South Korea’s sovereign-wealth fund scooped up a large amount of General Electric stock in the second quarter, and sold Pfizer, GM, and Cisco stock.
Patrick Hertzog/AFP via Getty ImagesSouth Korea’s sovereign-wealth fund made some big changes in its U.S.-traded stock investments.
Korea Investment Corp. substantially increased its investment in General Electric (ticker: GE) stock, and sold shares of Pfizer (PFE), General Motors (GM), and Cisco Systems (CSCO). KIC, as the fund is known, disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission.
KIC, which managed $157.3 billion as of the end of 2019, didn’t respond to a request for comment.
The fund bought 3.3 million additional GE shares in the second quarter, raising its investment to 9.1 million shares.
GE stock has tumbled 40.8% so far in 2020, through Friday’s close, and that includes a 3.2% drop since the end of the second quarter. By comparison, the S&P 500 index, a measure of the broad market, is up 8.6% year to date, including a 13.2% gain so far in the third quarter.
GE’s latest quarterly earnings report in July was lackluster, but we liked the company’s management of its cash. A large investor in the company sold large blocks of GE stock earlier this month. GE extended CEO Larry Culp’s contract through August 2024.
KIC sold 1.4 million Pfizer shares to end the second quarter with 3.1 million shares of the drug giant.
Pfizer stock sports a year-to-date loss of 3.2% despite a 15.9% rise so far in the third quarter.
It was announced last week that Pfizer will be removed as a component of the Dow Jones Industrial Average before the start of trading Aug. 31. Pfizer is working on a Covid-19 vaccine that one observer thinks could be authorized by the Food and Drug Administration in October.
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GM stock has slumped 18% year to date, including a 18.7% surge in the third quarter.
Earlier this month, one bullish analyst suggested that GM could spin off its electric-vehicle division. Speaking of EVs, GM and Ford Motor (F) have one advantage over Tesla (TSLA): big profits from truck sales that can fund their development of EV technology.
KIC sold 526,139 GM shares to cut its investment to 2 million shares at he end of the second quarter.
The fund also sold 537,200 Cisco shares in the quarter, lowering its investment to 4.2 million shares of the network giant.
Cisco stock has slipped 12% year to date, including a 9.5% drop so far in the third quarter.
Disappointing guidance provided earlier this month overshadowed fiscal-fourth-quarter results, and Cisco stock reeled. Cisco’s status as a bellwether tech has slipped as more business moves to the cloud, The Wall Street Journal noted.
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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August 30, 2020 at 06:00PM
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A Huge Sovereign-Wealth Fund Made a Big Bet on GE Stock. Here’s What It Sold. - Barron's
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