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One of America’s largest public pensions has made big changes to some of its biggest investments.
In the second quarter, the Ohio State Teachers Retirement System nearly halved an investment in the chip maker
sophisticated micro devices
(ticker: AMD), and bought more shares of the semiconductor competitor
Intel
(
INTC
), telecommunications company
AT&T
(T), and coffee chain
Starbucks
(SBUX).
STRS Ohio, as the pension is known, disclosed the stock trades, among other things, in a form it filed with the Securities and Exchange Commission.
Ohio Pension did not respond to a request for comment. It managed $98 billion in assets as of June 30, 2021.
STRS Ohio sold 603,740 AMD shares to end the second quarter with 663,882 shares. The stock fell 47% in the first half of the year, compared with a 21% decline in
S&P 500 Index
.
So far in the third quarter, shares are up 24% and the index is up 9.1%.
A bill to subsidize the construction of US semiconductor factories, if signed by President Joe Biden, would not mean a quick fix for the industry in general or AMD in particular, because the company outsources production. We He named AMD CEO Lisa Su on the latest list of top CEOs and credited her with overseeing a 2021 sales increase of nearly 70%. Intel’s revenue was almost flat. At least one observer has noted that AMD has been taking market share from Intel recently.
Intel stock fell 27% in the first half. so far in the third quarter, shares are down 3.0%. Intel’s second-quarter earnings, reported last week, fell well short of expectations, sending shares lower. Investors were bracing for bad news in the face of falling PC sales, but they weren’t prepared for such a spectacular loss of earnings. Earlier this year, we recommended that Intel cut its dividend.
“Simply put, the $6 billion Intel has set aside annually to pay shareholders would be better used for R&D and growing or maintaining its capital-consuming investments,” we wrote.
The pension bought an additional 435,873 Intel shares to end the second quarter with 1.9 million shares.
STRS Ohio bought 392,845 more AT&T shares to increase its investment to 3.5 million shares. The stock gained 8.2% in the first half of the year, and so far in the third quarter shares are down 10%.
AT&T is leaner now than it has been in years, having exited the media in April
Discovery by Warner Bros
(WBD) in conjunction with Discovery. AT&T’s second-quarter report in July sent shares lower, but one analyst wrote that it “was really good,” citing strength in the company’s core businesses. AT&T’s chief financial officer has suggested the company may need to consider price increases.
Inflation this year has already seen Starbucks raise prices, even as famed CEO Howard Schultz returns for a third term at the company’s helm. We think the worst is already behind Starbucks, and we noted the stock’s best performance during Schultz’s last run as CEO.
Starbucks stock fell 35% in the first half of the year, and so far in the third quarter shares are up 11%.
STRS Ohio bought an additional 161,455 shares of Starbucks stock to end the second quarter with 738,559 shares.
The Inside Scoop is a regular Barron’s feature that covers stock trading by corporate executives and board members—so-called insiders—as well as major shareholders, politicians and other prominent figures. Due to insider trading status, these investors are required to disclose stock transactions with the Securities and Exchange Commission or other regulatory bodies.
Write to Ed Lin at edward.lin@barrons.com and follow up @BaronsEdLin.
