Barry Rosenstein picked up in January where he left off last year. The eponymous flagship hedge fund managed by his firm, JANA Partners, posted a 0.50 percent gain last month. This was the long-short fund’s seventh consecutive profitable month and its eighth out of the past nine months. JANA Nirvana, a more turbo charged version of that fund, gained 0.80 percent last month.
Even so, the funds, which are most known for their activist stakes, lagged the Standard & Poor’s 500 stock index, which rose 1.8 percent last month.
Jana’s gains were driven in large part by two of its five largest positions at the end of the fourth quarter. MPLX, one of two of its largest long holdings that were also newly established positions in the fourth quarter, surged more than 9 percent last month. The master limited partnership (MLP) specializes in midstream energy infrastructure assets.
Shares of Liberty Broadband, Jana’s largest long at the end of the third quarter, surged more than 15 percent last month. On the other hand, Bristol-Myers Squibb, which immediately became a top-five holding after Jana established a new position in the fourth quarter, sank nearly 16 percent last month.
Drug stocks in general have been struggling for about one-and-a-half years, since then-presidential candidate Hillary Clinton criticized them for their high prices. President Trump concurred with her earlier in the week when he addressed the same issue in a meeting with pharmaceutical executives. Keep in mind that Thursday, February 2, is the deadline for an investor to submit nominees for the board of directors at Bristol Myers.
The other two of Jana’s five largest longs at year-end lost small amounts of money in January. ConAgra fell 1.1 percent and HD Supply Holdings was off less than 1 percent. In early January JANA sold roughly 6.4 million shares of HD Supply Holdings, reducing its stake to 4.9 percent.
In late October JANA disclosed owning 16.25 million shares, or 8.1 percent of the total. At the time it said the stock was undervalued and is a good investment. It also said it had held discussions with management regarding strategic alternatives and financial and operational ways to boost the stock price.
JANA started 2017 with $6 billion. This was nearly half the $11.6 billion it was managing just one year ago.
A second-half rally enabled it to avoid suffering a second consecutive annual loss. JANA finished the year up between 2.2 percent and 2.4 percent, depending on the fund class. JANA Nirvana rose between 3.2 percent and 3.5 percent.
Last March the firm sold a 20 percent stake to Dyal Capital Partners, a unit of New York money manager Neuberger Berman, which has been buying interests in hedge fund firms.
