An Apple watch. Hexavest of Montreal lowered investments in iPhone maker Apple, and banking giants Bank of America, JPMorgan Chase, and Citigroup.
Johannes Eisele/AFP via Getty ImagesA large contrarian investor made big moves in its U.S.-traded portfolio in the first quarter.
Hexavest of Montreal sold Apple (ticker: AAPL) stock, and slashed investments in Bank of America (BAC), JPMorgan Chase (JPM), and Citigroup (C). Hexavest disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission.
Hexavest, which is 49% owned by Eaton Vance, acquired by Morgan Stanley (MS) in March, didn’t respond to a request for comment on the stock trades. Hexavest has been seeing its managed assets shrink. As of Jan. 31, they stood at $4.3 billion, down 67% from $13 billion the year before, and down 26% from $5.8 billion on Oct. 31, 2020.
The firm sold 83,949 Apple shares in the first quarter, ending March with 504,131 shares of the iPhone maker.
Apple stock slid 8% in the first quarter, compared with a 5.8% rise in the S&P 500 index. Since March 31 through Friday’s close, however, Apple stock has surged 9.8%, while the index has managed a 5.4% rise.
We noted in March that one analyst thought Apple stock lacked catalysts, and that the valuation got ahead of earnings growth. Other observers fretted that sales of AirPods could slip. Last week, however, another analyst wrote in a report that Apple is “well-positioned to report upside to March quarter estimates.”
Hexavest sold 1.4 million Bank of America shares to end the first quarter with 596,714 shares of the banking giant.
Bank of America stock soared 27.6% in the first quarter, and has gained 1.1% so far in April.
Rising interest rates have benefitted the banking sector in general. CEO Brian Moynihan told Barron’s in an interview in March that Bank of America’s earnings will “substantially increase” from higher rates as the bank deploys its large base of low-cost deposits into higher-yielding loans and other assets while keeping expenses under control,
JPMorgan stock rallied 19.8% in the first quarter, and has been essentially flat in April.
JPMorgan’s last two quarters, reported in January and April, showed strong earnings, but shares slipped in their wakes. The first quarter, the bank’s latest, showed a record profit as JPMorgan released reserves for bad loans.
Hexavest sold 294,400 JPMorgan shares in the first quarter to reduce its holdings to 336,497 shares.
The investment firm sold 413,395 Citigroup shares in the quarter, leaving it with 171,808 shares of the bank.
Citigroup stock surged 18.0% in the first quarter, and so far in April, it has been flat.
Citigroup reported strong fourth-quarter earnings in January, and said it planned to resume stock buybacks in the first quarter. Last week, the bank reported upside first-quarter earnings, and said it is shutting down most of its consumer-banking operations in Asia, Europe, and the Middle East.
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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Contrarian Fund Sells Apple, Bank of America, JPMorgan, and Citigroup Stock - Barron's
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