Apple stock slipped 13.4% in the first quarter, but it has rebounded 17% in the second.
Photograph by JOSH EDELSON/AFP via Getty ImagesThe asset-management arm of Canadian banking giant Canadian Imperial Bank of Commerce made some material adjustments to its stock investments in the volatile first quarter.
CIBC Asset Management, or CAM, bought Apple (ticker: AAPL) and Microsoft stock (MSFT) in the quarter, and halved its holdings in Gilead Sciences shares (GILD). The bank disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission.
CAM, whose U.S.-traded equities totaled $14.1 billion at March 31, may buy even more Apple and Microsoft, according to one of its equity managers.
Apple stock slipped 13.4% in the first quarter, but it has rebounded in the second with a 17% rise. In comparison, the S&P 500 index, a measure of the broader market, slid 20% in the first quarter, and is up 11% since March 31.
The iPhone maker reported on April 30 a strong fiscal second quarter, and lifted its dividend and increased its stock-buyback plan.
CAM bought 113,806 additional Apple shares in the first quarter, lifting its investment to 761,770 shares.
In an interview, Jonathan Mzengeza, an equity research analyst and CAM’s technology sector expert, praised Apple’s strong franchise, balance sheet and cash position. Mzengeza, who co-manages science and technology mandates in CIBC’s global equity funds, also noted that Apple’s app store has probably benefited from more office workers stranded at home.
The bank also added 165,651 Microsoft shares to end the first quarter with 1.6 million of the software giant’s shares.
Microsoft stock ended the first quarter flat, but in the second it has gained 14.6%. Fiscal-third-quarter earnings were strong, and we noted that many on Wall Street were upbeat on the shares. Microsoft Teams, its unified communications product, is doing well among those working and schooling remotely.
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Mzengeza said Microsoft offers productivity tools that benefited from tailwinds as homebound white-collar workers acclimated themselves to handling tasks remotely. He also pointed to Microsoft’s strong cloud-computing operations as another area of strength.
Asked whether CAM would be buying more Apple and Microsoft stock in the near future, Mzengeza said, “We probably will be.”
Gilead stock gained 15.1% in the first quarter but only 5.9% in the second. Gilead rose earlier this year on speculation that it could come up with a treatment for Covid-19, although the degree of its rise confounded analysts. Remdesivir, the Gilead antiviral, received emergency-use authorization on Friday from the Food and Drug Administration to treat Covid-19 patients.
CIBC sold 283,255 Gilead shares in the first quarter, lowering its stake to 266,761 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.
Write to Ed Lin at edward.lin@barrons.com and follow @BarronsEdLin.
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