https://www.barrons.com/articles/al-gore-beats-market-buying-applied-materials-stock-selling-analog-devices-51566491950
Al Gore Beats the Market by Buying Applied Materials Stock and Selling Analog Devices
Aug. 25, 2019 7:00 am ET
Photograph by Scott Heins/Getty Images
Al Gore may not be everybody's champion, but he is undeniably enriching his investors.
The former vice president continues to beat the market at Generation Investment Management, the London-based firm that Gore co-founded and chairs. As of Friday's close, the trailing returns of Generation's largest public fund by assets, Lombard Odier Funds-Generation Global, is handily outpacing the S&P 500 for all periods 3 months and longer.
Generation hasn't outperformed by simply buying and holding. In fact, the firm make some large transactions in its U.S.-traded equities in the second quarter. Gore's firm initiated positions in Applied Materials (ticker: AMAT) and Nutanix (NTNX), and cut its Analog Devices (ADI) investment in half. Generation also exited its investment in Colgate Palmolive (CG).
Generation declined to comment on its stock trades.
The firm bought 4.6 million shares of chip-making-equipment firm Applied Materials in the second quarter. Applied Material stock has surged 37.8% this year, although it's about flat so farin the third quarter; the S&P 500, by comparison, has risen only 13.6% year to date and has slipped about 3.2% over July and August.
Read More: Al Gore Bulks Up on Apple Stock
Barron's suggested in May that Applied Materials was a cheap stock to ride out the trade war. The valuation at the time was an "opportunity for long-term buyers." The company's fiscal-third-quarter earnings, reported earlier this month, were strong.
Nutanix stock isn't having a good year. Shares of the cloud-computing firm have lost almost a quarter of their value in the third quarter, and Nutanix's stock price has been halved in the year to date. Fiscal-third-quarter earnings, reported in late May, were disappointing, sending Nutanix stock down. Shares also slipped earlier this month when the company cut sales guidance.
Generation disclosed in May that it had bought 8.6 million Nutanix shares, a 5.76% stake, as of May 3. The firm went on to buy more Nuatnix stock, ending June with 14.4 million shares.
Analog Devices stock sports a healthy 21.4% year-to-date gain, but that includes a 7.7% slump since the end of June. On Wednesday, the chip maker provided mixed guidance with its fiscal-third-quarter report. Generation sold 5.1 million Analog Devices shares in the second quarter to cut its investment to 5.0 million shares.
Gore's firm sold all the 1.3 million Colgate shares it owned in the second quarter. The household-goods company's shares ended June with a 20.4% gain for 2019, coming close to erasing a 21.1% drop in 2018. Colgate has managed to edge up an additional 0.7% over July and August.
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.