One of the world’s largest foundations recently disclosed major changes in its investment portfolio.
The Bill & Melinda Gates Foundation Trust, which manages the funds of that foundation, exited positions in Alibaba Group Holding (ticker: BABA) and Uber Technologies (UBER), halved its stake in Apple (AAPL), and increased an investment in Schrodinger (SDGR) in the fourth quarter. The trust disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
The trust didn’t respond to a request for comment made through the foundation. It had assets of $49.8 billion at the end of 2019, its latest audited financial statements show.
The Gates Trust sold 552,383 Alibaba American depositary receipts it had owned at the end of the third quarter to end 2020 with no holdings of the Chinese internet giant.
Alibaba ADRs managed a 9.7% gain in 2020, but so far in 2021 through Friday’s close, it has soared 13.3%. By comparison, the S&P 500 index, a measure of the broader market, rose 16.3% in 2020, but has risen 4.0% year to date.
Alibaba ADRs jumped in January after founder Jack Ma resurfaced in a video after being out of the public eye for months. Both Ma and Alibaba had fallen afoul of Chinese regulators after he criticized the state-owned banking system. The regulatory difficulty eased in February, lifting Alibaba ADRs.
The trust didn’t own much of ride-hailing giant Uber, just 26,767 shares, but sold them all in the fourth quarter.
Uber stock had a strong 2020, surging 71.5%. Year to date, it has gained 14.5%.
Uber’s food-delivery unit, Uber Eats, could be a jewel in the company’s crown. Earlier this month, the company said fourth-quarter delivery revenue, including Uber Eats, was $1.36 billion, up 224% from a year ago. Interestingly, Uber agreed earlier this month to buy alcohol-delivery startup Drizzly for $1.1 billion.
Apple stock had a boffo 2020, jumping 80.8%, but so far in 2021, it has slipped 2.1%.
There is widespread speculation that Apple is working on a car. Reportedly, talks with Hyundai as a partner haven’t yet resulted in an agreement. Apple crushed estimates when it reported fiscal-first-quarter numbers at the end of January.
The Gates Trust sold 1 million Apple shares in the fourth quarter, cutting its holdings in the iPhone maker to 1 million shares.
The fund bought 2 million more Schrodinger shares to end 2020 with 7 million shares. The company offers a software platform used in the drug-discovery process.
Schrodinger’s initial public offering was priced at $17 a share in February 2020. The stock ended the year 466% higher. So far in 2021, shares have gained 32.6%.
BMO Capital Markets Research analyst Do Kim raised the target price on Schrodinger stock to $117 from $97. The new target price implies about 11% upside.Kim sees increased drug-discovery revenue under an agreement with Bristol-Myers Squibb (BMY). He rates Schrodinger at Outperform.
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.