The biggest challenge of buying and holding is having the discipline not to sell when stocks are sliding. The second-largest pension in the U.S. by assets possesses such self-control, based on its inaction on some names in the first quarter.
The California State Teachers’ Retirement System barely budged on its holdings of first-quarter stock losers such as
Nikola
(ticker: NKLA),
Bed Bath and Beyond
(BBBY), and walloped regional banks
KeyCorp
(KEY) and
Zions Bancorp
(ZION). Calstrs, as the pension is known, disclosed its stock positions, among others, in a form it filed with the Securities and Exchange Commission.
The pension had assets of $311.1 billion as of April 30.
In response to a request for comment, Calstrs declined to comment on the individual positions.
“Our public equity portfolio uses passive and active strategies,” the pension said. “The portfolio’s holdings can change for many reasons, including managers rebalancing exposure to desired active or index weights or due to corporate actions, such as a company merger, stock split, name change or similar activity.”
Electric and hydrogen fuel-cell-truck-technology company Nikola didn’t have any of those activities, but did see a combination of disappointing quarterly reports and a change in the chief financial officer post, which can be a hot seat for an embattled company.
Nikola stock dove 44% in the first quarter, while the
S&P 500 index
rose 7%. Calstrs actually bought 8,167 more Nikola shares to end March with 420,460 shares. If the pension is still holding the shares, they have already been halved again, down 52% so far in the second quarter, while the index is up 4.2%.
Nikola received a delisting notice in late May, as its shares have traded for less than $1 for 30 consecutive days, a violation of Nasdaq Stock Market requirements.
Bed Bath & Beyond stock has gone downhill faster than Nikola’s: Shares of the home-goods retailer cratered 83% in the first quarter. The pension sold a mere 719 Bed Bath & Beyond shares in that period to adjust its stake to 99,097 shares. Since the end of March, the company has filed for bankruptcy, and its shares have been delisted from the Nasdaq. They now trade over the counter, and so far in the second quarter, Bed Bath & Beyond stock has dropped 42%.
At the end of 2022, Calstrs’ Bed Bath & Beyond stake was valued at $250,538, but at the end of March essentially the same number of shares were only worth $42,345. Now, if the pension’s stake hasn’t changed, the shares are valued at just $24,675.
Compared with that, the fraught regional-bank sector hasn’t had it so bad. KeyCorp stock dropped 28% in the first quarter while Zions stock fell 39%.
The plunges of the bank stocks didn’t move Calstrs to lessen its grip much. It sold less than 1% of its KeyCorp stake to end the first quarter with 1.6 million shares. The pension sold less than 2% of its Zions investment to end the period with 187,860 shares.
So far in the second quarter, Zions stock seems to have stabilized a bit, slipping only 3%, while KeyCorp has dropped 18%.
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 edward.lin@barrons.com and follow @BarronsEdLin.
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