Canada’s Largest Pension Cut Apple Stake, Bought Tesla, NIO, Li Auto

Canada’s largest public pension seems to be more bullish about electric vehicles than iPhones.

Canada Pension Plan sold 85% of its Apple stock (ticker: AAPL), and scooped up shares of Tesla (TSLA), and Chinese EV makers NIO (NIO) and Li Auto (LI) in the fourth quarter. Canada Pension Plan Investment Board, known as CPP Investments, which manages the pension, disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.

CPP Investments declined to comment on the investment changes. As of Dec. 31, the pension’s total assets stood at $398 billion.

The sale of Apple stock builds on reductions in its holdings the pension made in the third quarter, while the EV purchases point to a tactical reversal. CPP Investments sold electric-vehicle shares in the three months ended in September.

The manager sold 3 million Apple shares in the fourth quarter to cut its investment to 504,575 shares. Apple stock slid 27% in 2022, compared with a 19% drop in the S&P 500 index. Shares have gained 13% so far this year, while the index is up 3.4%.

Apple’s fiscal first quarter, which ended Dec. 31, was disappointing on both the top and bottom lines when the company reported in early February. KeyBanc Capital Markets analyst Brandon Nispel is still bullish on the stock, and noted that Apple is upbeat on sales in China and India. An investigation into whether Apple has monopoly power that it abuses began in 2019, and the Justice Department just escalated the probe, according to The Wall Street Journal.

While Tesla stock did worse than Apple in 2022, it is doing far better this year. Shares of the EV company are up 60% year to date, after cratering 65% in 2022.

Tesla cut prices in early January, and later that month it reported strong fourth-quarter earnings. Both events sent shares soaring. In February, Tesla announced a recall over self-driving software. Organizers accused Tesla of firing employees who were trying to form a union in Buffalo, but the company said the workers were cut as part of a performance-review cycle.

CPP Investments bought 590,861 more Tesla shares to end the fourth quarter with 959,728.

The manager bought 2.2 million more NIO American depositary receipts in the fourth quarter to lift its investment to 2.3 million ADRs.

The year started out well for NIO, as it announced strong deliveries in December, but deliveries were weak in January. In February, the world’s largest EV-battery maker, Contemporary Amperex Technology of China, changed its pricing strategy, sending shares of NIO and other EV makers down. NIO reports fourth-quarter results on March 1, before the market opens.

NIO ADRs cratered 69% in 2022, and so far this year they are down 4.6%. Li Auto ADRs fell 36% in 2022, and year to date in 2023 they are sporting a 14% gain.

Li Auto had record deliveries in December, and yet a month later it landed in the same boat with NIO, with disappointing January deliveries. Li Auto reports fourth-quarter results on Feb. 27 before the market opens.

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