DJ A Giant Foundation Buys GE and Amazon Stock, and Sells Microsoft and Apple -- Barrons.com
By Ed Lin
The London-based Wellcome Trust made some savvy financial moves in the final three months of 2018.
Two of the foundation's fourth-quarter stock purchases, General Electric (ticker: GE) and Amazon.com (AMZN), with respective gains of 14% and 8.6%, are outpacing the S&P 500 index's advance of 5.0% in January.
The executive behind these moves, Wellcome's Chief Investment Officer Nick Moakes, recently sounded a wary note about the effect Brexit is having on investing in the U.K. He told the Wall Street Journal in December that "[w]e're much better off looking for things elsewhere [in the world] where we have a clearer line of sight."
Wellcome, which funds biomedical and health research, had investment assets of GBP25.9 billion ($33.6 billion) as of the end of September, indicating it was bigger than any other foundation, apart from one, according to the George Soros-backed Open Society Foundations. The Bill and Melinda Gates Foundation had assets of $51.9 billion at the end of 2017.
Wellcome disclosed its fourth-quarter moves in a form filed last week to the Securities and Exchange Commission. The update shows that the trust trimmed its investment in the company that Bill Gates co-founded, Microsoft (MSFT), while also cutting back on Microsoft's historical rival, Apple (AAPL), and oilfield-services giant Schlumberger (SLB).
Wellcome didn't immediately respond to a request for comment on its fourth-quarter stock trades.
Microsoft stock had a banner fourth quarter. The company surpassed Apple to become the most valuable publicly traded firm in the world, and ended 2018 as the top tech performer in the Dow Jones Industrial Average. Nonetheless, Wellcome sold 470,000 Microsoft shares in the period, ending December with 6.03 million shares.
Wellcome also sold 265,000 Apple shares in the fourth quarter, reducing its holdings to 3.24 million shares. Apple was the first company to have a public market value that topped $1 trillion. But a disappointing forecast in November put the stock in tailspin, and Apple stock ended with a loss for the year. Barron's said in mid-December that Apple was one of our 10 stock picks for 2019. In early January, however, Apple lowered its financial guidance.
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Schlumberger's stock price was nearly cut in half in 2018, weighed down by sliding oil prices. This year, however, has seen the shares surge more than 20% amid optimism over growth at the company's international operations. Wellcome chose to slash its Schlumberger holdings in the fourth quarter, selling 1.4 million shares to end 2018 with 1.1 million shares.
GE's stock price was also cut in half last year. Wellcome increased its investment, buying 4 million more shares to end the year with 24 million shares of the embattled conglomerate. Bullish analysts and those that are bearish continue to face off on the company.
We noted earlier this month that a Wells Fargo analyst sees Amazon as one of a few stocks that shareholders could use to "play defense in a more-challenging environment." Wellcome took refuge in shares of the giant retailer in the fourth quarter, buying 120,000 shares. It had no Amazon stock at the end of the third quarter.
Amazon is a competitor with one of Wellcome's direct investments, privately held delivery-services provider Instacart, which had seen business surge after Amazon bought Whole Foods. In December, however, the delivery company said the Whole Foods-Instacart relationship would end. Amazon is building up its own grocery-delivery company.
Write to Ed Lin at edward.lin@barrons.com and follow @BarronsEdLin.
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January 23, 2019 06:59 ET (11:59 GMT)
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