A New York pension bought up shares of New York Community Bank shortly before shares of the regional lender tumbled, and slashed investments in two Chinese companies.
New York State Common Retirement Fund added to its stake in
NYCB
in the fourth quarter of 2023, not long before shares dove at the end of January 2024. During the quarter, the pension also sold material amounts of
Alibaba Group Holding
and
Tencent Music Entertainment Group
shares, and trimmed its investment in
Palantir Technologies.
NYSCRF disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
In response to a request for comment on the investment changes, the office of New York State Comptroller, the sole trustee responsible for NYSCRF, said in an emailed statement, “We do not comment on active manager portfolio activity, and any passive portfolio activity would be driven by routine rebalancing.”
NYSCRF is one of the biggest public pensions in the U.S. by assets. Its audited value was $248.5 billion as of March 31, 2023, the end of last fiscal year.
NYCB stock logged a 19% gain in 2023, short of the 24% rise in the
S&P 500 index.
So far in 2024, shares have dropped 52%, compared with a 4.9% rise in the index.
The bank disclosed a surprise fourth-quarter loss at the end of January, along with a dividend cut. NYCB wrote down the value of loans, and set aside millions of dollars for more potential losses. Earlier this month, shares dropped to trade at a level not seen since 2000. NYCB executives and directors recently bought up the battered stock.
NYSCRF bought 184,757 NYCB shares in the fourth quarter to lift its investment to 1 million shares.
The pension sold 173,379 Alibaba American depositary receipts to lower its stake in the Chinese online giant to 318,731 ADRs at the end of the fourth quarter.
Jack Ma,
Alibaba co-founder and former CEO, bought up the company’s Hong Kong-listed stock in January, and Alibaba itself in February increased the size of a stock-buyback program after disclosing a profit slump for the last quarter of calendar 2023. An economic slowdown in China continues to weigh on Alibaba.
Alibaba ADRs dropped 12% in 2023, and so far this year they are 4.6% lower.
Tencent Music ADRs rose 8.8% in 2023, and so far in 2024 they are up 12%.
Tencent Music extended a multiyear licensing pact with
Universal Music Group
in January. The same month, Universal was unable to reach a new contract with TikTok, the app owned by Chinese firm ByteDance.
NYSCRF sold 1.2 million Tencent Music ADRs in the fourth quarter to cut its stake to 343,507 ADRs.
The pension sold 199,120 Palantir shares to lower its investment to 1.3 million shares at the end of 2023.
Palantir stock rocketed 167% in 2023, and so far in 2024 shares are up 42%.
The data-analytics company reported strong fourth-quarter earnings earlier this month. Palantir co-founder and CEO Alex Karp told us, ”It certainly feels like we’re in a world of increasing chaos and danger,” citing the current geopolitical landscape.
On Valentine’s Day, Stephen Bersey, head of technology research at HSBC Global Research, downgraded Palantir stock to Hold from Buy, while keeping his $22 target price. “[T]he valuation looks full following the stock’s recent strong performance,” Bersey wrote in a report.
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.
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