CalSTRS, the second-largest U.S. public pension, bought Peloton, NextEra, and Norwegian Cruise stock, and trimmed the investment in Skyworks Solutions.
Courtesy of Peloton
The second-largest U.S. public pension repositioned investments in the last quarter of 2020 to play trends that had emerged in the year.
The California State Teachers’ Retirement System nearly tripled its holdings in Peloton Interactive (ticker: PTON) stock, quadrupled the position in NextEra Energy (NEE), and bought more Norwegian Cruise Line Holdings (NCLH), and trimmed the position in Skyworks Solutions (SWKS). CalSTRS, as the pension is known, disclosed the trades in a form it filed with the Securities and Exchange Commission.
CalSTRS, which managed assets of $282.5 billion as of Jan. 31, declined to comment on its stock trades.
The pension bought 298,735 Peloton shares in the fourth quarter to end 2020 with 467,674 shares of the fitness company known for its interactive stationary bikes.
Peloton stock rose more than five times in value in 2020, and so far in 2021 through Friday’s close, it has tumbled 30.7%. In comparison, the S&P 500 index, a measure of the broader market, rose 16.3% last year, and has eked out a 2.3% rise year to date.
Delivery delays sent Peloton sliding in early February. Wider reopenings of gyms in the face of Covid-19 vaccinations could hurt Peloton’s business. In a March 1 report, KeyBanc Capital Markets analyst Edward Yruma wrote that he is “more upbeat” on Peloton stock following a KeyBanc summit that included Peloton. “[W]e come away more confident in the Company’s growth trajectory led by lowering order-to-delivery times, expanding into new markets, and further enhancing categories and content,” Yruma wrote. He rates Peloton stock at Overweight with a $185 price target.
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CalSTRS bought 2.8 million more shares of NextEra to end the fourth quarter with 3.7 million shares of the energy company. NextEra units include the utility Florida Power & Light, and NextEra Energy Resources, a generator of wind and solar energy, with operations in battery storage.
NextEra stock rose 27.4% in 2020, and so far in 2021 it has slipped 8.4%.
We noted in February that NextEra stock is a play on the green boom for utilities. The company also raised its dividend that month. The Florida Power & Light subsidiary is building a battery that will power Disney World for seven hours.
Norwegian Cruise stock cratered 56% in 2020, as the Covid-19 pandemic roiled markets and canceled cruises. So far in 2021, the shares are sitting on a gain of 13.4%.
Not surprisingly, Norwegian Cruise has been logging large quarterly losses. But the entire sector is primed for a comeback, according to Macquarie Research, which sees the most upside for Norwegian Cruise stock. Truist Securities doesn’t see cruises resuming until the second half of 2021, or even early 2022.
The pension bought 66,276 additional Norwegian Cruise shares to end the fourth quarter with 551,406 shares.
CalSTRS sliced off 25,048 Skyworks shares from its holdings to end 2020 with 329,143 shares of the maker of mobile-phone chips. Its largest customer is Apple (AAPL).
Skyworks stock soared 26.5% in 2020, and so far in 2021, it has gained 13.4%.
Skyworks’ latest earnings showed an apparent boost from the popularity of the Apple iPhone 12. Shares surged to a record. We’ve noted that despite the recent runup in the share price, Skyworks stock seems relatively cheap.
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.
Write to Ed Lin at [email protected] and follow @BarronsEdLin.
