Insurance giant American International Group cut investments in packaged-foods and beverage stocks General Mills, Coca-Cola, Campbell, and Spam maker Hormel.
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Insurance giant American International Group slashed positions in packaged foods and beverages in the third quarter. Not even the Spam was spared.
AIG (ticker: AIG) dramatically cut investments in General Mills (ticker: GIS), Coca-Cola (KO), Campbell Soup (CPB), and Spam maker Hormel Foods (HRL) in the third quarter. The insurer disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
AIG didn’t respond to a request for comment. Its U.S.-traded investments totaled $18.8 billion as of Sept. 30.
According to SEC filings, the sales are by far the sharpest reductions in these holdings AIG has made this year. General Mills, Coca-Cola, Campbell, and Hormel all underperformed the market in the first nine months of 2021, with a 1.7% gain, 4.3% drop, 13.5% drop, and 12% drop, respectively. For comparison, the S&P 500 index rose 15% in the first nine months. Interestingly, AIG stock itself left all those stocks and the index in the dust, surging 45% in that period.
It’s been a bit of a reversal so far in the fourth quarter. AIG stock is down 1%. Meanwhile, General Mills, Coca-Cola, Campbell, and Hormel are sporting respective gains of 8.3%, 7.3%, 3.2%, and 12%. The index is up 9.4%, setting a record on Friday.
AIG sold 2.4 million General Mills shares in the third quarter to end September with 212,670 shares. General Mills reported a strong fiscal first quarter near the end of September. It’s set to report fiscal-second-quarter earnings on Dec. 21 before the market opens. At the end of November, Credit Suisse analyst Robert Moskow wrote in a research report that General Mills sales were up 5% in the latest four weeks. He raised General Mills’ sales forecast but kept his earnings-per-share estimates unchanged “as we don’t yet know if the incremental sales are profitable.” Moscow also noted that dilution from the divestiture of Yoplait Europe “may offset the fundamental upside.”
The insurer sold 2.9 million Coca-Cola shares to end the third quarter with 11 million shares. Coca-Cola shares rose in late October after the company reported strong third-quarter earnings and raised estimates. At the beginning of November, Coca-Cola agreed to buy full control of sports drinks maker BodyArmor for $5.6 billion in cash. We suggested buying stocks including Coca-Cola’s based on the company’s ability to increase gross margins.
AIG sold 2.7 million Campbell shares to end September with 69,100 shares. Campbell reported strong fiscal-first-quarter earnings this month. Earlier this year, the soup giant faced some pessimism when Covid-19 restrictions were lifting, and consumers began to eat out more.
The insurer sold 345,800 Hormel shares to end the third quarter with 107,900 shares. Hormel announced around Thanksgiving that it was raising its annual dividend, its 56th straight year in doing so. Earlier this month, Hormel disclosed record sales in its fiscal-fourth-quarter report.
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.
