As a new filing with the Securities and Exchange Commission showed, Barry Rosenstein‘s JANA Partners has added a new activist play to its equity portfolio in the form of Computer Sciences Corporation (NYSE:CSC). After initiating a minor stake with 2.75 million shares during the last quarter of 2014, JANA Partners has recently disclosed upping its exposure to the company to 8.37 million shares, which represent 5.9% of the company’s outstanding stock.
The stake, which includes options to purchase an additional 3.79 million shares, is activist by nature. Therefore, JANA Partners has conducted discussions with the company regarding strategic alternatives or intends to conduct them in the near future. Activist funds often build small positions that are not publicly disclosed and then go to the company with certain proposals, before taking them public. All in all, JANA Partners over the years has proved to be very effective regarding its activist moves. In October, JANA entered into an agreement with Civeo Corp (NYSE:CVEO) to appoint three independent directors to the board. Moreover, last year, Mr. Rosenstein tried to urge the board of PetSmart Inc. (NASDAQ:PETM) to consider a sale of the company and after the company resisted, nominated five directors to be elected to the board. However, at the end of 2014, PetSmart agreed to be acquired by a group led by BC Partners at $83.00 per share and JANA withdrew its candidates to the board.
JANA’s involvement in Computer Sciences Corporation (NYSE:CSC) is definitely big news for the IT Services & Consulting company and its shareholders. The company currently operates in three segments: Global Business Services, Global Infrastructure Services, and North American Public Sector. JANA’s activist involvement confirms earlier rumors that the company is considering a separation and sale of its North American Public Sector business. It is yet to be revealed if JANA will push for a sale of the NPS segment, or for a tax-free spin-off, but previous rumors stated that Computer Sciences Corporation has been in talks with several private equity firms regarding a potential leveraged buyout of the company and a sale of the NPS business. Therefore, with Mr. Rosenstein joining, we shall expect more news regarding the future of Computer Sciences Corporation soon.
During the fourth quarter, Computer Sciences Corporation (NYSE:CSC) has seen a decrease in popularity among the funds that we track with 26 of them reporting holding stakes, including five billionaire investors, down from 36 funds in the previous quarter. However, the aggregate value of the holdings held by the funds from our database went up to $889.87 million, from $866.50 million in the previous quarter. Billionaire Larry Robbins of Glenview Capital cut his exposure to the company by 13% during the last quarter of 2014, to 3.27 million shares.
Meanwhile, aside from Computer Sciences Corporation (NYSE:CSC), Mr. Rosenstein also added a couple of other stocks to JANA’s equity portfolio, which might become activist plays in the future. Interestingly enough, JANA’s largest new position in terms of value is represented by another IT Services & Consulting company, NCR Corporation (NYSE:NCR), of which the fund disclosed holding 12.0 million shares, valued at $349.87 million. NCR Corporation (NYSE:NCR) operates in the Financial Services, Retail Solutions, Hospitality and Emerging Industries segments. Also betting on NCR Corporation (NYSE:NCR) is another activist investor, Keith Meister of Corvex Capital, who raised his stake by 250% during the fourth quarter to 5.39 million shares.
Another interesting addition to JANA Partners’ equity portfolio is SolarCity Corp (NASDAQ:SCTY), in which the fund initiated a $275.86 million stake that contains 5.16 million shares. The stake accounts for 5.4% of the company’s stock and is currently disclosed as passive. There have been talks last year about the fact that he solar energy industry will start consolidating in order to ensure a more stable growth. There have even been rumors that General Electric Company (NYSE:GE) planned to acquire Sunedison Inc (NYSE:SUNE), which has however been denied by the former. Nevertheless, currently, SolarCity Corp (NASDAQ:SCTY)’s stock is down by 30% over the last 52-weeks, which also makes the company one of the top losers among mid-cap solar stocks. Other investors have also been moving out of the stock with 31 funds reporting holding the stock, versus 37 funds a quarter earlier. One of the funds that raised its stake in SolarCity Corp (NASDAQ:SCTY) during the fourth quarter is Ken Griffin’s Citadel Investment Group, which disclosed holding 448,200 shares in its latest 13F and Put options for 384,900 shares.
Disclosure: None
