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Giant Pension Sells Electronic Arts and HP Stock, Buys Autoliv

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New York State Teachers’ Retirement System sold Electronic Arts and HP stock, and initiated an investment in Autoliv in the first quarter.

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One of the largest public pensions in America made some material changes to its investments in tech and automobile supplies companies.

New York State Teachers’ Retirement System cut investments in videogames maker Electronic Arts (ticker: EA), and PC maker HP (HPQ), and initiated an investment in Autoliv (ALV), a maker of seat belts, steering wheels, and other car parts. The pension disclosed the first-quarter stock trades, among others, in a form it filed with the Securities and Exchange Commission.

NYSTRS said it doesn’t comment on individual investment holdings. It managed $132.0 billion in net assets as of June 30, 2022, which makes it the ninth-largest public pension in the U.S., according to Pensions & Investments magazine.

The fund sold 25,614 Electronic Arts shares to end the first quarter with 291,668 shares. Electronic Arts stock slipped 1% in the first quarter, compared with a 7% rise in the S&P 500 index. So far in the second quarter, shares are up 4.1% compared with the index’s flat performance.

Electronic Arts said in a blog post at the end of March that it would lay off about 6% of its workforce and cut back on office space. The company said in April it was incorporating artificial intelligence in making its games. After a U.K. regulator objected to Microsoft’s (MSFT) pending acquisition of game maker Activision Blizzard (ATVI), a BMO Capital Markets said the action could discourage potential suitors for on Electronic Arts, knocking down the valuation.

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Valuations in the PC sector have been crimped by a continuing global slide in demand. Still, HP stock has been holding up, with a 7.6% gain in the first quarter, and a rise of 4.3% so far in the second quarter. In fact, J.P. Morgan recently suggested buying shares of HP instead of those of Dell Technologies (DELL) ahead of a PC rebound. HP Chief Financial Officer Marie Myers said in April she was “aggressively looking” for areas for generative AI to improve or streamline current practices.

NYSTRS sold 138,242 HP shares to cut its investment to 977,667 shares at the end of March.

The pension also initiated a position of 16,114 Autoliv shares in the first quarter. At the end of 2022, it hadn’t owned any.

Autoliv stock soared 22% in the first quarter, but so far in the second quarter, shares are down 8.3%. We found in January that Autoliv was among the five auto-related stocks with the fewest relative Buy ratings by analysts.

J.P. Morgan analyst Ryan Brinkman noted that Autoliv’s first-quarter report in April beat his earnings estimate, but met the consensus view. Brinkman wrote in a report that he saw “lower-than-expected margin on higher-than-expected sales.” Brinkman maintained a Neutral rating on Autoliv stock with an $88 price target.

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 edward.lin@barrons.com and follow @BarronsEdLin.