Al Gore’s Firm Bought Cisco, Analog Devices, and Applied Materials. Here’s What It Sold.
Generation Investment initiated a position in Cisco stock, and increased investments in Analog Devices and Applied Materials stock in the third quarter.
Heiko Junge/AFP via Getty Images
The investment firm co-founded by former vice president Al Gore recently made some significant changes in its U.S.-traded stock investments.
Generation Investment Management has a new, big investment in networking giant Cisco Systems (ticker: CSCO), and also bought large amounts of Analog Devices stock (ADI) and Applied Materials (AMAT) in the third quarter. The firm also slashed its stake in Salesforce.com stock (CRM). Generation disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission.
Generation, which Gore serves as chairman, declined to comment on the stock trades.
The firm’s largest public fund under its management, Lombard Odier Funds-Generation Global, has recently made a comeback. The fund is now beating its benchmark, the MSCI World Index, with a gain of 1.04% for the year to date through Oct. 31, compared with the index’s drop of 1.42%. Generation Global is also beating the benchmark for every period. Three months ago, it was lagging behind the index for the year to date.
Generation disclosed it owned 18.4 million Cisco shares as of Sept. 30. It didn’t own any at the end of the second quarter.
Cisco stock has slumped 14.6% for the year to date through Friday’s close, but that includes a 4.0% rise so far in the fourth quarter. By comparison, the S&P 500 index, a broad measure of the market, has risen 10.1% so far this year, including a 5.8% gain so far in the fourth quarter.
Cisco’s recent rise came after the company’s strong fiscal-first-quarter report. In October, Cisco was ordered to pay up to $3.3 billion in damages in a patent-infringement case.
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Generation bought 3.1 million more shares of Analog Devices during the quarter, ending September with 5.8 million shares of the chip maker.
Analog Devices stock sports a year-to-date gain of 13.5%, buoyed by a 15.5% lift so far in the fourth quarter.
The company agreed in July to acquire Maxim Integrated Products (MXIM). Strength in its communications and industrial segments powered Analog Devices’ strong third quarter, reported in August.
Applied Materials stock has surged 25.7% year to date, including a 29.1% rise in October and November.
Fiscal-fourth-quarter earnings, reported in November, were strong, and we’ve noted that Applied Materials stock could represent a cheap growth play.
Generation bought 1.1 million more Applied Materials shares to end the third quarter with 5.3 million shares of the maker of chip-manufacturing gear.
The firm sold 512,480 Salesforce shares in the quarter to end September with 756,402 shares of the software giant.
Salesforce stock has jumped 58.7% so far this year, including a 2.7% gain so far in the fourth quarter.
Salesforces stock joined the Dow Jones Industrial Average as a component earlier this year, and earnings have been strong. Recently, at least one observer has turned bearish on Salesforce.
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.
