The investment firm co-founded and chaired by former Vice President
Al Gore
made significant changes in its U.S.-traded investments.
Generation Investment Management, a pure-play sustainable investment manager, bought more shares of the semiconductor-equipment maker
Applied Materials
(ticker: AMAT) in the second quarter. It reduced its investments in the cloud-based software firm
Salesforce
(CRM), the payments company
Mastercard
(MA), and brokerage
Charles Schwab
(SCHW). Generation disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
Generation declined to comment on its investment changes. As of June 30, it had assets under management of $34 billion.
Generation bought 943,951 more Applied Materials shares to end the second quarter with 8.4 million.
“Applied Materials…is in pole position to benefit from generative AI,” Miguel Nogales and Mark Ferguson, Generation’s co-chief investment officers, said in a July letter. “The second quarter of 2023 will be remembered as the period when AI truly entered the public consciousness. Everyone has heard of it. Millions of people now use ChatGPT, the most popular bot, on a daily basis. The technology holds great promise—though at this stage it is hard to see where value will durably accrue.”
Last week, Applied Materials reported a strong fiscal third quarter.
Applied Materials stock surged 48% in the first half of 2023, compared with a 16% rise in the
S&P 500
index. So far in the third quarter, shares have slipped 1.3% while the index has slipped 1.8%. The stock still hasn’t fully recovered from last year’s 38% plunge.
Salesforce stock also hasn’t fully bounced back from a 48% decline in 2022. Shares rose 59% in the first half of 2023, and are down 3% so far in the third quarter.
Salesforce fended off activist investor Elliott Investment Management, which had planned to nominate its own directors to the company’s board. At the end of May, the company reported strong first-quarter earnings, and raised its financial guidance. Investors cheered in July when the company announced its first price increases in years. Salesforce will report second-quarter earnings after the market closes Aug. 30.
Generation sold 620,991 Salesforce shares to end June with 1.8 million .
The firm sold 346,996 Mastercard shares in the second quarter to end the period with 1.4 million.
Mastercard stock rose 13% in the first half of 2023. So far in the third quarter, shares are flat following a 3% decline last year.
Mastercard’s earnings reports this year have been strong, helping the stock rise to a record intraday high of $405.19 on July 27, the day it reported second-quarter numbers. Consumer spending has remained strong despite inflation and rising rates. Barron’s believes Mastercard stock, and that of rival Visa (V), may be undervalued.
Schwab stock also was a safe port in 2022, slipping only 1%, but shares have lost some footing this year. The stock dropped 32% in the first half, while so far in the third quarter, shares are up 5%.
Shares tumbled in March when regional banks swooned, but Schwab insiders bought up the beaten-down stock. Earnings this year have been strong. CEO Walt Bettinger said in July that the company’s strengths have been obscured by the turmoil in banking.
Generation sold 2.3 million Schwab shares in the second quarter to cut its investment to 9.3 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.
Write to Ed Lin at [email protected] and follow @BarronsEdLin.
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