Tracking Al Gore’s Generation Investment Management Portfolio – Q3 2022 Update

This article is part of a series that provides an ongoing analysis of the changes made to Generation Investment Management’s 13F portfolio on a quarterly basis. It is based on Al Gore’s regulatory 13F Form filed on 11/10/2022. Please visit our Tracking Al Gore’s Generation Investment Management Portfolio series to get an idea of their investment philosophy and our previous update for the fund’s moves in Q2 2022.

This quarter, Al Gore’s 13F portfolio value decreased ~8% from $18.35B to $16.86B. The number of positions decreased from 46 to 45. The top five stakes are Amazon.com, Charles Schwab, Microsoft, Henry Schein, and Trane Technologies. They account for around ~29% of the total 13F portfolio value. Generation Investment Management’s whitepapers and Al Gore’s books are good precursors for anyone interested in investing based on sustainability analysis.

New Stakes:

Freshworks Inc. (FRSH): FRSH had an IPO in September 2021. Shares started trading at ~$47 and currently goes for $15.19. Generation IM’s stake is a minutely small 0.05% of the portfolio position.

Stake Disposals:

Intel Corporation (INTC): INTC was a ~3% of the portfolio position purchased during Q2 and Q3 2021 at prices between ~$52 and ~$68. There was a ~14% stake increase last quarter. The disposal this quarter was at prices between ~$26 and ~$41. The stock currently trades at $29.41. They realized losses.

Illumina Inc. (ILMN): The very small 0.65% stake in ILMN was sold during the quarter.

Stake Increases:

Amazon.com (AMZN): AMZN is currently the top position at ~8% of the portfolio. It was purchased during H1 2021 at prices between ~$158 and ~$175 and the stock currently trades well below that range at ~$94. There was a ~40% stake increase over the last two quarters at prices between ~$104 and ~$170. There was marginal increase this quarter.

Charles Schwab (SCHW): SCHW is the second largest position at 6.19% of the portfolio. The stake was first purchased in Q4 2016 at prices between $31 and $40.50. Since then, the position was increased substantially at prices between ~$30 and ~$50. Q1 2021 saw a ~37% selling at prices between ~$51.50 and ~$68. That was followed with a ~20% reduction next quarter at prices between ~$63.50 and ~$76. The stock is now at $82.46. There was a ~15% stake increase this quarter.

Note: SCHW has seen a previous round-trip. A large ~7.2M share stake purchased in 2013 in the high-teens price-range was disposed the following year at much higher prices.

Trane Technologies plc (TT): TT is now a large (top five) ~5% of the portfolio position. The stake saw a ~150% stake increase in Q1 2022 at prices between ~$143 and ~$195. That was followed with a ~40% increase last quarter at prices between ~$121 and ~$155. The stock currently trades at ~$179. This quarter saw a ~9% further increase.

Equifax Inc. (EFX): The 4.90% EFX stake was purchased in Q1 2019 at prices between $91 and $115. Q4 2020 saw a whopping ~175% stake increase at prices between ~$137 and ~$195. Q2 to Q4 2021 saw the position sold down by ~70% at prices between ~$181 and ~$297. The stake was doubled next quarter at prices between ~$208 and ~$286. The stock is now at ~$201. Last two quarters have seen minor increases.

Analog Devices (ADI): ADI position is now at 4.12% of the portfolio. It was established in Q2 2018 at prices between $87 and $102 and doubled next quarter at prices between $91 and $100. The stake has wavered. Recent activity follows. Q3 2020 saw a stake doubling at prices between ~$112 and ~$125. Q2 to Q4 2021 had seen the position reduced by ~47% at prices between ~$146 and ~$189. There was a ~80% stake increase last quarter at prices between ~$144 and ~$169. The stock currently trades at ~$169. There was a ~12% further increase this quarter.

MercadoLibre (MELI): The 3.36% of the portfolio stake in MELI was built during the last five quarters at prices between ~$635 and ~$1950. The stock is now at ~$945.

Applied Materials (AMAT): The ~3% AMAT stake was established in Q2 2019 at prices between ~$39 and ~$45. There was a ~45% increase last quarter at prices between ~$86 and ~$129. The stock currently trades at ~$107. There was a ~10% further increase this quarter.

Twilio Inc. (TWLO): TWLO is a ~2% of the portfolio position primarily built last quarter at prices between ~$79 and ~$175. The stock is now at $48.64. There was a ~14% stake increase this quarter.

Cognizant Technology (CTSH), and Toast Inc. (TOST): These small (less than ~1.5% of the portfolio each) stakes were increased this quarter.

Note: Generation IM’s original investment in Toast goes back to a funding round in 2017.

Stake Decreases:

Microsoft Corporation (MSFT): The large (top three) 5.32% MSFT stake was primarily built last quarter at prices between ~$242 and ~$315 and the stock currently trades at ~$255. There was a ~9% trimming this quarter.

Henry Schein (HSIC): HSIC became the largest position in Q4 2017 as it saw a ~550% stake increase at prices between $50.50 and $68.50. There was another ~22% increase next quarter at prices between $47 and $63.50. The five quarters thru Q3 2019 saw a combined ~30% reduction at prices between $58 and $71 while Q1 2020 there was a similar increase at prices between ~$43 and ~$74. The stock is now at ~$83 and the stake at ~5% of the portfolio. Last ten quarters have seen only minor adjustments.

Note: The prices quoted above are adjusted for the spinoff of Covetrus Inc. last January. Also, HSIC split 2-for-1 in September 2017. Generation IM has a ~9.5% ownership stake in Henry Schein.

Becton, Dickinson (BDX): The 4.20% BDX position was built in 2020 at prices between $201 and $284. There was a ~30% stake increase in Q4 2021 at prices between ~$236 and ~$257. Last quarter saw a similar reduction at prices between ~$235 and ~$275. The stock currently trades at ~$252. There was marginal trimming this quarter.

Jones Lang LaSalle Inc. (JLL): JLL is a 4.11% long-term position first purchased in 2008. By 2013, that original position was doubled to a fairly large ~5% stake thru consistent buying every year. The next two years saw selling: ~75% overall reduction at prices between $103 and $178. The pattern reversed in 2016: ~500% increase at prices between $91 and $141. That was followed with a ~30% increase in Q2 2017 at prices between $103 and $125. Since then, the activity has been minor. The stock currently trades at ~$167.

Note: Generation IM has a ~9% ownership stake in Jones Lang LaSalle.

Baxter International (BAX): BAX is now the 3.79% of the portfolio. It was established in Q4 2019 at prices between $76.50 and $88.50 and increased by ~50% next quarter at prices between ~$72 and ~$93. Q1 2021 saw another ~20% stake increase at prices between ~$76 and ~$86. There was a ~40% selling over the last two quarters at prices between ~$64 and ~$90. The stock currently trades at $53.22. There was another ~9% trimming this quarter.

Gartner Inc. (IT): The 3.67% of the portfolio IT stake was built in 2020 at prices between ~$83 and ~$164. The five quarters through Q4 2021 had seen a ~60% selling at prices between ~$120 and ~$340. The stock is now at ~$352. Last three quarters have seen only minor adjustments.

Mastercard Inc. (MA): MA is a 3.35% of the portfolio position purchased last quarter at prices between ~$309 and ~$379 and the stock currently trades at ~$360. There was marginal trimming this quarter.

Salesforce, Inc. (CRM): The 2.79% of the CRM position was first purchased in Q4 2016. The bulk of the current stake was built over the last two quarters at prices between ~$156 and ~$256. The stock currently trades at ~$145. There was marginal trimming this quarter.

Thermo Fisher Scientific (TMO): TMO is a 2.68% portfolio position first purchased in Q3 2016 and more than doubled the following quarter at prices between $141 and $159. Q2 2017 saw another ~20% increase at prices between $152 and $176. There was a one-third selling in 2019 at prices between $221 and $327. 2020 had seen another ~60% selling at prices between ~$255 and ~$528. The stake was rebuilt in Q2 2021 at prices between ~$441 and ~$509. There was a ~50% reduction over the two quarters through Q1 2022 at prices between ~$524 and ~$667. The stock currently goes for ~$563. Last two quarters have seen only minor adjustments.

Nutanix (NTNX): The 2.60% NTNX stake was established in Q2 2019 at prices between ~$25 and ~$43. The stock currently trades at $30.53. Last several quarters have seen only minor adjustments.

Clarivate Plc (CLVT): CLVT is a 2.57% of the portfolio stake purchased in Q3 2021 at prices between ~$21.50 and ~$27.15. There was a one-third stake increase next quarter at prices between ~$20.50 and ~$25.25. Q1 2022 also saw a similar increase at prices between ~$12.25 and ~$24.50. The stock currently trades below the low end of those ranges at $10.12. Last two quarters have seen only minor adjustments.

Note: Generation IM has a ~6.5% ownership stake in Clarivate plc.

CBRE Group (CBRE): CBRE is a 2.22% of the portfolio position built during Q2 & Q3 2020 at prices between ~$35 and ~$56. There was a ~45% selling over the four quarters through Q1 2022 at prices between ~$80 and ~$109. The stock is now at $79.25. Last two quarters have seen only minor adjustments.

Alibaba Group Holding (BABA): BABA is a 2.14% of the portfolio position purchased in Q4 2020 at prices between ~$222 and ~$317. The stake was increased by ~150% over H1 2021 at prices between ~$206 and ~$271. That was followed with a ~25% stake increase next quarter at prices between ~$140 and ~$222. Q4 2021 saw a ~20% reduction while next quarter there was a similar increase. The stock currently trades at ~$90. Last two quarters have seen only minor adjustments.

Cooper Companies (COO): The bulk of the ~2% position in COO was purchased in Q4 2016 at prices between $159 and $183. The original stake was doubled in Q1 2018 at prices between $218 and $251 and that was followed with a ~37% increase next quarter at prices between $218 and $237. There was a ~25% reduction in Q2 2021 at prices between ~$372 and ~$412. Q1 2022 also saw a ~15% selling at prices between ~$380 and ~$428. The stock currently trades at ~$322. Last two quarters also saw minor trimming.

Carlisle Companies (CSL) and PTC Inc. (PTC): These two stakes were established in Q4 2021. CSL is a 1.90% of the portfolio position established at prices between ~$201 and ~$248 and it is now at ~$260. This quarter saw a one-third reduction at prices between ~$241 and ~$316. The 1.72% PTC position was purchased over the last three quarters at prices between ~$98 and ~$130 and it now goes for ~$127. There was marginal trimming this quarter.

Alphabet Inc. (GOOG): GOOG stake is currently at 1.68% of the portfolio. The bulk of the stake was established in the three quarters thru Q1 2019 at prices between ~$49 and ~$63. Q2 & Q3 2019 had also seen a ~45% stake increase at prices between ~$56 and ~$63. The five quarters through Q4 2020 saw the stake reduced by ~60% at prices between ~$53 and ~$91. Q4 2021 saw another ~20% selling at prices between ~$133 and ~$151. That was followed with a ~50% reduction last quarter at prices between ~$106 and ~$145. This quarter also saw a ~27% selling at prices between ~$96 and ~$123. The stock currently trades at ~$101. They are harvesting gains.

Note: the prices quoted above are adjusted for the 20-for-1 stock split in July.

STERIS plc (STE): STE is a 1.18% of the portfolio stake primarily built in Q1 2021 at prices between ~$171 and ~$203. There was a ~60% selling over the last three quarters at prices between ~$193 and ~$253. The stock currently trades at ~$192. This quarter saw marginal trimming.

10x Genomics (TXG), Abiomed Inc. (ABMD), Coupang (CPNG), H World Group (HTHT), Microchip Technology (MCHP), Palo Alto Networks (PANW), Shopify (SHOP), Taiwan Semi (TSM), Texas Instruments (TXN), and Trimble Inc. (TRMB): These small (less than ~2% of the portfolio each) stakes were reduced during the quarter.

Kept Steady:

Remitly Global (RELY): RELY had an IPO last September. Shares started trading at ~$38 and currently goes for $10.49. Generation IM’s stake is at 0.73% of the portfolio.

Note: Generation IM has a 6.75% ownership stake in the business.

SOPHiA GENETICS (SOPH): SOPHiA GENETICS had an IPO last July. Shares started trading at ~$16.75 and currently goes for $2.29. Generation IM’s 0.11% of the portfolio stake goes back to a funding round in 2019.

Note: Generation IM has a 10.6% ownership stake in the business.

Asana Inc. (ASAN), Gogoro Inc. (GGR), Proterra Inc. (PTRA), and SPDR S&P 500 ETF (SPY): These minutely small (less than ~0.20% of the portfolio each) stakes were kept steady this quarter.

Note: Generation IM’s original investment in Proterra goes back to a funding round in 2017.

Below is a spreadsheet that highlights the changes to Al Gore’s Generation Investment Management 13F stock portfolio as of Q3 2022:

Source: John Vincent. Data constructed from Generation IM’s 13F filings for Q2 2022 and Q3 2022.