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Wellcome Trust of London took a position in Visa stock in the first quarter. The health-focused charity noted big returns in Apple, Microsoft, and Bank of America stock at the end of fiscal 2019.
Photograph by Mark Kauzlarich/Bloomberg
One of the largest charitable organizations in the world made some big adjustments in its holdings of U.S.-traded securities in the first quarter.
Wellcome Trust of London cut investments in Apple (ticker: AAPL), Microsoft (MSFT), and Bank of America (BAC) during the quarter. It also initiated a position in Visa (V), according to disclosures Wellcome made in a filing with the Securities and Exchange Commission.
Wellcome, which manages about $34 billion in assets, didn’t respond to a request for comment.
The health-focused charity cut its investment in Apple and Microsoft stock by about 40% each in the first quarter, and lowered its holdings of Bank of America stock by about a quarter. Wellcome had noted that at the end of its fiscal year on Sept. 30, its investment in Microsoft had a return on cost of more than six times, measured in pounds, while the Apple investment’s return was 11 times. Bank of America’s return was just over three times.
Wellcome sold 1.2 million Apple shares to end the first quarter with 2 million shares of the iPhone maker. It also unloaded 2.5 million Microsoft shares, reducing its stake to 3.5 million.
Apple stock now sports a year-to-date loss of 3.7%, but it has surged 11.2% since the end of the first quarter. By comparison, the S&P 500 index, a measure of the broader market, is down 11% so far this year, and has also added 11.2% so far in April. Barron’s recently noted that one analyst thinks iPhone demand could plunge as the global economy suffers from the coronavirus pandemic.
Microsoft stock has gained 13.3% so far this year, with nearly all of that surge in April after a flat first quarter. With social distancing in effect for work and schooling, the software giant has pushed its solutions for video meetings and calls.
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Wellcome sold 4.5 million Bank of America shares to end the first quarter with 15.5 million. The bank disclosed this month that profit fell 45% in the first quarter from a year ago. CEO Brian Moynihan said that nearly a million customers had requested payment deferrals from the bank. Bank of America stock has slumped 34% so far this year, but it has managed a 9.7% rise in April.
The charity bought 555,000 Visa shares in the first quarter. Wellcome didn’t own any stock in the card giant at the end of 2019. Visa stock has eked out a 5.2% rise so far in the second quarter and is down 9.8% year to date.
In late March, Visa said in an SEC filing there was a “meaningful deterioration in volume and transaction trends in the second half of March” in terms of domestic spending.
Credit Suisse analyst Moshe Orenbuch responded in a report that “U.S. volume and processed transactions are being more resilient than what we would have thought.” Orenbuch, who rates Visa at Outperform, slightly raised his estimates for Visa’s earnings through 2021.
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.