quarter, and so far in the second the ADRs are down 23% and up 17%, respectively.
NIO’s underperformance compared with Li Auto isn’t surprising. In their recent fourth-quarter reports, NIO provided disappointing guidance in early March, while Li Auto topped expectations in late February. Also, Li Auto bested its rival in March auto sales, and then again in April.
But Calpers missed out on the second-quarter surge in Li Auto ADRs because it exited the position. The pension had owned 1.1 million Li Auto ADRs at the end of 2022, but by the end of March, it didn’t own any.
Calpers also cut its position in NIO, selling 390,806 ADRs to end March with 2.2 million.
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 [email protected] and follow @BarronsEdLin.
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