Billionaire Barry Rosenstein’s Top Q4 Moves: Alphabet (GOOG), Bristol-Myers (BMY), More

Founded in 2001, JANA Partners is led by billionaire Barry Rosenstein, along with co-portfolio managers David DiDomenico and Scott Ostfeld. It is a value-oriented and event-driven hedge fund that invests in companies undergoing or expected to undergo change. JANA Partners buys large stakes in companies and then pushes them to restructure, leading to value accretion for investors. Recent performance by the hedge fund has not been up to the mark, with the fund losing 4.1% during the first seven months of 2016, as reported by Fortune. It was also down by 5.4% in 2015. Despite these setbacks, JANA Partners says that it will stick to its core strategy and believes that it will prove to be the right one over the long-term.

The latest 13F filed by the fund showed that it had major holdings in the consumer, healthcare, industrial, and IT sectors. The filing also disclosed new stock purchases in 19 companies, while it exited 23 positions during the October-December period. The fund’s 13F portfolio value declined by a mere $7 million quarter-over-quarter, to $5.70 billion. In this article we’ll look at some of the top purchases and sales made by one of the 140 Biggest and Most Famous Activist Hedge Funds during the previous quarter.

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Though Barry Rosenstein sold 5.07 million shares of Conagra Brands Inc. (NYSE:CAG) in the fourth quarter, it was still the fund’s largest holding at the end of December, consisting of 17.78 million shares worth $703 million. Activist Dan Loeb’s Third Point LLC also decreased its position in the stock by 2.46 million shares to a total of 3 million as of the end of the last quarter. The selling in the company’s shares could be due to the poor stock performance, as shares have fallen by 5% over the last year. Conagra Brands Inc. (NYSE:CAG) is one of the world’s largest food producers, owning top food consumer brands such as Healthy Choice, Slim Jim, and Egg Beaters. For the full 2017 year, the Company expects net sales to decrease by 4%-5% and adjusted earnings to come in between $1.65 and $1.70 per share. The company is also focusing on evolving its portfolio to meet the changing food preferences of people. As per our database, the number of funds long Conagra Brands Inc. (NYSE:CAG) decreased by eight in the fourth quarter to 42, while the value of their holdings also declined to $1.89 billion from $2.74 billion during the quarter.

JANA Partners more than doubled its holding in HD Supply Holdings Inc. (NASDAQ:HDS) in the final quarter of 2016, buying 6.17 million shares to hold 14.5 million shares worth $616 million at the end of the year. This made the industrial distributor the second-largest holding of Barry Rosenstein & Co. and gave the fund 7.2% equity ownership of HD Supply Holdings Inc. (NASDAQ:HDS). Other top buyers of the stock in Q4 were Third Point, Suvretta Capital Management and Millennium Management. HD Supply Holdings Inc. (NASDAQ:HDS) operates in the water infrastructure, residential and non-residential construction sectors and has more than 500,000 customers. The stock has been on a roll, with its price increasing by 65% over the last year, and the industrial sector is expected to do well under the new business-friendly Republican administration, so further share price appreciation could be in store. The company recently announced the appointment of Brad Cowles as its Chief Operating Officer (COO). At the end of December, shares worth $2.49 billion were held by 55 funds that we track, a big jump from just 40 funds a quarter earlier.

On the next page we’ll check out three more big moves made by JANA Partners in the fourth quarter.

JANA sold off its entire stake of 5.1 million shares in Coca-Cola European Partners plc Ordinary Shares (NYSE:CCE) during the fourth quarter. On the other hand, Daniel S. Och’s OZ Management initiated a new position in the stock during the quarter, buying 3.63 million shares. JANA Partners held onto its position for only 6 months. During that time, shares of Coca-Cola European Partners plc Ordinary Shares (NYSE:CCE) declined by 12%. However, the stock performance has improved and shares are up by more than 13% since the beginning of 2017. For its fiscal 2016, CCEP expects revenue growth of around 1% and earnings per share growth in the mid-teens. Going forward, the company said that it will focus on brand and package innovation, customer service, and on strengthening its execution. According to our system, 26 hedge funds held 4.8% of the company’s float as of December 31.

Barry Rosenstein started a new position in Bristol-Myers Squibb Co. (NYSE:BMY) during the December quarter, buying 3.8 million shares worth $226 million at the end of December. In sharp contrast, Julian Robertson’s Tiger Management sold off its entire stake of 400,800 shares in the drug giant by the end of the fourth quarter. The U.S based healthcare company has seen its stock price fall by 6.5% in 2017. Three new independent directors were added to Bristol-Myers’ Board on the recommendation of JANA Partners in February, alongside the company announcing a $2 billion share buyback program. However, its earnings for the fourth quarter came in at just $0.63 per share, falling short of the consensus estimate of $0.67. Though the top-line figure was $5.24 billion, beating the analyst estimate of $5.12 billion, the results were received poorly by the market, outdoing the recent news related to JANA. The number of funds in our system long Bristol-Myers Squibb Co. (NYSE:BMY) inched down by one to 58 during the October-December period.

JANA Partners exited its position in Alphabet Inc. (NASDAQ:GOOG), selling 196,023 Class C shares during the fourth quarter. That comes after JANA had reduced its stake in the company by 317,658 shares during the third quarter. The fund may be ruing its decision, as the stock has shot up by 7.7% so far in 2017. Alphabet Inc. (NASDAQ:GOOG) announced that its smartphone Pixel did incredibly well during the holiday season, selling out a majority of its variants. Alphabet Inc.’s (NASDAQ:GOOG) high-speed internet business, Google Fiber, recently announced major changes, including a new CEO and a new business strategy to focus on providing internet through wireless services. At the end of the fourth quarter, 126 funds in our database held $12.74 billion worth of Alphabet Inc. (NASDAQ:GOOG)’s Class C stock, versus 134 funds at the end of the third quarter.

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