The largest U.S. public pension recently made big changes to its investment portfolio.
The California Public Employees’ Retirement System bought more Moderna (ticker: MRNA), Costco Wholesale (COST), and Carnival (CCL) stock, and cut its investment in Coca-Cola (KO) in the second quarter.
Calpers, as the pension is known, disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission. It declined to comment on the investment changes.
The pension, which manages nearly $500 billion in assets, bought 82,241 additional Moderna shares to end the second quarter with 752,974 shares of the maker of a Covid-19 vaccine.
Moderna stock has more than doubled in price in the first half of the year, and so far in the third quarter has surged 63.0%. For comparison, the S&P 500 index rose 14.4% in the first half, and so far in the third quarter is up 3.4%.
Moderna’s second-quarter report was strong. The company is building a plant in Canada, its first outside the U.S., that will make mRNA-based vaccines to protect against Covid-19, seasonal flu, respiratory syncytial virus, and other respiratory viruses. Federal health officials last week announced a plan to offer Covid-19 booster shots for people who received the Moderna or Pfizer (PFE) vaccines.
Calpers bought 640,467 more Costco shares to end the second quarter with 1.8 million shares of the retailer. Costco stock rose 5% in the first half of 2021, and so far in the third quarter is up 16.0%.
Costco continues to report strong growth in monthly same-store sales. We named CEO Craig Jelinek to our latest list of top CEOs for having a steady hand as the pandemic roiled markets, and for continued gains. In fact, one observer sees ongoing spending patterns favoring Costco.
Carnival stock surged 21.7% in the first half, and so far in the third quarter has slipped 16.7%.
Cruise-line operators, including Carnival, saw shares rally early this year on expectations for resumed sailings. Later, the Centers for Disease Control and Prevention wanted to enforce a conditional-sailing order requiring the cruise industry to reopen under a stringent framework, but in a win for the industry a judge blocked the order. In July, Carnival issued $2.4 billion of debt to buy notes it issued last year to stay afloat through the worst of the pandemic. The company said refinancing the high-cost debt will save it $135 million a year in interest expense.
Calpers bought 495,979 additional Carnival shares to end the second quarter with 1.9 million shares.
The pension sold 4.7 million Coca-Cola shares to cut its investment to 20.5 million shares of the beverage giant. Coca-Cola stock slipped 1.3% in the first half, and so far in the third quarter has gained 4.7%.
In June, Morgan Stanley thought Coca-Cola sales would recover quickly from pandemic levels. We had named the shares one of our favorites for 2021, noting it would benefit from a reopening, as half of its sales come from restaurants, stadiums, and other venues. Coca-Cola discontinued a slew of drink brands last year, including Odwalla fruit juices and smoothies, and invested in coffee.
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@example.com and follow @BarronsEdLin.