There have been big changes lately in some of the biggest investments that a low-volatility equity firm has in telecom and chips.
It increased its stake in Verizon Communications VZ 0.32% stock by more than double in the third quarter. It decreased its stake in AT&T T 0.55%, increased its holdings in Intel INTC 1.47%, and decreased its holdings in Micron MU -0.80% Technology. In a form it sent to the Securities and Exchange Commission, Gateway told the SEC about the stock trades and other things.
Gateway said in an email that the trades were part of a routine rebalancing and did not show any forward-looking review of individual companies when asked for comment on the changes to the investments.
As of the end of July, Gateway was in charge of $9.1 billion in assets. They have been investing in common stock, actively managed written index call options, and purchased index put options as their main strategy since January 1, 1988. This strategy has met their goal of “delivering a majority of the long-term return of the domestic equity market with less than half the risk.”
At the end of the third quarter, Gateway had 1.6 million AT&T shares after selling 208,400 of them. In the first nine months of 2024, AT&T stock went up 31%, while the S&P 500 SPX 0.40% went up 21%. The index is up 2% so far in the fourth quarter, while shares are down 1%.
The telecom company used to be a dividend king, but now it pays a 5% dividend yield, which may appeal to some investors. Before the company’s third-quarter earnings report on Oct. 23, at least one expert is good on AT&T shares.
Verizon announces its earnings for the third quarter the day before AT&T. For about $20 billion in cash, the company said in September that it had decided to buy Frontier Communications FYBR -0.42%, a fiber internet provider. The deal should go through in 2026.
Verizon stock went up 19% in the first nine months of 2024. However, shares are down 2% so far in the fourth quarter.
In the first nine months of this year, Intel stock dropped more than half of its value. So far in the last quarter of 2024, shares are down 3%.
The struggling chipmaker was said to have been called by Qualcomm QCOM -0.11% about a possible takeover, as reported by The Wall Street Journal. Barron asked Intel and Qualcomm to comment on the story, but neither company replied. Some investors have thought that Intel has lost its way in the past few years, but at the end of September, we told you that Intel’s newest chips for servers and mobile PCs were getting good reviews.
In the third quarter, Gateway bought 141,820 more Intel shares, bringing its total investment to 904,200 shares.
The company sold 161,980 Micron shares, which brought its total stake in the chip maker down to 58,000 shares.
Sanjay Mehrotra, CEO of Micron, made a plan to trade stock worth up to $20 million. That’s not a surprise since the shares have done better than expected this year, rising 22% in the first nine months. Shares are up 7% so far in the fourth quarter. Micron’s bottom line has improved thanks to strong demand for artificial intelligence.
