State Teachers Retirement System of Ohio loaded up on Moderna stock in the second quarter, and lowered investments in Starbucks, United Airlines, and Eli Lilly.
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A giant pension made big changes in its stock investments in the second quarter.
State Teachers Retirement System of Ohio recently disclosed that it loaded up on Covid-vaccine maker Moderna (ticker: MRNA), and lowered investments in Starbucks (SBUX), United Airlines Holdings (UAL), and Eli Lilly (LLY) in the second quarter. STRS Ohio, as the pension is known, disclosed the trades in a form it filed with the Securities and Exchange Commission.
STRS Ohio, which managed $79.8 billion in assets as of June 30, 2020, didn’t respond to a request for comment. The pension had a funded ratio of 77.4% as of June 30, 2020, according to its latest comprehensive annual financial report; that means it had 77.4 cents for every dollar of obligations. The funded ratio a year before stood at 76.1%. Those figures are better than the average state pension, according to a study by the Pew Charitable Trusts. Using 2017 data, the organization found the average pension had a funded ratio of 70.7%.
STRS Ohio materially raised its investment in Moderna by buying 146,137 additional shares to end the second quarter with 156,679 shares.
Moderna stock soared 125% in the first half of 2021, and so far in the third quarter, it has surged 50.4%. If the pension still owns those recently acquired shares, the larger stake has paid off handsomely already. For comparison, the S&P 500 index rose 14.4% in the first half, and has added 2.3%.
We had suggested buying Moderna stock in April, noting that the valuation was relatively cheap for a biotech, and that it had enough cash to pursue the rest of its pipeline. Moderna joined the S&P 500 in July, and is among the index’s top performers for the year to date. Medical experts are now weighing the potential for booster shots for those already vaccinated against Covid-19.
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STRS Ohio sold 50,577 Starbucks shares to end June with 435,213 shares of the cafe chain. Starbucks stock rose 4.5% in the first half, and so far in the third quarter, it has gained 8.6%.
Starbucks reported strong fiscal-third-quarter earnings last week. The company warned inflation and wages would push costs higher. Starbucks has struggled to keep cafes fully staffed, and in June, some locations were running out of cups and other supplies.
United stock rose 20.9% in the first half, and so far in the third quarter, it has slipped 10.7%.
United expects to turn profitable in the fall, and the airline issued upbeat guidance for the third quarter. It recently added more flights to vacation destinations. United also ordered hundreds of new jets from Boeing (BA) and Airbus.
STRS Ohio sold 122,115 United shares to end the second quarter with 850,196 shares.
The pension sold 71,340 Lilly shares to cut its stake to 595,480 shares at the end of June. Lilly stock soared 35.9% in the first half, and so far in the third quarter, it has gained 6.1%.
Lilly stock soared in June after the company said it would submit its Alzheimer’s drug donanemab for approval through the Food and Drug Administration’s accelerated approval pathway later this year. Analysts told investors to curb their enthusiasm for the stock, however. Lilly announced a $1 billion acquisition in mid-July.
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.
