The Tennessee Department of Treasury, which oversees the state’s pension, sold all its Apple and Amazon stock in the first quarter.
Photograph by Laurenz HeymannThe Tennessee Department of Treasury made some big changes in its stock investments in the first quarter, a period that was rocked by the coronavirus pandemic.
The treasury oversees all of the state’s investments of which the largest component is the state’s pension, the Tennessee Consolidated Retirement System. The pension, which had net assets of $52.1 billion as of June 30, 2019, is one of the best in the country, from a funding standpoint. A study by the Pew Charitable Trusts using 2017 data showed that Tennessee’s pension was 96.5% funded—that is, short 3.5 cents for every dollar of liability. The average state pension was 31 cents short.
The Department of Treasury sold all its Apple (ticker: AAPL) and Amazon. com stock (AMZN) in the first quarter. The pension manager also slashed its position in Walt Disney (DIS), and bought General Electric stock (GE). It disclosed the stock trades, among others, in a form the agency filed with the Securities and Exchange Commission.
The state’s treasury owned 2.4 million Apple shares at the end of 2019, but sold them all by March 31.
Apple stock has surged 25.4% so far in the second quarter through Friday’s close, topping the 14.3% rise in the S&P 500 index, a broad measure of the market. Apple has more than erased a 13.4% drop in the first quarter.
The iPhone maker has once again been caught in trade tensions between the U.S. and China. Nonetheless, Apple has persisted in boosting its streaming capabilities.
Amazon stock has also seen a second-quarter lift, rising 25.0% after a 5.5% rise in the first.
Amazon recently disclosed that it is developing its own Covid-19 testing capabilities. Even as the coronavirus pandemic continues, Amazon stock has benefited from investors buying up stay-at-home stocks.
Tennessee’s treasury sold 257,098 Amazon shares in the first quarter to end the period with none.
It also sold 393,949 shares of media and entertainment giant Disney, reducing the treasury’s investment to 1 million shares.
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Disney stock has rallied 22.2% so far in the second quarter, but remains in the red for the year after the first quarter’s 33.2% plunge.
Most of Disney’s theme parks remain closed, but Shanghai Disneyland recently reopened. The head of the company’s streaming unit Disney+ has just decamped for an executive position with the Chinese company that operates video platform TikTok.
The treasury also bought 919,230 GE shares in the first quarter to raise its stake in the embattled manufacturing giant to 3 million shares.
GE stock has slid 19.3% so far in the second quarter, following a 28.9% drop in the first.
Shares have slid in May to lows not seen in decades. GE has been hammered by a number of factors in the coronavirus era. There’s less demand for its jet engines when airlines are struggling. Also, low interest rates and slower economic growth are hurting GE Capital and Power business units. However, some observers remain bullish on GE stock.
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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May 24, 2020 at 07:00PM
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A Top Pension Manager Sold Apple, Amazon and Disney Stock - Barron's
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