New Jersey's compound government pension made some large transactions in the equity portfolio in the second quarter.
The state fund bought about $ 100 million in class B shares of
), and sold large quantities of
(AA) shares. The pension informed about the transactions, including in a form it filed with the securities and stock exchange commission. New Jersey's Division of Investment, which manages the pension, refused to comment.
New Jersey's pension system "is in a crisis," said the state's Senate president in The Wall Street Journal in May. As of June 30, 2018, the fund's assets accounted for 38.4% of its liabilities, according to a government financial statement. The Division of Investments did not immediately respond to a request for comment on the funding level.
In the three months ended June, the pension plunged from a previous investment in Berkshire by buying an additional 440,000 B shares, ending the period of 1.46 million shares valued at $ 311.2 million. At the end of the first quarter, it owned 1.02 million shares valued at $ 204.9 million.
Warren Buffett, chairman and CEO of Berkshire, has not had a good year. Berkshire Stocks outperformed better than
in 2018 and rose 3.0% while the index fell 6.2%. However, the tables have turned this year. The Berkshire share rose by 2.8% so far through Friday's proximity, while the S&P 500 is up 20.7%.
Buffett continues to be one of Barron's most admired CEOs, but he's not perfect. Berkshire has been hampered by the investment in
stock (KHZ), which crashed earlier this year. Berkshire also does not sell the Kraft Heinz share at a loss. In correspondence with the SEC dated June 4, Berkshire Finance Manager Marc Hamburg wrote that it has not sold any Kraft Heinz shares and does not intend to do so. "Berkshire also has the ability to keep its Kraft Heinz shares at fair value restoring and exceeding the carrying amount," he added.
Unfortunately for New Jersey's pension, the Berkshire share has continued to underperform. As of Friday, it had fallen 1.5% so far in the third quarter, while the S&P 500 was up 2.9%.
However, the Intel share has risen in July. The share of the chip giant increased by 7.8% this month, with a gain of 9.9% for the year to date.
(AAPL) buys most of Intel's smartphone modem business in a $ 1 billion-valued transaction. The pension sold 500,000 Intel shares in the second quarter, ending June with 3.3 million shares.
New Jersey's pension also sold 500,000 GM shares, ending the second quarter with 1.6 million shares. The GM stock has been surprisingly strong in 2019, rising 21.9% so far, and gained 5.8% in July alone. We have noted that GM's Autonomous Drive Cruise may be undervalued. Barron's also includes the car manufacturer in our "Dinos of the Dow" group, which trounced the market during the first half.
Alcoa is another part of the Dinos group, but it has laggards. The shares of the aluminum giant have fallen 13.0% so far this year, including a 1.2% drop in July. The pension sold 353,000 Alcoa shares in the second quarter to end the period of 550,000 shares.
Inside Scoop is a common Barron feature that covers stock transactions by business executives and board members – so-called insiders – as well as major shareholders, politicians and other prominent people. Due to their insider status, these investors are required to disclose stock trading with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at email@example.com and follow @BarronsEdLin.