Wellcome Trust, one of the world’s largest charities, bought more Visa stock.
Dreamstime
One of the biggest charitable trusts in the world made a big bet on card networks and doughnuts late last year.
Wellcome Trust added to its investment in Visa (ticker: V) stock, and initiated positions in Mastercard (MA) and Krispy Kreme ( DNUT
) stock, while selling all its Keurig Dr Pepper (KDP) stock in the fourth quarter. The charity disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
Wellcome, which manages a portfolio valued at $52 billion, declined to comment on the investment changes. Focused on health issues, Wellcome is known for its early warning that Covid-19 was going to be a severe pandemic.
The charity bought 730,000 additional Visa shares to increase its investment to 2.4 million shares. The stock ended 2021 down 1%, compared with a 27% rise in the S&P 500 index. So far this year, shares are up 5.4% while the index is down 5.6%.
We are bullish on Visa stock for 2022 after the lackluster performance of its shares last year, and the company is one of our top picks. Strong earnings reported at the end of January give us even more confidence in our opinion. “The pandemic has accelerated the adoption of digital payments,” Vasant Prabhu, Visa’s chief financial officer, told Barron’s.
Shares of Visa and peer Mastercard slumped as the Omicron variant roiled travel plans late last year. Mastercard stock ended 2021 flat; so far in 2022, shares are up 6.4%. Wellcome bought 193,000 Mastercard shares in the fourth quarter; at the end of the third, it hadn’t owned any.
Though Mastercard isn’t one of our top picks, Barron’s has been bullish on the shares. Like Visa, Mastercard reported strong earnings near the end of January, although the reaction was relatively muted.
Wellcome bought 1.6 million Krispy Kreme shares in the fourth quarter, and the new investment in the doughnut maker is interesting for a charity focused on healthcare.
Krispy Kreme’s initial public offering was in July 2021, and priced shares at $17 each. Shares surged 24% on their first day of trading, but in ensuing months Wall Street and investors were less sweet on the stock, which ended 2021 with an 11% gain from the IPO price. Shares have been dunked so far in 2022, tumbling 24%, and now ended Friday at $14.45, below the original $17 offer price, what market experts call a broken IPO.
Meanwhile, the charity sold all its 3.6 million Keurig Dr Pepper shares in the fourth quarter.
Keurig Dr Pepper stock underperformed the market in 2021, but it did rise 15%. So far this year, shares are up 3.7%. In late October, Credit Suisse analyst Theo Brito noted that Keurig Dr Pepper had less room for error in the face of inflation and slowing coffee-system sales. He wrote that “uncertainty around topline growth sustainability and earnings power keeps us on [the] sidelines.” His rating on the shares was Neutral with a $33 target price.
But Keurig Dr Pepper stock came up in our latest Barron’s Roundtable, in a positive light. David Giroux of T. Rowe Price said the company “is my favorite consumer staple,” and that it owned “some of the best brands in carbonated soft drinks.” Giroux also thinks it could join the S&P 500 in two years.
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.
