Alabama Pensions Sold AT&T and FedEx Stock. Walmart bought it.
Photograph by Patrick T. Fallon / Bloomberg
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Retirement Systems of Alabama made some bold stocks in the second quarter.
RSA, as the pension plan is known, slashed its investments in
AT&T
(ticker: T),
General motors
(GM), and
FedEx
bearing (FDX) while adding its position in
Walmart
(WMT). Two of these trades beat the market.
The plan, which includes the Teacher's Retirement System of Alabama (TRS), the Alabama Retirement System (ERS), and the Law Pension Fund (JRF), is not & # 39; t free of problems. As of September 30, 2017, the date of RSA's latest actuarial valuation, funding was significantly reduced.
Assets accounted for 68.9% of debt for TRS, 67.8% for ERS and 65.4% for JRF. But these levels have been steadily increasing since September 30, 2012, when they stood at 66.5% for TRS, 65.7% for ERS and 61.6% for JRF.
For the fiscal year ended September 30, 2018, RSA managed total assets of around $ 43.8 billion. More than half of it was invested in domestic shares, which returned 17.71%, 17.75% and 17.27% for TRS, ERS and JRF, respectively. These numbers are just shy of
S&P 500
17.9% return.
RSA did not respond to a request for comment on its shares.
Selling AT&T stock seems to have been a good move. RSA sold 1.1 million shares in the telecom and media giant in the second quarter, reducing its investment to 3.4 million shares. Since the end of June, the AT&T share has fallen 2.1% compared to an increase of 1.2% in the S&P 500.
Barrons has noted a suggestion that AT & T to sell the DirecTV to
Dish Network
(Washing).
RSA almost broke its investment in GM shares in half in the second quarter. It sold 541,927 shares by the car manufacturer in June with 615 146 shares. The GM stock has gained 2.5% since the end of the second quarter, peaked S & P 500.
Barrons has high respect for GM's CEO Mary Barra, who has doubled earnings per share in the company.
The FedEx share has gone over the S & P 500 since the end of the second quarter, with a 1.8% increase. Nevertheless, the shares have an annual gain of only 3.6% compared to 18.7% for the index. The inventory of the logistics company has been hampered by disappointing earnings and uneven financial forecasts this year.
FedEx shares come out of a 35% drubbing in 2018. Management issued disappointing financial guidance and investors were concerned that
Amazon.com
(AMZN) would launch its own airline. Last year FedEx dropped Amazon as a customer. RSA sold 111,515 FedEx shares in the second quarter, reducing its investment to 145,593 shares.
The shares in Walmart also outperformed the S & P 500 so far in the third quarter, an increase of 3.1% since the end of June. The Walmart share has risen 22.3% so far in 2019, setting a record intraday high of $ 115.49 this past Tuesday. The shares have more than eliminated the 2018 5.6% decline.
We have noted that Street is concerned with the reseller's strategy of online sales. RSA raised on the Walmart share in the second quarter, and bought another 133,465 shares until the end of June with 1.2 million shares.
Inside Scoop is a common Barron feature that covers stock contracts by business executives and board members – so-called insiders – as well as major shareholders, politicians and other prominent figures. Due to their insider status, these investors are required to provide shares with the Securities and Exchange Commission or other regulatory groups. [19659000] Write to Ed Lin at edward.lin@barrons.com and follow @BarronsEdLin .
