The Alaska Department of Revenue, which collects and invests the state’s public funds, recently made big changes in some of its biggest stock investments.
The agency slashed positions in chip maker Advanced Micro Devices (ticker: AMD ), retail giant Walmart (WMT), and wireless-services firm Verizon Communications (VZ), and scooped up shares of AT&T (T) in the second quarter. The department disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
The Department of Revenue didn’t respond to a request for comment. As of June 30, it managed $8.1 billion of US-traded securities.
The agency sold 83,108 AMD shares to end the second quarter with 389,055 shares. AMD stock tumbled 47% in the first half of the year, compared with a 21% drop in the S&P 500 index,
Shares are up 6.1% so far in the third quarter, while the index has tacked on 2.1%.
Rising Treasury yields and planned interest-rate increases by the Federal Reserve hammered AMD stock along with the rest of the tech sector early this year. AMD’s first quarter was strong. Although shares are in the red year to date, Wall Street remains upbeat on AMD’s prospects, and at least one analyst says the chip stock is the one to own in the event of a recession.
Walmart had a mixed performance in the last recession, but one retail analyst has the stock as a pick in the current environment because of the company’s reputation for value. In June, Walmart disclosed a stake in artificial-intelligence firm Symbiotic (SYM). Walmart and other big retailers are stuck with excess inventory now that shoppers have changed their behavior. Furniture, apparel, and workout equipment—heavily in demand during the depths of the pandemic—are now piling up.
Walmart stock slid 16% in the first half of the year, and so far in the third quarter it is up 6.2%. The Alaska Department of Revenue sold 72,999 Walmart shares to end June with 262,208 shares.
The agency sold 273,945 Verizon shares in the second quarter to cut its investment to 861,319 shares. Verizon stock has far outperformed the broader market by simply keeping losses to a minimum. Shares slipped 2.2% in the first half of the year, and so far in the third quarter, they are down 1%.
Warren Buffett’s Berkshire Hathaway ( BRKb ) disclosed in May that it slashed its Verizon stake. On June 20, Credit Suisse analyst Douglas Mitchelson trimmed Verizon’s target price to $58 from $60, lowered estimates, and kept a Neutral rating. “Verizon certainly seems to be impacted by increased competition in consumer wireless, likely seeing a drop in customers despite aggressive promotions, while the industry is still growing nearly as strong as overheated 2Q21 levels,” Mitchelson wrote in a report.
Mitchelson also rates AT&T stock at Neutral, with a $21 price target. AT&T shares rose 12.8% in the first half, adjusted for its April spinoff of WarnerMedia,
So far in the third quarter, AT&T stock has slipped 2%.
AT&T raised the prices of older wireless plans in June, and Chief Financial Officer Pascal Desroches recently suggested the company could raise rates again.
The Alaska Department of Revenue bought 597,735 additional AT&T shares to end the second quarter with 1.84 million shares.
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.
Credit: www.marketwatch.com /