| Barry Rosenstein (Andrew Harrer/Bloomberg) |
Barry Rosenstein’s JANA Partners suffered its first setback in nearly a year.
The sometime-activist hedge fund firm posted a loss in May, its first monthly decline since last June. The loss came after the firm made many changes to its portfolio in the first quarter.
Specifically, its flagship JANA Partners fund lost 0.70 percent in May, trimming its gain for the year to 4.6 percent.
JANA Nirvana, its more turbocharged fund, lost 1 percent last month and is now up 6.9 percent for the year. The Standard & Poor’s 500 stock index rose 1 percent in May and is up 7.73 percent for the year.
In the first quarter, JANA established 16 new stock positions, including four that wound up becoming among its top eight long holdings: Whole Foods, Tiffany, Dow Chemical Co., and Sherwin Williams.
JANA also liquidated 20 individual stock positions in the first quarter, including Team Health Holdings, a former activist target.
It is not known which stocks the hedge fund firm is short. At the end of the first quarter, however, it did have a big put option position in an exchange-traded fund that tracks the S&P 500.
In any case, JANA was badly hurt in May by its largest long positions, especially its two newest activist targets. Whole Foods, its largest long position, fell nearly 4 percent last month. JANA has launched a proxy fight against the upscale natural grocer, nominating five individuals to its board of directors.
In late April, the stock had briefly jumped on reports that supermarket giant Albertsons, controlled by private equity firm Cerberus Partners, may be interested in Whole Foods, which is known for its gourmet foods and its high prices. JANA disclosed an 8.3 percent stake in Whole Foods on April 10. Recently, it slightly trimmed this position.
Shares of luxury jewelry retailer Tiffany, another new position for JANA during the first quarter, fell more than 5 percent last month. They are off nearly 9 percent over the past two months, although the investment is still in the black since JANA started buying the stock in early January. In February Tiffany agreed to add three directors to its board as part of a deal with JANA.
Meanwhile, Liberty Broadband, JANA’s third-largest long holding, lost 2 percent last month, while Universal Health Services fell nearly 6 percent.
Of JANA’s other two major new positions, Dow Chemical shed about 1.3 percent and Sherwin Williams lost less than 1 percent last month. The paint and home improvement retailer is up 23 percent for the year, however. Of course, we don’t know what JANA paid for the shares, but they have gained 7 percent since the last day of the March quarter.
