One of the largest public pension funds in America seems to be betting on a recovery in the travel industry, judging by its recent investment changes.
State Teachers Retirement System of Ohio loaded up on shares of
Norwegian Cruise Line Holdings
(NCLH) in the first quarter. STRS Ohio, as the pension is known, also increased investments in
Mobil (XOM), which stands to benefit from increased fuel use. The pension disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission.
STRS Ohio, which manages $80 billion in assets, didn’t respond to a request for comment.
The pension bought 35,672 additional shares of Carnival, and 81,821 more shares of Royal Caribbean to end the first quarter with stakes of 71,494 shares and 346,821 shares, respectively. STRS Ohio also initiated an investment of 39,875 shares of Norwegian during the period; it hadn’t owned any at the end of 2020.
All three cruise stocks beat the market in the first quarter. Carnival, Royal Caribbean, and Norwegian Cruise stock rose 22.5%, 14.6%, and 8.5%, respectively, while the
S&P 500 index
managed a 5.8% rise. Since then, they’ve had a mixed performance as a group. Carnival and Royal Caribbean gained 5.3% and 1.6% in April, while Norwegian soared 12.5%; the index rose 5.2%.
At least one analyst thinks Norwegian stock could be the best positioned of the three, as the company has traditionally had “industry-leading capacity growth.” Nonetheless, the entire industry still faces headwinds. The cruise lines want to resume sailing from U.S. ports in July, but that’s unlikely.
STRS Ohio bought 408,646 more Exxon shares to end March with 2,589,776 shares of the energy giant.
Exxon stock soared 35.4% in the first quarter, on hopes of a reopening economy, and rising oil prices, which spiked after attacks on Saudi oil properties. Shares gained 2.5% in April. Exxon’s first-quarter earnings, reported last week, were strong. The oil-price rebound has provided a cushion, but Exxon faces a proxy fight.
The pension bought 199,959 more shares of Southwest to end March with 751,594 shares of the low-cost airline.
Southwest stock surged 31.0% in the first quarter, and rose 2.8% in April.
Southwest noted in March that it was seeing more leisure bookings. Even analysts who don’t rate Southwest stock at Buy are raising earnings estimates. The company came up as a leisure-travel play in our February Barron’s Roundtable.
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.