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Big Pension Sells GM and Nvidia Stock. It Bought Ford and Intel
By: Barron's | April 25, 2022

Alabama’s pension has made some intra-sector trades among its bigger investments.

Retirement Systems of Alabama slashed an investment in General Motors (ticker: GM) and bought Ford Motor (F) stock, and sold Nvidia (NVDA) shares while buying more Intel (INTC) stock.

RSA, as the pension is known, disclosed the trades in a form it filed with the Securities and Exchange Commission.

The pension didn’t respond to a request for comment. RSA managed total assets of $52.3 billion as of Sept. 30, according to its latest annual report.

RSA sold 369,643 GM shares to end the first quarter with 1.3 million shares. GM stock tumbled 25% in the first quarter, compared with a 5% drop in the S&P 500 index. So far in the second quarter, shares are down 9%, compared with a 5.7% slip in the index.

GM and Ford were both hit with a number of downgrades in the first quarter by analysts worried that profits were peaking. The pessimism may have weighed more on GM because the company didn’t reinstate paying a dividend, as Ford did. As GM stock slumped, one prominent director bought up shares.

Ford has seen insider buying from Executive Chair Bill Ford, great-grandson of company founder Henry Ford. Shares slid 19% in the first quarter; so far in the second, they have dropped 10%.

Ford has been focused on electric vehicles, and we’ve noted that the company now has three lines of businesses: EVs, legacy vehicles, and vehicles and services for commercial customers. We think the launch of the all-electric F-150 Lightning pickup truck is about as consequential as the Model T’s introduction.

The pension bought 1 million Ford shares in the first quarter, raising its investment to 4.3 million shares. In fact, RSA was selling GM stock and buying Ford stock in the fourth quarter, as well; the pension also halved a position in Intel.

Alabama’s pension reversed course a bit in the first quarter, buying 393,283 Intel shares to lift its investment to 1.7 million shares of the chip giant. Intel stock slipped 3.8% in the first quarte; so far in the second, it is down 6.1%.

Like GM and Ford, Intel saw first-quarter insider buys. CEO Pat Gelsinger and Chairman Omar Ishrak bought stock in February, following up on late 2021 stock purchases. Gelsinger has said Intel stock can be the market’s “next great growth story.” Intel’s merger-and-acquisition moves include filing for an initial public offering of autonomous-vehicle unit Mobileye, and buying software company Granulate Cloud Solutions.

Nvidia surpassed Intel two years ago to become the most valuable U.S. chip maker, but we think signs show Nvidia could be the next tech casualty. There are already signs of slowing chip demand even while the supply chain remains constrained.

Nvidia stock slipped 7.2% in the first quarter; so far in the second, shares have plunged 28%. RSA sold 140,648 Nvidia shares in the first quarter to trim its investment to 1.1 million shares.

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