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The manager of Tennessee’s state pension, one of the best funded in the country, added to positions in GM, Verizon, and Starbucks stock in the third quarter. It also sold AT&T stock.
Bill Pugliano/Getty Images
The manager of Tennessee’s state pension made major changes in some of its biggest investments.
Tennessee’s Treasury Department added to positions in
General Motors
(ticker: GM),
Verizon
Communications (VZ), and
Starbucks
(SBUX) stock in the third quarter. The agency also halved its
AT&T
(T) stock investment, according to disclosures filed with the Securities and Exchange Commission.
Tennessee Consolidated Retirement System (TCRS), which is commingled within the Tennessee Retiree Group Trust, is the largest fund managed by the state’s treasury. TCRS had a market value of $53.4 billion as of June 30.
A study of 2019 data conducted by the Pew Charitable Trusts showed that Tennessee’s state pension is one of the best-managed in the U.S. from a funding standpoint. The study found that the pension was 97.7% funded, which meant that it was short 2.3 cents for every dollar it owed. Only two state pensions had higher funded ratios, and the average among all states was 70.7%.
Tennessee’s treasury department didn’t respond to a request for comment on the stock trades.
The agency purchased 638,709 additional GM shares to end the third quarter with 1.07 million shares of the auto giant.
GM stock has soared 21.3% so far this year through Friday’s close, including a 50.1% leap so far in the fourth quarter. By comparison, the
S&P 500 index,
a broad measure of the market, has gained 14.5% year to date, including a 10.0% gain in the fourth quarter.
GM recently scaled back an agreement with
Nikola
(NKLA), a maker of alternative-fuel trucks. GM itself has been focusing on its development of electric vehicles. Barron’s has noted that GM CEO Mary Barra has suggested that the company could resume paying a dividend in the middle of next year.
The agency bought 1.14 million more Verizon shares to end September with 2.66 million shares of the media and communications firm.
Verizon stock is flat for the year to date, including a 3.5% gain so far in the fourth quarter.
Verizon’s latest analyst day focused on a 5G future for its wireless operations. J.P. Morgan upgraded Verizon stock in early November to Overweight from Neutral; shares are “both a very defensive stock at current levels and poised to grow as investors gain confidence in the acceleration of the business,” analyst Philip Cusick noted. Third-quarter earnings were strong.
Starbucks stock has tacked on 16.3% year to date, including a 19.0% surge so far in the fourth quarter.
The coffee giant reported strong earnings as locations reopened. The pandemic couldn’t stop the return of the Pumpkin Spice Latte, a comeback that lifted Starbucks sales. Stifel analyst Chris O’Cull has argued that Starbucks will be one of the bigger beneficiaries of a potential Covid-19 vaccine.
The state agency bought 126,966 more Starbucks shares to end September with 757,134 shares.
Tennessee’s Treasury Department sold 2.94 million AT&T shares in the third quarter, cutting its stake to 2 million shares.
AT&T stock has lost a quarter of its market value in 2020, but has eked out a 3.6% gain so far in the fourth quarter.
We noted that an analyst recently recommended selling AT&T stock and holding Verizon stock. AT&T Chief Financial Officer John Stephens will retire at the end of March, the company announced in mid-November. Stephens had been CFO since 2011. AT&T’s third-quarter earnings, reported in October, were lackluster.
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 edward.lin@barrons.com and follow @BarronsEdLin.