New Jersey’s state pension pulled out of a falling bank stock before it fell further, and it made other portfolio modifications.
In the first quarter, the State of New Jersey Common Pension Fund D, the pension’s largest fund by assets, sold a position in First Republic Bank FRC -43.30% (ticker: FRC), increased its holdings in theater-chain AMC Entertainment Holdings AMC +2.42% (AMC) and home builder DR Horton DHI +1.37% (DHI), and reduced its holdings in home-furnishings retailer Wayfair (W). The trades were disclosed by the fund in a document filed with the Securities and Exchange Commission.
The pension is overseen by the state’s Department of Treasury’s Division of Investment, which declined to comment. Pension Fund D has $54.7 billion in assets as of June 30, 2022, out of the pension’s total assets of $98.4 billion, and “invests primarily in global equity and fixed-income securities,” according to the Treasury’s most recent annual report.
To finish March with no shares, the fund liquidated the 105,884 First Republic shares it had on December 31. The stock fell 89% in the first quarter, while the S&P 500 index S&P +0.83% rose 7%. Shares are down 75% in the second quarter, while the index is up 1.5%.
When sister regional bank SVB Financial Group collapsed in early March, First Republic stock plummeted. After revealing late on April 24 that clients withdrew around $100 billion in deposits, First Republic shares plummeted once more, losing half their value.
AMC stock is no stranger to volatility, but it has been a year-long winner. The stock rose 23% in the first quarter and another 9.8% in April.
AMC is one of the most well-known meme stocks or stocks that optimistic investors promote on message boards and social media. A combination of more traditional business indicators and actions has recently boosted the stock. When the company reported fourth-quarter results in February, the stock rose due to a smaller loss than expected.
In addition, the corporation disclosed a proposal to charge extra for nicer theater seats. AMC is reporting strong box-office revenues ahead of its first-quarter release on May 5.
New Jersey’s pension purchased 45,178 extra AMC shares in the first quarter, bringing its total holdings to 370,847.
In the first quarter, the fund purchased 10,000 more DR Horton shares, bringing its total stake to 190,387 shares. DR Horton stock rose 9.6% in the first quarter and is up 12% so far this month.
Although mortgage rates remain high as a result of several Fed rate hikes, they are now slightly lower. Due to a scarcity of existing homes for sale, new homes may be in high demand. In fact, according to research released earlier this month by the National Association of Realtors, “[s]ales of new homes are already matching 2019 pre-Covid activity and are expected to increase in 2023, largely due to plentiful inventory in this segment of the market.”
While new-home sales are holding steady, Wayfair is seeing fewer customers for its home furnishings. It has been losing money and laying off employees. Wayfair’s stock has risen as a result of personnel reductions. The stock gained 4.4% in the first quarter and is up 1.4% so far in the second.
The pension sold 20,267 Wayfair shares, bringing its total holdings to 50,511 at the end of the first quarter.
