INSIDE SCOOP Market-Beating Advisor Triples Alibaba Stake By Ed Lin April 13, 2018 8:00 a.m. ET PHOTO:GETTY IMAGES The ability to find opportunity in even the bleakest situations is likely in Davenport & Co.’s genes. The Library of Virginia notes that the Richmond, Va.-based investment advisor wasfounded in 1861, saw its building destroyed in the Civil War, andmoved into one of the first buildings rebuiltduring Reconstruction. Two out of three of Davenport’s equity strategies are beating the Standard & Poor’s 500 index. Its Value & Income Portfolio, with an inception date of Dec. 31, 2001—less than three months after 9/11—returned an annualized 8.91% since then through the end of 2017, while the S&P 500 managed only an annualized return of 7.58% over that span. Davenport’s Equity Opportunities Portfolio is doing even better, with an average annualized return of 9.67% since inception Dec. 31, 2003, compared with 8.69% for the S&P 500. The third strategy, the Core Portfolio, was established at the end of 1998 and has an annualized return of 5.94%, compared with the S&P 500’s 6.17%. Davenport, which oversees a total of $8.1 billion in U.S.-traded securities, tripled its holdings inAlibaba Group Holding(ticker: BABA) in the first quarter, and also bulked up onOracle(ORCL) andFedEx (FDX),regulatory filings show. The advisor also slashed its investment in two troubled companies:General Electric(GE) andWells Fargo(WFC). Davenport didn’t respond to requests for comment on its transactions. The advisor bought 210,600 more American depositary receipts of Alibaba in the quarter, raising its holdings to 316,100 ADRs as of the end of March. The Chinese Internet giant’s ADRs doubled in 2017, but saw only a 6.4% gain in the first quarter. Davenport isn’t the only party bullish on Alibaba. Barron’s has noted that one analyst sees the ADRs rising to $260 in a year—a 42% gainfrom the end of the first quarter. The advisor bought 270,300 additional shares of Oracle in the first quarter, raising its investment to 1.1 million shares. The software giant’s stock slid 3% in the quarter, mostly due toinvestor disappointmentwith fiscal-third-quarter total cloud revenue, as our colleagues at The Wall Street Journal noted. The outlook also wasn’t as cloudy as expected. On the other hand, we’ve noted that Oracle was one of the big tech names that has announceda large share buybackthis year. FedEx is another stock that has slipped in the first quarter that Davenport bought. Shares of the logistics firm fell 4% during the period. FedEx investors wereunnerved in Februaryby news thatAmazon.com(AMZN) could launch its own package-delivery service, and they weren’t assured enough byFedEx’s fiscal-third-quarter reportin late March. We werebullish on FedExin January and admired the automation and expansion of its hubs. Davenport bought 102,100 more FedEx shares in the first quarter, ending March with 383,750 shares. GE ended March with a year-to-date drop of 22%. Not a week in the quarter, it seemed, went by without negative news about the conglomerate. There was the mid-January revelation ofa $6.2 billion chargerelated to insurance operations, followed by the disclosure ofa regulatory investigation. February saw a detailed feature in the Journal about then-CEO Jeff Immelt’sunhealthily optimistic “success theater.”We noted hopes thatWarren Buffett would come to rescuethe company in late March. Davenport isn’t holding out much hope. Barron’s has determined that the advisor sold more than 70% of its investment in GE in the first quarter, cutting its holdings to 627,300 shares from 2.2 million shares held at the end of 2017. Speaking of bad news cycles, Wells Fargo rivals GE in notoriety, but the bank’s first victims were customers, not investors. Wells Fargo was slapped with a$185 million fine in 2016for “widespread illegal” sales practices, including issuing debit cards without customers’ knowledge and using existing accounts to temporarily fund fake ones. The bank said in 2017 that the shenaniganswere more widespreadthan previously thought. A month ago, a federal investigation into sales practices at Wells Fargo expanded to includethe bank’s wealth-management business. Its shares tumbled 13% in the first quarter. Barron’s calculates that Davenport hacked off 82% of its investment in Wells Fargo in the first three months of 2018, cutting its holdings to 178,300 shares from 966,400 shares. In January, George L. Smith, senior vice president of the Davenport Asset Management unit, hadprescient comments for clientsin an online video viewed by Barron’s. “It’s going to be difficult to repeat the returns of the last five years. We think returns will moderate a bit,” Smith said. “We think volatility is likely to pick up some.” He added, “We continue to think stock selection will be very important.” Follow@BarronsEdLin Comments? E-mail us ateditors@barrons.com https://www.barrons.com/articles/market-beating-advisor-triples-alibaba-stake-1523620800