Huge Texas Pension Made Big Bets on AMD, Intel, and Walmart Stock - Barron's

Teacher Retirement System of Texas bet big on Intel and AMD stock. Photograph by David Ramos/Getty Images

Teacher Retirement System of Texas bet big on chip stocks in the third quarter, and it’s been a big win so far in the fourth quarter.

The pension manager initiated a position in Advanced Micro Devices stock (ticker: AMD) and lifted its investment in Intel (INTC) in the third quarter. Both stocks have been having a boffo October.

But TRS also bought more Walmart stock (WMT) and slashed a position in Lululemon Athletica (LULU) in the third quarter; since then, Walmart has stalled while Lululemon has surged.

The pension disclosed the trades in a form it filed with the Securities and Exchange Commission.

TRS declined to comment on its stock trades. Domestic equities are only a portion of the pension’s total assets. As of Sept. 30, it managed $11.4 billion in U.S.-traded equities, while total assets stood at $154.6 billion at the end of its latest reported fiscal year, Aug. 31, 2018,

The pension bought 385,457 shares of AMD in the third quarter; it hadn’t owned any at the end of the second quarter.

AMD stock has surged 20.4% so far in October, supported by prospects for a trade deal with China, and upbeat Wall Street assessments. AMD’s recent guidance wasn’t as strong as investors wanted. AMD stock sports a year-to-date surge of 89.0% through Friday’s close. By comparison, the S&P 500, which reached a new record this week, has risen only 3.0% so far in October, and is up 22.3% so far this year.

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Intel stock has surged 9.7% in October on the potential trade pact, and earnings reported earlier in the month that topped expectations. So far this year, the shares are up 20.4%.

TRS bought 446,007 additional Intel shares in the third quarter, lifting its investment to 1.4 million shares at the end of September.

The pension nearly tripled its Walmart investment by buying 427,239 additional shares to end September with 656,323 shares.

But Walmart has sliped 0.9% so far in the fourth quarter, although we’ve noted that the retailing giant’s assumed suffering at the hands of Amazon.com (AMZN) has been exaggerated. Walmart stock’s year-to-date gain stands at 26.3%.

Lululemon stock has surged 4.2% since the end of September. We had noted that the apparel retailer had been making moves to cut exposure to China tariffs. Shares have leapt 65.0% year to date.

TRS slashed its stake in Lululemon in the third quarter, selling 61,165 shares to end the period with 77,162 shares.

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.

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