Generation Investment, which former vice president Al Gore co-founded, bought Alibaba, Airbnb, and Equifax stock, and sold most of its stake in Aptiv in the fourth quarter.
Qilai Shen/Bloomberg
Generation Investment Management, the investment firm co-founded and chaired by former vice president Al Gore, recently made some significant changes in its U.S.-traded stock investments.
Generation initiated investments in Alibaba Group Holding (ticker: BABA) and Airbnb (ABNB) stock, bought more shares of credit-reporting firm Equifax (EFX), and sold most of its holdings in auto-parts supplier Aptiv (APTV). The firm disclosed the stock trades in a form it filed with the Securities and Exchange Commission.
Generation, which had assets under management of $30.7 billion at the end of 2020, declined to comment on the investment changes.
The firm bought 1.5 million Alibaba American depositary receipts in the fourth quarter. It hadn’t owned any ADRs of the Chinese online giant at the end of the third quarter.
Alibaba ADRs rose 9.7% in 2020, and they are up 2.2% so far this year through Friday’s close. In comparison, the S&P 500 index, a broad measure of the market, rose 16.3% last year, and is up 1.5% so far in 2021.
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Alibaba got a boost earlier this month from strong fiscal-third-quarter earnings. Also in February, Ant Group, of which Alibaba owns a third, reached a deal with Chinese regulators that could clear a path to an initial public offering. Ant’s IPO had been suspended in November after Chinese President Xi Jinping reportedly personally scuttled it. Jack Ma, Alibaba’s co-founder and the controlling shareholder of Ant Group, had disappeared from public view for several months before reappearing in January.
Airbnb stock’s IPO was in December, and priced shares at $68 each. Generation bought 200,000 shares of the online platform for property rentals.
Airbnb stock more than doubled from its IPO price by the end of 2020, and so far in 2021, it is up 40.6%.
Aribnb stock surged after reporting its first quarter as a public company. Earlier this month one analyst downgraded Airbnb stock, and wrote that he “couldn’t justify” the lofty valuation of the shares. Airbnb’s successful IPO could nudge rivals to look at ways to unlock value.
Equifax stock soared 37.6% last year, but has slid 16.1% year to date.
Equifax’s fourth-quarter report earlier this month topped expectations, and Credit Suisse analyst Kevin McVeigh wrote in a research report that the company’s reintroduction of a share-buyback plan supports a bull thesis on the shares. McVeigh rates Equifax stock at Outperform with a $215 target price. Needham analyst Mayank Tandon, who also has a $215 target price, and a Buy rating on Equifax stock, wrote that HR services unit Equifax Workforce Solutions as “a strong tailwind for growth.”
Generation bought 3.6 million more Equifax shares in the fourth quarter to lift its holdings to 5.7 million shares.
The firm slashed its investment in Aptiv by more than three-fourths, selling 5.2 million shares in the quarter to end 2020 with 1.5 million shares.
Aptiv stock soared 37.2% in 2020, and year to date it is up 15.0%.
Aptiv supplies solutions for self-driving cars, a business that at least one analyst thinks investors are too bullish on. Aptiv recently formed a joint venture with Hyundai for autonomous vehicles.
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 [email protected] and follow @BarronsEdLin.
