A Top Pension Bought Tesla and GM Stock, and Sold GE and Walmart Stock

A manager of one of the top-funded public pensions recently disclosed major changes in its investment portfolio.

The Tennessee Department of Treasury, which oversees the state’s financial operations, bought more Tesla (ticker: TSLA) and General Motors (GM) stock in the first quarter, while selling General Electric (GE) and Walmart (WMT) stock. The agency disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission.

The treasury department declined to comment on the stock trades. The agency manages $82 billion in assets, of which $53.4 billion is the market value of the Tennessee Consolidated Retirement System fund. The pension has been fully funded every year since 1972. TCRS, as the pension is known, is one of a handful of states’ pensions that are fully funded. A 2020 study by the Pew Charitable Trusts using 2018 data found that the average state pension was 70.7% funded, meaning having only 70.7 cents for every dollar of obligation.

The agency bought 67,648 shares of electric-vehicle giant Tesla to end the first quarter with 361,343 shares.

Tesla stock trailed the market in the first quarter, slipping 5.3% while the S&P 500 index rose 5.8%. So far in the second quarter through Friday’s close, shares have slipped 11.7%, while the index has gained 5.1%.

We’ve noted the weakness in Tesla stock might indicate that investors have sold and gone away. Sales in China, a key market for EV makers, have been falling. Tesla CEO Elon Musk recently hosted “Saturday Night Live,” but the laughs didn’t halt the stock’s slide. Last week, Musk tweeted that Telsa will no longer accept Bitcoin as a form of payment for vehicles, even though the company owns the equivalent of billions of dollars of the cryptocurrency.

Tennessee’s treasury department bought 736,231 GM shares, raising its holdings to 1.1 million as of the end of March.

GM stock soared 38% in the first quarter, and has slipped 2.5% so far in the second quarter.

GM’s first-quarter earnings were strong in the face of a chip shortage. Some investors were less comforted by the company’s outlook. GM recently announced an electric truck, and CEO Mary Barra has resumed automated stock sales—a bullish sign.

GE stock surged 21.6% in the first quarter, and has been gained 1% in April and May so far.

GE in April reported strong first-quarter earnings, but shares slipped as Wall Street sorted through the data. Shareholders recently registered their disappointment with the $73 million CEO Larry Culp took home last year.

Tennessee’s treasury department sold 858,479 GE shares to end the first quarter with 5.4 million.

The agency sold 674,566 Walmart shares to end March with 405,982.

Walmart stock slipped 5.8% in the first quarter, and so far in the second quarter, it has gained 2.7%.

Some analysts are questioning the strength of Walmart+, the company’s recently launched subscription service. Earlier this month, Walmart purchased health provider MeMD, and plans to offer nationwide health-care services. The retailer has been removing robots from its stores.

Ed Lin

source:barrons