Jana Partners shows her confidence – GuruFocus.com


Jana Partners (Trades, Portfolio) unveiled its portfolio for the third quarter of 2021. The company’s main transactions include new purchases in Macy’s Inc. (M, financial) and Valvoline Inc. (VVV, Financial), reductions in the company’s holdings in the S&P 500 ETF Trust (TO SPY, Financial) and Laboratory Corp of America Holdings (LH, Financial) alongside an addition to its Treehouse Foods Inc. (THS, Financial situation.

The activist company was founded by Barry Rosentein in 2001 and takes a value-driven approach to investing. The team is looking for companies that are undergoing or should undergo changes brought about by certain events. They seek to help create value by becoming an actively involved shareholder.

Portfolio overview

At the end of the quarter, the company’s portfolio contained 10 stocks with three new holdings, including BlackSky Technology Inc. (BKSY, Financial). It was valued at $ 1.25 billion and had a turnover rate of 17%. The main holdings in the company’s portfolio include Conagra Brands Inc. (CAG, Financial), Treehouse Foods, Vonage Holdings Corp. (VG, Financial), Encompass Health Corp. (EHC, Financial) and CyrusOne Inc. (CONE, Financial).

The most represented sectors are defensive consumption (38.27%), healthcare (20.7%) and communication services (12.99%).

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Macy’s

For the first time since 2016, the company created a new stake in Macy’s (M, Financial). The managers bought 4.62 million shares which traded at an average price of $ 20 throughout the quarter. Overall, the purchase had an 8.36% impact on the equity portfolio and is now the company’s seventh position. GuruFocus estimates that the firm gained 35.70% on the holding.

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Founded in 1858, Macy’s operates nearly 600 stores under the Macy’s brand, 56 stores under the Bloomingdale’s brand and approximately 160 independent Bluemercury beauty stores. Macy’s also operates e-commerce sites, owns 65% of a Chinese e-commerce joint venture, and licenses two Bloomingdale’s stores in the United Arab Emirates and Kuwait. Women’s clothing, accessories, footwear, cosmetics and perfumes accounted for 58% of Macy’s 2020 sales. The retailer recently consolidated its headquarters in New York.

On December 2, the stock was trading at $ 27.41 per share with a market cap of $ 8.17 billion. According to the GF Value Line, the stock is trading at a significantly overvalued rating.

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GuruFocus gives the company a financial strength rating of 4 out of 10, a profitability rating of 6 out of 10, and a valuation rating of 8 out of 10. Two serious warning signals are issued for declining gross margin and a drop in income per share. The company has seen a steady decline in revenue over the past five years and struggled this year with net profit falling into the red.

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Macy’s (M, Financial) the shares are also held by

David tepper (professions, portfolio),

Jim simons (businesses, portfolio) ‘Renaissance Technologies,

Yacktman Asset Management (trades, portfolio), the

Yacktman Fund (trades, portfolio) and the

Yacktman Focused Fund (trades, portfolio).

S&P 500 Trust ETF

The company reduced its S&P 500 ETF Trust (TO SPY, Financial) holding 56.24% with the sale of 183,700 shares. The shares sold for an average price of $ 439.92 throughout the quarter, allowing the company to realize an estimated total gain of 21.65% on the stake. The sale had an impact of -6.49% on the entire equity portfolio.

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The ETF has performed well since the start of the year, posting a gain of 21.67%. As of Dec. 2, the shares were trading at $ 458.33 per share, but posted a loss of 4.03% over the past week amid the market decline.

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ETF shares are also held by

Ray dalio (professions, portfolio),

Paul tudor jones (professions, portfolio),

Joel greenblatt (professions, portfolio),

Warren buffett (trades, portfolio) and

Al gore (trades, portfolio).

Corp of America Laboratory

Jana Partners (Trades, Portfolio) has also withdrawn its Laboratory Corp. of America (LH, Financial situation. The company reduced the position by 33.4% with the sale of 193,290 shares. During the quarter, the shares traded at an average price of $ 293.32. GuruFocus estimates that the company gained 22.13% of the stake and that the sale had a -4.40% impact on the equity portfolio.

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Laboratory Corp. of America is one of the country’s two largest independent clinical laboratories, with approximately 20% of the independent laboratory market. The company operates approximately 2,000 patient service centers, offering a wide range of 5,000 clinical laboratory tests, ranging from routine blood and urine tests to complex oncology and genomic tests. With the addition of Covance, LabCorp also has a significant footprint in the global contract research organization market.

The stock was trading at $ 292.10 per share with a market cap of $ 27.95 billion on Dec. 2. The GF value line shows that the stock is trading at a slightly overvalued rating.

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GuruFocus gives the company a financial strength rating of 5 out of 10, a profitability rating of 9 out of 10 and a review rating of 8 out of 10. There are currently no serious warning signs for the company. business, but average signs are warning insiders. Sell ​​and share prices approaching a 10-year high. The company’s cash-to-debt ratio of 0.32 ranks worse than 80.32% of industry competitors and has reduced overall financial strength.

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Other major guru shareholders of LabCorp (LH, financial) include

Vanguard Healthcare Fund (professions, portfolio),

Andreas Halvorsen (professions, portfolio),

John rogers (trades, portfolio), the firm Simons and

Wallace weitz (trades, portfolio).

Treehouse foods

The company’s second-largest stake, Treehouse Foods (THS, Financial), rose 35.07% with the purchase of an additional 1.33 million shares. Equity edged down in the second quarter, and stock prices fell to an average of $ 40.91 per share in the third quarter. Overall the purchase had a 4.27% impact on the equity portfolio and GuruFocus estimates the total loss of the stake at 9.30%.

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Treehouse Foods, the largest private label manufacturer in the United States, is the product of a multitude of acquisitions, the most significant being the 2016 acquisition of Ralcorp, Conagra’s former private label company. The company operates in more than 25 categories, including single-serving snacks, meals and beverages. Retailers are its most important end market, where it sells products for resale under retail brands, but it also serves restaurant customers (providing a service similar to its retail business), industrial ( selling bulk food for repackaging and reuse) and branded consumer goods (under co-packing agreements).

On December 2, the stock was trading at $ 39.24 per share with a market cap of $ 2.18 billion. According to the GF Value Line, the stock is trading at a slightly undervalued quote.

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GuruFocus gives the company a financial strength rating of 4 out of 10, a profitability rating of 5 out of 10, and a review rating of 9 out of 10. There are four serious warning signs for a declining gross margin , lower operating margin, lower earnings per share and an Altman Z-Score placing the company in the distress column. 2020 has turned out to be a strong year for the company with a return on capital well above the weighted average cost of capital.

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the Simons firm,

Steven scruggs (professions, portfolio),

Ray dalio (professions, portfolio),

Keeley-Teton Advisors, LLC (trades, portfolio) and

Ken fisher (Trades, Portfolio) also own Treehouse Foods (THS, financial).

Valvoline

A new takeover of Valvoline (VVV, Financial). The company bought 1.27 million shares to establish a stake in the auto products supplier for the first time since 2016. The shares traded at an average price of $ 31.05 during the quarter, for a gain estimated total of 6.34% on participation. The new purchase had an overall impact of 3.18% on the equity portfolio.

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Valvoline produces, markets and sells automotive care products, in particular lubricants, to points of sale and installers around the world. The company caters to DIY customers by selling products to auto parts stores and major mass merchants through direct sales and distributors. Valvoline targets the DIY segment by selling products to car dealerships, general repair shops and third-party quick lube lines. Valvoline also operates and franchises rapid lube oil change centers, in addition to selling Valvoline branded products and signage to smaller scale independent operators.

As of Dec. 2, the stock was trading at $ 34.79 per share with a market cap of $ 6.28 billion. The GF value line shows that stocks are trading at a slightly overvalued rating.

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GuruFocus gives the company a financial strength rating of 4 out of 10 and a profitability rank of 7 out of 10. There are three serious warning signs for assets growing faster than revenue, declining gross margin and a declining operating margin. Despite the warning sign, the company’s operating margin of 15.43 exceeds 70.18% of industry competitors.

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Jana Partners (Trades, Portfolio) is joined by

Glenn greenberg (Trades, Portfolio), the firm Simons,

Mario gabelli (Trades, Portefeuille), Pioneer Investments and

Steven cohen (trades, portfolio).

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