Big Contrarian Investor Sold Apple, Intel, and Microsoft Stock. Here’s What It Bought.
Hexavest of Montreal slashed each of its positions in Apple, Intel, and Microsoft stock, and initiated a small position in electric-vehicle firm Nio in the fourth quarter.
Mladen Antonov/AFP via Getty Images
A big contrarian investor recently made major changes in some of its largest investments.
Hexavest of Montreal slashed each of its positions in Apple (ticker: AAPL), Intel (INTC), and Microsoft (MSFT) stock by about a third, and initiated a relatively nominal stake in Chinese electric-vehicle maker Nio (NIO) in the fourth quarter. The firm disclosed the trades in a form it filed with the Securities and Exchange Commission.
Hexavest, which is 49%-owned by Eaton Vance (EV), didn’t respond to a request for comment on the stock trades.
In November, Eaton Vance noted in its fiscal-fourth-quarter report that net outflows at Hexavest surged to $6.2 billion for the fiscal year ended Oct. 31, compared with $1.6 billion the previous year. Hexavest’s managed assets have shrunk to $5.8 billion at Oct. 31 from $13.4 billion a year earlier.
Outflows have risen as the funds that Hexavest subadvises have lagged behind their benchmarks in recent years. Yet Hexavest is winning in the long term. Its strategies in global equities (developed markets) and international equities are topping their benchmarks since inception in 1999 and 1991, respectively.
Hexavest sold 276,772 Apple shares in the fourth quarter to lower its investment to 588,080 shares.
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Apple stock surged 80.8% in 2020—the top-performing component of the Dow Jones Industrial Average —and has slipped 4.2% so far in January through Friday’s close. By comparison, the S&P 500 index, a broad measure of the market, rose 16.3% in 2020, and has eked out a 0.3% gain in 2021.
Apple is seeing strong demand for the iPhone 12, but there has been persistent speculation that the company is developing a car. Wall Street analysts are raising price targets ahead of Apple’s next earnings report.
Hexavest sold 191,563 Intel shares in the fourth quarter to end 2020 with 388,516 shares of the chip giant.
Intel stock slid 16.8% last year, but so far in 2021 it is up 15.6%.
Intel announced last week that CEO Bob Swan was out, to be replaced by current VMware (VMW) CEO Pat Gelsinger effective Feb. 15. Intel stock tumbled in mid-2020 after the company said it was having continued issues in its manufacturing operations. Before the CEO replacement was announced, there was speculation that Intel would partner with Taiwan Semiconductor Manufacturing (TSM).
Microsoft stock rose 41.0% in 2020, and has slipped 4.4% so far this year.
Microsoft’s focus on cloud computing helped the company capitalize when office workers were relegated to working from home as the coronavirus pandemic spread. Shares of the software giant slid after the Georgia runoff elections sealed a Democratic majority in the Senate, as investors worry that upcoming legislation may not be friendly to Big Tech. Microsoft was one of the victims in a recent high-profile hacking incident.
Hexavest sold 226,489 Microsoft shares to end the fourth quarter with 473,111 shares.
The investment firm initiated a position in Chinese electric-vehicle maker Nio by buying 7,119 of its American depositary receipts.
Nio ADRs soared in value by more than 12 times in 2020, and have surged another 15.4% so far this year.
Nio ADRs slipped in December when a secondary offering was priced slightly below market, but shares rallied into the end of 2020 on seemingly unstoppable enthusiasm for EV stocks. Nio unveiled a luxury sedan in January, stoking more excitement for Nio ADRs.
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.
