New York’s state pension made a big bet on ride-hailing services in the first quarter, which was rocked by a coronavirus-induced market slump.
The New York State Common Retirement Fund quadrupled investments in
(ticker: UBER) and
stock (LYFT) in the quarter, and sold
Advanced Micro Devices
stock (NKE). The pension disclosed the trades in a form it filed with the Securities and Exchange Commission.
The pension is the third-largest U.S. public pension with assets of $210.5 billion, and according to a prominent study, is one of the best. A report by the Pew Charitable Trusts using 2017 data showed the New York State Common Retirement Fund was the fourth-best funded among the states with a 94.5% funded ratio, which means it had 95 cents in assets for every dollar of liabilities. The average state had only 69 cents in assets for every dollar of liabilities.
The fund declined to comment on its first-quarter stock trades.
Uber and Lyft stock both fell in the first quarter, the former sliding 6.1% and the latter plunging 37.6%. For the second quarter through Friday’s close, Uber stock has gained 17.4%, while Lyft stock has surged 21.9%. In comparison, the
S&P 500 index,
a measure of the broader market, has gained 13.4% so far in the second quarter.
Uber’s recent first-quarter results were overshadowed by the company’s commentary that business was starting to recover from the Covid-19 shutdowns. Lyft stock also got a lift from first-quarter results.
New York’s pension bought 1.6 million more Uber shares and 261,200 additional Lyft shares in the first quarter to raise its investments to 2.1 million shares and 339,900 shares, respectively.
The pension sold 426,591 shares of chip giant AMD in the quarter to end March with 2.6 million shares.
AMD stock slipped less than 1% in the first quarter, and so far in the second it has tacked on 17.0%.
In late April, AMD shares slid after the company cut its outlook, a move that overshadowed its first-quarter earnings, which met expectations.
Nike stock slid 18.3% in the first quarter, and has managed an 9.3% gain so far in the second. One analyst told us that the apparel giant is among the few discretionary companies that have good liquidity and can grow their online sales. A Nike insider recently made a significant purchase of stock.
The pension sold 271,526 Nike shares in the first quarter, lowering its stake to 3.2 million shares.
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.
Nick Trahair, CLM,CHA serves as General Manager of the GrandStay Hotel & Suites of Traverse City, MI.
Prior to joining the staff at the GrandStay, he served as the Regional Operations Manager for a large hospitality management company based in the Midwest and also has worked in the food and beverage management field.