Investment firm Jana Partners (Trades, Portfolio) revealed its first-quarter portfolio earlier this month.
Taking a value-oriented, event-driven approach to picking stocks, the New York-based firm founded in 2001 by Barry Rosenstein often enters activist positions in order to help unlock value for shareholders.
The 13F filing for the three months ended March 31 shows the firm added to its holdings of Fidelity National Information Services Inc. (FIS, Financial) and the S&P 500 ETF Trust (SPY, Financial), trimmed its positions in Mercury Systems Inc. (MRCY, Financial), Laboratory Corp of America Holdings Inc. (LH, Financial) and Freshpet Inc. (FRPT, Financial) and divested of the Encompass Health Corp. (EHC, Financial) investment.
Investors should be aware that 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Fidelity National Information Services
Jana increased the Fidelity (FIS, Financial) stake by 35.92%, investing in 919,652 shares. The transaction had an impact of 3.78% on the equity portfolio. The stock traded for an average price of $65.09 per share during the quarter.
It now holds a total of 3.48 million shares, which occupy 14.31% of the equity portfolio as the fourth-largest holding. GuruFocus estimates the firm has lost 21.78% on the investment so far.
Also known as FIS, the Jacksonville, Florida-based fintech company, which provides payment processing and electronic banking services, has a $31.68 billion market cap; its shares were trading around $53.48 on Wednesday with a price-book ratio of 1.17 and a price-sales ratio of 2.21.
The GF Value Line suggests the stock, while undervalued, appears to be a value trap currently based on its historical ratios, past financial performance and analysts’ future earnings projections. As a result, potential investors should cautiously investigate the situation before making a decision.
At 62 out of 100, the GF Score indicates the company has poor future performance potential. While it received moderate ratings for profitability, financial strength, value and momentum, the growth rank was low.
Of the gurus invested in Fidelity, Dodge & Cox has the largest stake with 4.64% of its outstanding shares. Barrow, Hanley, Mewhinney & Strauss, Hotchkis & Wiley, Seth Klarman (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Mason Hawkins (Trades, Portfolio) also have significant positions in the stock.
S&P 500 ETF Trust
The firm boosted its holding of the S&P 500 ETF Trust (SPY, Financial) by 94.56%, picking up 110,100 shares. The transaction impacted the equity portfolio by 3.41%. Shares traded for an average price of $397.73 each during the quarter.
Jana now holds 226,533 shares in total, accounting for the seventh-largest holding with a weight of 7.02%. GuruFocus data shows the firm has gained 8.95% on the investment to date.
The exchange-traded fund, which tracks the price and yield performance of the S&P 500 index, has a market cap of $392.23 billion; its shares were trading around $416.57 on Wednesday.
The ETF has a 14-day relative strength index of 59.96, indicating it is neither overbought nor oversold.
With a 0.13% stake, Ray Dalio (Trades, Portfolio)’s Bridgewater Associates currently has the largest holding in the ETF. Jefferies Group (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Al Gore (Trades, Portfolio), among many others, also have positions in the stock.
Mercury Systems
The Mercury Systems (MRCY, Financial) stake was reduced by 34.76%, or 1.06 million shares. The transaction had an impact of -3.88% on the equity portfolio. The stock traded for an average per-share price of $50.53 during the quarter.
The firm now holds 1.99 million shares, which make up 7.71% of the equity portfolio as the sixth-largest position. GuruFocus found it has lost an estimated 12.02% on the investment thus far.
The aerospace and defense company headquartered in Andover, Massachusetts has a $2.33 billion market cap; its shares were trading around $40.10 on Wednesday with a price-book ratio of 1.49 and a price-sales ratio of 2.26.
According to the GF Value Line, the stock, while undervalued, is a possible value trap currently.
The GF Score of 86 means the company has good outperformance potential on the back of high ratings for profitability, growth and value and moderate financial strength and momentum ranks.
Jana is the company’s largest guru shareholder with a 3.43% stake. Mercury Systems is also being held by Ron Baron (Trades, Portfolio), First Eagle Investment (Trades, Portfolio) and Ken Fisher (Trades, Portfolio).
Laboratory Corp of America
The Laboratory Corp of America (LH, Financial) position was trimmed by 10.81%, or 80,552 shares. The transaction impacted the equity portfolio by -1.55%. The stock traded for an average price of $239.52 per share during the quarter.
The firm now holds 664,346 shares, which represent the fifth-largest holding with a weight of 11.54%. GuruFocus says it has gained around 4.84% on the investment since the fourth quarter of 2020.
More commonly known as Labcorp, the Burlington, North Carolina-based company, which provides clinical laboratory testing services, has a market cap of $18.65 billion; its shares were trading around $210.52 on Wednesday with a price-earnings ratio of 19.10, a price-book ratio of 1.80 and a price-sales ratio of 1.29.
Based on the GF Value Line, the stock appears to be modestly undervalued currently.
Further, the GF Score of 95 implies the company has high future outperformance potential, driven by high ratings for profitability, growth and value and moderate financial strength and momentum ranks.
Holding a 1.68% stake, the Vanguard Health Care Fund (Trades, Portfolio) is Labcorp’s largest guru shareholder. The stock is also being held by John Rogers (Trades, Portfolio), Wallace Weitz (Trades, Portfolio), Charles Brandes (Trades, Portfolio), Simons’ firm, Jeremy Grantham (Trades, Portfolio) and many others.
Freshpet
Jana curbed the Freshpet (FRPT, Financial) stake by 3.16%, selling 130,875 shares. The transaction had an impact of -0.56% on the equity portfolio. During the quarter, shares traded for an average price of $61.41 each.
The firm now holds 4.01 million shares, reflecting 20.11% of the equity portfolio as the largest holding. According to GuruFocus, Jana has gained 31.15% on the investment.
Headquartered in Secaucus, New Jersey, the company, which makes and distributes fresh pet food under brands like Nature’s Fresh, Deli Fresh, Vital and Freshpet, has a $2.82 billion market cap; its shares were trading around $58.53 on Wednesday with a price-book ratio of 2.97 and a price-sales ratio of 4.63.
The GF Value Line suggests the stock, while undervalued, is a possible value trap currently.
The company is likely to have average performance going forward based on its GF Score of 74. Although the ratings for momentum and growth were high, the financial strength and value ranks were more moderate and profitability was low.
The largest guru shareholder of Freshpet is Jana with an 8.34% stake. Fisher, George Soros (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Dalio’s firm and Baillie Gifford (Trades, Portfolio) also own the stock.
Encompass Health
Impacting the equity portfolio by -1.89%, the firm exited its 387,062-share position in Encompass Health (EHC, Financial). The stock traded for an average per-share price of $58.21 during the quarter.
GuruFocus estimates Jana lost 10.17% on the investment over its lifetime. It was previously the ninth-largest position.
The Birmingham, Alabama-based company, which provides home health care services, has a market cap of $6.17 billion; its shares were trading around $61.51 on Wednesday with a price-earnings ratio of 22.78, a price-book ratio of 4.43 and a price-sales ratio of 1.30.
According to the GF Value Line, the stock is fairly valued currently.
The GF Score of 67 means the company has poor performance potential, receiving a high momentum rank and moderate ratings for profitability, financial strength and value. It did not receive a growth rating, however.
Vanguard has the largest stake in Encompass with 1.76% of its outstanding shares. Other gurus who own the stock are Cohen, Dalio’s firm, Keeley-Teton Advisors, LLC (Trades, Portfolio) and Jones.
Additional trades and portfolio composition
The firm did not make any other changes to its very concentrated portfolio. As of March 31, its other holdings were New Relic Inc. (NEWR, Financial), TreeHouse Foods Inc. (THS, Financial), Enhabit Inc. (EHAB, Financial) and BlackSky Technology Inc. (BKSY, Financial).
Jana’s $1.32 billion equity portfolio, which consists of nine stocks, is largely invested in the consumer defensive and technology sectors.
