An AMD EPYC processor.
Courtesy AMD
New Jersey’s state pension materially increased investments in some of its larger positions.
State of New Jersey Common Pension Fund D, the pension’s largest fund by assets, bought more shares of chip maker Advanced Micro Devices (ticker: AMD
), marijuana producer Tilray (TLRY), ride-hailing firm Uber Technologies ( UBER
), and Brazil’s state-owned energy giant Petroleo Brasileiro (PBR). The pension disclosed the transactions in a form it filed with the Securities and Exchange Commission.
The state’s Department of the Treasury, whose Division of Investment oversees the pension, didn’t respond to a request for comment on the stock trades. Pension Fund D had assets of $50.5 billion as of June 30, 2020, and “[i]nvests primarily in global equity and fixed-income securities,” according to the Treasury’s latest audited annual report.
The pension bought 249,025 more AMD shares to end the first quarter with 959,689 shares. AMD stock slipped 24% in the first quarter, compared with a 5% drop in the S&P 500 index. Since then, shares have slipped 13% while the index is down 9%.
AMD reported a strong first quarter last week, and we noted that its high-end server-chip business is taking market share from rival Intel (INTC). AMD stock had slipped at the end of April when Intel said it saw weakening demand for computers. AMD has agreed to buy cloud-services provider Pensando for nearly $2 billion. J.P. Morgan analyst Harlan Sur, who rates AMD stock at Neutral, noted that the company is “further expanding its footprint in the fast-growing data center market” with the Pensando deal.
Speaking of growing, the pension’s home state of New Jersey weeks ago began legal sales of marijuana for recreational use. Voters had approved such use in 2020. Perhaps in anticipation of the sales—which could reach $500 million this year—the pension bought 133,843 Tilray shares to lift its holdings to 414,973 as of March 31. Tilray stock rose 11% in the first quarter, and is down 39% so far in the second.
Tilray reported a mixed fiscal third quarter in early April, with earnings that topped expectations while revenue disappointed. The House of Representatives voted to decriminalize marijuana the same month, but Tilray shares and those of peers couldn’t ride the industry-positive move.
Ride-hailing firm Uber has seen shares slump this year, dropping 15% in the first quarter, and 27% so far in the second.
Both Uber and rival Lyft (LYFT) both reported better-than-expected results last week, but both saw their shares tumble. We noted that “the old ways of growth at all costs without strong profitability don’t work in this market.” One analyst said that Lyft should combine with food-delivery firm DoorDash (DOOR) to better compete with Uber, which has a unit that delivers food. In March, Uber said it would allow New York City cabs to list on its app.
The pension bought 137,333 more Uber shares to end March with 862,170 shares.
New Jersey’s pension also bought 135,162 additional American depositary receipts of Petroleo Brasileiro, which is known as Petrobras, to lift its investment to 1,223,695 ADRs.
Petrobras ADRs soared 35% in the first quarter, and so far in the second they are down 5%.
In early April, Brazil’s Ministry of Mining and Energy named a new Petrobras CEO. Last week, Petrobras reported a strong first quarter thanks to a surge in oil prices.
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.
