One giant pension cut back on its investments in marijuana stocks, and loaded up shares of credit- and debit-card giants.
British Columbia Investment Management sold shares of
Group (CGC) in the first quarter, and materially increased stakes in
(V) stock. BCI, as the provincial pension is known, disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission.
BCI, which manages about $140 billion in assets, declined to comment on the stock trades.
The pension halved its position in Canopy stock, and also sliced off about a quarter of its stakes in Aurora and Cronos. At the end of March, BCI owned 157,367 shares of Canopy, 220,134 shares of Aurora, and 208,861 shares of Cronos.
The timing seems prescient. After market-beating first-quarter gains, all three marijuana stocks have slipped. Canopy, Aurora, and Cronos stock rose 30.0%, 12.0%, and 36.3%, respectively. In comparison, the
S&P 500 index
rose 5.8% in the quarter. Since the start of April, however, Canopy Growth, Aurora, and Cronos have slid 21%, 4.4%, and 18.7%, respectively, while the index is up 6.5%.
Last year, Canopy and Aurora were cutting jobs and closing greenhouses to lower cash burn. Canopy posted a wider-than-expected loss for the fiscal quarter ended December, but CEO David Klein said the company would reach profitability in the second half of 2022.
Aurora and Cronos both reported weak December fiscal quarters, and Cronos reported first-quarter results last week, and announced plans to launch “Spinach” edibles to the Canadian adult-use market
BCI bought 69,563 additional Mastercard shares to end the first quarter with 635,688 shares. The pension also more than doubled its Visa stake by buying 177,570 shares to end March with 337,163 shares.
The two stocks had lackluster performances in the first quarter, with Mastercard essentially flat, and Visa sliding 3.2%. Since the start of April, however, Mastercard stock is up 5.4%, while Visa has soared 9.6%.
Investor reaction to recent earnings reports in April show that shares of the two companies may be on divergent paths. Visa’s fiscal second quarter, ended March 31, was strong, although guidance was disappointing. Visa also said its “crypto strategy is unfolding nicely.” Mastercard’s first-quarter report also topped expectations, but the outlook came up short as well. However, because Mastercard is more internationally focused than Visa, Mastercard investors focused on the company’s slumping cross-border travel spending.
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.