Jana Partners (Trades, Portfolio), a New York-based investment firm, revealed this week that its top five deals in the first quarter included reducing its holdings in Perspecta Inc. (PRSP, Financial) and Encompass Health Corp. (EHC, Financial), the closing of its position in Bloomin Brands Inc. (BLMN, Financial) and strengthens its stakes in Treehouse Foods Inc. (THS, Financial) and Laboratory Corp of America Holdings (LH, Financial).
Founded in 2001 by Barry Rosenstein, Jana takes both long and short positions in debt and equity securities. The company applies a fundamental value discipline to identify undervalued companies in which event catalysts can unlock shareholder value.
As of March 31, the company’s $ 1.48 billion stock portfolio includes eight stocks, two new positions and a 20% turnover rate. The top three sectors in terms of weight are defensive consumption, healthcare and technology, accounting for 42.16%, 29.01% and 15.28% of the equity portfolio.
Jana disclosed a holding of 7,800,242 Perspecta shares (PRSP, Financial), down 48.97% from the holding of 15,286,875 shares in the December 2020 quarter. The share ceased trading following the company’s merger with private equity firm Veritas Capital’s Peraton May 6.
According to Peraton’s website, the acquisition of the Chantilly, Va.-Based information technology company makes the Herndon, Va.-Based company a major mission capability integrator and technology provider. transformative business information. This acquisition follows Peraton’s merger earlier this year with the integrated mission support and IT solutions business of Northrop Grumman (NOC).
Jana sold 889,854 shares of Encompass Health (EHC, Financial), removing 34.32% of the position and 4.98% of the portfolio. Shares averaged $ 81.98 in the first quarter; the stock is slightly overvalued based on Friday’s GF price-to-value ratio of 1.16.
GuruFocus ranks the profitability of the Birmingham, Alabama-based healthcare provider 8 out of 10 on several positive investment signs, which include operating margin and return on equity that outperform more than 80% of its global competitors. In addition, the website awards Encompass Health the business predictability rank of four stars.
Other gurus with stakes in Encompass Health include
Vanguard Healthcare Fund (Trades, portfolio) and
Steven cohen (Trades, Portfolio) from Point72 Asset Management.
Jana sold 4,001,336 shares of Blooming Brands (BLMN, Financial), freeing up 5.26% of its equity portfolio. Shares averaged $ 24.20 in the first quarter; the stock is significantly overvalued based on Friday’s GF price-to-value ratio of 1.87.
GuruFocus ranks the financial strength of the Tampa, Florida-based casual restaurateur third on several warning signs, including a low Piotroski F score of 3, a low Altman Z score of 0.78, and ratios of debt less than 85% of the world rate. competitors.
Jana bought 2,118,801 shares of Treehouse Foods (THS, Financial), increasing the stake by 104.16% and the equity portfolio by 7.46%. Shares averaged $ 47.33 in the first quarter; the security is fairly valued on the basis of Friday’s GF price / value ratio of 1.06.
GuruFocus ranks the financial strength of the Oak Brook, Illinois-based consumer packaged food company at 4 out of 10: Although the company has a strong Piotroski F-score of 6, Treehouse Foods has a low Altman score. Z of 1.49 and coverage of interest and debt ratios that underperform over 77% of global competitors.
Corp of America Laboratory
Jana bought 327,927 shares of Laboratory Corp of America (LH, Financial), strengthening the position by 40.4% and the equity portfolio by 5.64%. Shares averaged $ 233.67 in the first quarter; the stock is slightly overvalued based on Friday’s GF price-to-value ratio of 1.13.
GuruFocus ranks the profitability of the Burlington, NC-based clinical laboratory research firm at 9 out of 10 on several positive investment signs, including a four-star business predictability ranking, a high Piotroski F score of 8, and an operating margin that has grown by around 5.7% per year on average over the past five years and outperforms over 83% of global competitors.
Disclosure: No position.
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