Alaska’s Department of Revenue, which invests public funds, reduced investments in Berkshire Hathaway and Oracle stock in the first quarter.
Andrew Harrer/Bloomberg
A major Alaskan agency recently made big changes in its largest stock investments.
Alaska’s Department of Revenue, which collects and invests public funds, cut back in Class B shares of Warren Buffett’s Berkshire Hathaway (ticker: Berkshire Hathaway ), and reduced its position in Oracle (ORCL) stock in the first quarter. The agency also increased investments in the three publicly traded wireless-tower stocks: American Tower REIT (AMT), Crown Castle International (CCI), and SBA Communications (SBAC) during the period. The trades, among others, were disclosed in a form the agency filed with the Securities and Exchange Commission.
The revenue department, which managed $9.2 billion in U.S.-traded assets as of March 31, didn’t respond to a request for comment on the stock trades.
The Alaska agency sold 27,627 Class B shares of Berkshire Hathaway to end the first quarter with 347,525 shares of Buffett’s firm.
Berkshire Hathaway stock underperformed the market last year, only managing a gain of 2.4% while the S&P 500 index surged 16.3%. In the first quarter, however, the shares surged 10.2%, compared with a 5.8% rise in the index. So far in April through Friday’s close, Berkshire Hathaway stock is up 6.5%, compared with the S&P 500’s 5.4% rise.
Souring on bank stocks excluding Bank of America (BAC) last year cost Berkshire Hathaway about $10 billion of upside in the subsequent rally, we reckon. Berkshire Hathaway disclosed in February that it had bought Verizon Communications (VZ) and Chevron (CVX) stock in the fourth quarter, among other trades. Buffett’s firm had also been buying back its own Class A shares. The stock repurchases continued through at least the first two months of 2021.
Alaska’s Department of Revenue sold 46,574 Oracle shares to end the first quarter with 456,927 shares of the software giant.
Oracle stock rose 22.1% last year, 8.5% in the first quarter, and has gained 12.5% so far in April.
One of our February cover stories noted that Oracle is becoming a cloud giant, but at least one observer doesn’t expect a quick transition. The company reported a strong fiscal third quarter in March, lifted its dividend, and expanded a stock-repurchase program.
The agency raised its investments by about 21% each in American Tower, Crown Castle, and SBA in the first quarter to 241,467 shares, 229,443 shares, and 60,145 shares, respectively.
The three tower stocks are in the same industry, but they don’t perform in sync, so it’s interesting to see the Alaska Department of Revenue evenly raise its sector bet across the shares. In 2020, SBA stock rose 17.1% while Crown Castle stock gained 12.0%, and American Tower stock slid 2.3%. In the first quarter, SBA was the laggard, with shares slipping 1.6% while Crown Castle and American Tower saw shares rise 8.1% and 6.5%, respectively. So far in April, Crown Castle stock has gained 4.4%, while shares of SBA and American Tower are up 3.9% and 4.0%, respectively.
Barron’s noted in January that Crown Castle and SBA seemed “particularly well positioned in the year to come.” We wrote that most of the leasing losses due to consolidation “are initially expected at American Tower, the largest tower player.” Last week, Verizon Communications (VZ) reached deals with Crown Castle and SBA to help prepare for the launch of 5G Ultra Wideband and fixed wireless broadband service on newly acquired spectrum. Raymond Jamea analyst Frank G. Louthan wrote in a report that he believes a master lease agreement “is also in the works” between Verizon and American Tower. Louthan has a Strong Buy rating on SBA stock, and Market Outperform ratings on Crown Castle and American Tower shares.
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.
