This article discusses the top 3 stock picks of billionaire Billionaire Barry Rosenstein’s JANA Partners at the end of June 2022. To know more about Mr Rosenstein’s journey, JANA Partners’ activist stakes, and recent changes the fund made to its portfolio, please check out 7 Best Stocks to Buy According to Billionaire Barry Rosenstein’s JANA Partners.
3. Laboratory Corp. of America Holdings (NYSE:LH)
JANA Partners’ Stake Value: $198,727,000
Percentage of JANA Partners’ 13F Portfolio: 17.18%
Number of Hedge Fund Holders: 39
Apart from New Relic Inc (NYSE:NEWR), Laboratory Corp. of America Holdings (NYSE:LH) was another stock in which JANA Partners went for a significant increase in its holdings – by 88% to 847,958 shares – during Q2. JANA had disclosed a stake in the diagnostics and drug development company for the first time in the last quarter of 2020. After initiating the stake, the fund launched its activist campaign, which included nominating several directors, including industry veteran Mac Crawford to the company’s board.
The activist campaign launched by JANA seems to have succeeded quickly, with Laboratory Corp. of America Holdings (NYSE:LH) announcing a $2.5 billion stock buy-back and future dividend payments to shareholders in December last year. Furthermore, in July this year, the company also announced its plans to spin off its clinical development business into an independent, publicly-traded contract research organisation (CRO). This development can be attributed to Laboratory Corp. of America Holdings (NYSE:LH) launching a strategic review in March 2021 after being pushed for it by JANA Partners.
2. Mercury Systems, Inc. (NASDAQ:MRCY)
JANA Partners’ Stake Value: $208,164,000
Percentage of JANA Partners’ 13F Portfolio: 18%
Number of Hedge Fund Holders: 19
JANA Partners kept its holding in Mercury Systems, Inc. (NASDAQ:MRCY) intact during Q2, but several funds tracked by Insider Monkey upped their stake in the military technology company in that period. Among them were fellow activist investor Jeffrey Smith’s fund Starboard Value LP, which increased its holdings by 11% to 3.94 million shares, and Kenneth Squire’s 13D Management, which upped its holdings by 7% to 212,350 shares.
JANA Partners initiated a stake in Mercury Systems, Inc. (NASDAQ:MRCY) during the third quarter of 2021 and boosted it substantially in the fourth quarter. In the same quarter, Bloomberg reported that JANA Partners had asked the company’s board to conduct a strategic review and explore options that might include a potential sale of the company. Following the U.S. Federal Trade Commission’s move to block the proposed acquisition of Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) by Lockheed Martin Corporation (NYSE:LMT), Canaccord Genuity’s analyst Austin Moeller released a note to clients at the beginning of the year, saying:
“This lawsuit likely signals that the FTC under its current leadership would promptly crush any attempt to sell Mercury Systems (MRCY) to a defense prime.
Given the widespread use of Mercury’s electronic components across a vast swath of aircraft, drone, missile and EW programs managed by the primes, getting a sale of Mercury to a major contractor into the end zone would be challenging to say the least.”
In June, Mercury Systems, Inc. (NASDAQ:MRCY) announced that as part of cooperation agreements with JANA Partners and Starboard Value, it had appointed former Blackboard Chairman and CEO, Bill Ballhaus, and ex-CEO of Maxar Technologies, Howard Lance, to its board.
1. TreeHouse Foods, Inc. (NYSE:THS)
JANA Partners’ Stake Value: $214,582,000
Percentage of JANA Partners’ 13F Portfolio: 18.55%
Number of Hedge Fund Holders: 20
With JANA Partners selling all of its holdings in Zendesk, Inc. (NYSE:ZEN) during Q2, TreeHouse Foods, Inc. (NYSE:THS) jumped a spot and became the fund’s most favourite stock pick at the end of June. The popularity of the private label foods and beverages company among smart money investors has been on a consistent decline in the last two years. The number of hedge funds tracked by Insider Monkey that reported a stake in the company fell to 20 at the end of June this year from 33 at the end of Q2 2020.
On December 30, 2021, JANA Partners, through a regulatory filing, revealed that it had nominated two directors – Chris Sliva and Wendy Beck – to TreeHouse Foods, Inc.’s (NYSE:THS) board. Earlier this year, in April, the company announced that as part of an agreement with JANA Partners, it had appointed Scott Ostfeld, a partner at JANA, to the company’s board. On August 11, TreeHouse Foods, Inc. (NYSE:THS), through a press release, revealed that it had entered into a definitive agreement to sell a ‘significant portion’ of its meal preparation business to Investindustrial for $950 million. As part of that agreement, TreeHouse Foods, Inc. (NYSE:THS) will receive $530 million in cash when the deal closes, but it will provide $420 million in senior secured debt that would be due in 2027.
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