A large firm that specializes in low-volatility equity strategies recently made major changes in its investments.
Gateway Investment Advisers initiated a position in
(ticker: (TSLA)) stock, materially raised an investment in
American Tower REIT
(AMT) shares, and cut back on holdings in
(C) and Exxon Mobil (XOM) in the fourth quarter. Gateway disclosed the trades in a form it filed with the Securities and Exchange Commission.
“These trades were part of a routine rebalancing and are not reflective of any forward-looking assessment of individual companies,” Gateway said in response to a request for comment. The firm managed $9.6 billion in assets as of Sept. 30.
The firm bought 37,602 shares of Tesla, the electric-car company, in the fourth quarter. Gateway hadn’t owned any at the end of the third quarter.
Tesla stock surged nearly nine times in value in 2020. As of the close of trading on Friday, shares have risen 20% so far this month. In comparison, the
index, a broad measure of the market, rose 16.3% last year. It sports a year-to-date rise of 2.3%.
Tesla was added to the S&P 500 recently, and we noted that one observer has said that the company has “already won,” in terms of changing the paradigm of the future of cars. Barron’s has suggested an options play for Tesla’s fourth-quarter earnings report, set for Jan. 27.
Gateway bought 142,393 additional shares of American Tower, ending 2020 with 183,884 shares of the wireless-tower company, which is organized as a real-estate investment trust..
American Tower stock slipped 2.3% in 2020, and for January so far it has dipped 0.2% into the red.
A big investor in American Tower told us in October that unlike retail or lodging, the growth in wireless towers “will be less sensitive to economic downturns.” The company announced a dividend boost in September. Credit Suisse analyst Sami Badri highlighted American Tower’s global reach, solid balance sheet, and “very diversified cash flows” in a January report. Badri rates the company at Outperform.
Citigroup stock dove 23% in 2020, but so far in 2021 it has slipped 0.5% (TK check).
In late November, Citigroup was one of the two top banking picks by Morgan Stanley (MS). Citigroup’s fourth-quarter earnings report in January beat bottom-line estimates, and the bank said it could start buying back stock.
Gateway sold 301,549 Citigroup shares in the fourth quarter to cut its investment to 852,972 shares.
The firm lopped 494,676 shares from its holdings in Exxon to end 2020 with 1 million shares of the energy giant.
Exxon stock cratered 41% in 2020, but it has surged 15.1% so far in January.
Exxon was dropped as a component of the
Dow Jones Industrial Average
in August, but the shares have been upgraded by analysts this month, as oil prices have risen. The Wall Street Journal reported this month that the SEC launched a probe into a whistleblower complaint alleging that Exxon overvalued one of its most important oil and gas properties. The company declined to comment on the existence of an investigation, the newspaper reported.
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 firstname.lastname@example.org and follow @BarronsEdLin.