Michigan’s retirement system raised its investment in GE to 2.2 million shares.
Sebastien Bozon/AFP via Getty ImagesA big state pension made major changes in its U.S.-traded investments in the second quarter.
The State of Michigan Retirement System bought more General Electric (ticker: GE), Merck (MRK), and Intel stock (INTC) in the quarter, and sold most of its investment in biotech stock Gilead Sciences (GILD). The pension disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission.
The pension, which had U.S.-traded security assets of $11.4 billion at June 30, declined to comment on the transactions.
Michigan’s retirement system bought 133,564 more GE shares in the second quarter, raising its investment to 2.2 million shares.
GE stock has lost 43% of its value this year through Friday’s close. It has lost 6.3% in the third quarter alone, compared with an 8.1% rise in the S&P 500 index, a broad measure of the market.
The embattled conglomerate’s second quarter, reported in July, was weak, but GE did show impressive cash management. Last week, big GE investor Trian cut its stake in the company.
The pension bought 230,868 Merck shares to end June with 814,517 shares of the drug giant.
Merck stock still hasn’t recovered from a 15% dive in the first quarter, when the coronavirus pandemic roiled the markets. Despite a 4.8% rise in the third quarter, shares still sport a year-to-date drop of 11%.
Merck recently got a bit of a boost from strong second-quarter earnings. At least one analyst remains upbeat on shares, despite competition in immuno-oncology as patent expirations loom for Merck’s Keytruda.
Intel stock is also in the red year to date, down 19.7%, and nearly all of that drop comes from the third quarter so far.
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Shares of the chip giant dove after it disclosed production issues. Intel subsequently shook up its technology team, a move we think may be good for the company. Robert Swan, Intel’s CEO, disclosed recent purchases of the stock.
The state pension bought 324,024 more Intel shares in the second quarter, lifting its investment to 1.8 million shares.
Michigan’s retirement system slashed its investment in Gilead, selling 485,664 shares to end June with 320,260 shares of the biotech.
After posting gains of 15% and 3% in the first and second quarters, Gilead stock has slipped 9.9% in the third. Year to date, the shares are holding on to a 6.7% gain.
Gilead reported a disappointing second quarter at the end of July, sending shares lower. Nonetheless, at least one observer remains upbeat about sales for Gilead’s potential Covid-19 treatment.
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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