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Best Stocks to Buy According to Billionaire Barry Rosenstein’s Jana Partners

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·8 min read
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In this article we will take a look at the best stocks to buy according to Billionaire Barry Rosenstein's Jana Partners. You can skip our detailed analysis of Rosenstein's history, investment philosophy, and hedge fund performance, and go directly to see the 5 Best Stocks to Buy according to billionaire Barry Rosenstein's Jana Partners.

Barry Rosenstein is an American billionaire, hedge fund manager, and the founder of JANA Partners LLC. He started his career as an investment banker specializing in mergers and acquisitions. His hedge fund, JANA Partners, was founded in 2001 with a value-oriented and event-driven approach towards selecting stocks. Before establishing JANA Partners, Rosenstein founded a private equity fund, Sagaponack Partners.

Barry Rosenstein's investment strategy includes shareholder engagement by bringing changes to the business models of companies. The hedge fund holds long-term positions in the companies and has a history of strategically applying changes in target companies’ functions. Recently, the hedge fund has partnered with Canada’s institutional investment fund to invest in The McGraw Hill Companies and suggested some corporate changes in the company’s structure. In 2018, JANA Partners announced a new fund, JANA Impact Capital to develop the corporate responsibilities in some of the largest companies and to focus more on social activism. In 2019, Rosenstein came up with a new strategy to invest in a few companies in order to improve their performance by suggesting changes.

As of Q1 2021, JANA Partners is managing a 13F stock portfolio of eight stocks, valued at $1.4 billion and a turnover ratio of 20.25%. Conagra Brands, Inc. (NYSE: CAG) is the largest hedge fund holding with over 10 million shares. In the first quarter, the hedge fund did not change its position in the company.

In terms of weight, the top three sectors were consumer goods, healthcare, and technology. This inclination of the fund in the technology sector can be seen from its newly found positions in telecommunication company Vonage Holdings Corp. (NASDAQ: VG) and data center provider, CyrusOne Inc. (NASDAQ: CONE). The companies account for 4.62% and 2.51% of the JANA Partners’ 13F portfolio, respectively. In May, Vonage Holdings Corp. (NASDAQ: VG) gained 4.1% after JANA Partners built a position in the company. The hedge fund is also proposing changes to the company, which, according to shareholders, will help the company to generate better returns.

JANA Partners increased its position in Laboratory Corporation of America Holdings (NYSE: LH), a diagnostic company, by 41%. In the first quarter, the hedge fund bought approximately 328k shares in Laboratory Corporation of America Holdings (NYSE: LH) at an average price of $233.6. Along with this, the fund also increased its stake in a food processing company, TreeHouse Foods, Inc. (NYSE: THS). JANA Partners bought over 2 million shares in the company during the first quarter. After the purchase, the hedge fund’s position in TreeHouse Foods, Inc. (NYSE: THS) grew by 104.1%.

To understand the context more, let’s analyze the list of best stocks to buy according to Billionaire Barry Rosenstein's Jana Partners. We used JANA Partner’s 13F portfolio for the first quarter of 2021 for this analysis.

Best Stocks to Buy According to Billionaire Barry Rosenstein's Jana Partners
Best Stocks to Buy According to Billionaire Barry Rosenstein's Jana Partners

Let's now discuss the 8 best stocks to buy according to Billionaire Barry Rosenstein's Jana Partners.

Best Stocks to Buy According to Billionaire Barry Rosenstein's Jana Partners

8. CyrusOne Inc. (NASDAQ: CONE)

JANA Partner’s Stake Value: $37,338,000 Percent of JANA Partner’s 13F Portfolio: 2.51% Number of Hedge Fund Holders: 21

CyrusOne Inc. (NASDAQ: CONE) is a real estate investment trust (REIT) that specializes in data centers and provides colocation and peering services. The company is the third-largest data center provider in the U.S. The portfolio of CyrusOne Inc. (NASDAQ: CONE) includes over 40 enterprise-class facilities in three continents. It is the eighth-largest holding of Barry Rosenstein's Jana Partners.

During the first quarter of 2021, Jana Partners bought over 551k shares of CyrusOne Inc. (NASDAQ: CONE), valued at $37.3 million. The company currently accounts for 2.51% of the hedge fund’s portfolio. In Q1 2021, CyrusOne Inc. (NASDAQ: CONE) reported a net income of $18.2 million, up from $14.7 million during the same period last year. The EPS of $0.15 beat the market consensus by $0.11. The revenue presented a 21% year-over-year increase at $298.6 million. The company’s board announced a quarterly dividend of $0.51 per share. In July, BMO Capital upgraded the CONE stock to ‘Outperform’ with an $81 price target. Since the beginning of the year, CONE has delivered a 4.2% return to shareholders.

As of Q1 2021, 21 hedge funds tracked by Insider Monkey have stakes in CyrusOne Inc. (NASDAQ: CONE), worth $202.4 million. The number of remained the same in the previous quarter.

Like Conagra Brands, Inc. (NYSE: CAG), Laboratory Corporation of America Holdings (NYSE: LH), Perspecta Inc. (NYSE: PRSP), Encompass Health Corporation (NYSE: EHC), and TreeHouse Foods, Inc. (NYSE: THS), CyrusOne Inc. (NASDAQ: CONE) is one of the best stocks to buy according to Billionaire Barry Rosenstein's Jana Partners.

7. Vonage Holdings Corp. (NASDAQ: VG)

JANA Partner’s Stake Value: $68,597,000 Percent of JANA Partner’s 13F Portfolio: 4.62% Number of Hedge Fund Holders: 36

Vonage Holdings Corp. (NASDAQ: VG) is an American telecommunication and software company that provides services in cloud communications. The company has over 1 million registered developers and serves around 100,000 businesses worldwide.

In Q1 2021, Jana Partners holds 5.8 million shares in c, worth $68.5 million. It is one of the latest acquisitions of the hedge fund, accounting for 4.62% of the fund’s portfolio. In the first quarter, the company reported a net income of $13 million, up from $12 million during the same period last year. The EPS stood at $0.05, beating the consensus of $0.04. The consolidated revenue was reported at $333 million, compared with $297 million in the prior-year quarter. The VG stock has gained 23.7% in the past year and 13.5% year to date. In June, Citigroup raised its price target on VG to $18 with a ‘Buy’ rating on the shares.

At the end of Q1 2021, 36 hedge funds tracked by Insider Monkey have positions in Vonage Holdings Corp. (NASDAQ: VG), worth $549.4 million. This number is compared to 37 funds in the previous quarter.

Like Conagra Brands, Inc. (NYSE: CAG), Laboratory Corporation of America Holdings (NYSE: LH), Perspecta Inc. (NYSE: PRSP), Encompass Health Corporation (NYSE: EHC), and TreeHouse Foods, Inc. (NYSE: THS), Vonage Holdings Corp. (NASDAQ: VG) is one of the best stocks to buy according to Billionaire Barry Rosenstein's Jana Partners.

Adestella Investment Management published its fourth-quarter investor letter and mentioned Vonage Holdings Corp. (NASDAQ: VG) and other stocks in it. Here is what the firm has to say:

“Vonage (VG) – the VG thesis has largely played out as expected. The market has gradually shifted its focus from the declining consumer operations to the growing business ones, highlighted by the API unit. As its legacy home phone VOIP solutions continue to become a smaller and smaller portion of the overall pie, we think this trend will continue. If the API unit can continue to grow at 25-30%, that segment alone covers most of the enterprise value at just a ~6x sales multiple before giving any credit to the sizable UCaaS operations. The API unit’s closest comparable, Twilio (TWLO), currently trades at 31x sales, so it’s not unreasonable to think there’s upside to our estimate here. Shares have returned around 80% since our writeup (and slightly higher from our cost as we added in the weeks that followed), but we’ve maintained most of our position as the key growth drivers remain intact.”

6. SPDR S&P 500 ETF Trust (NYSE: SPY)

JANA Partner’s Stake Value: $139,497,000 Percent of JANA Partner’s 13F Portfolio: 6.42% Number of Hedge Fund Holders: 73

An exchange-traded fund, SPDR S&P 500 ETF Trust (NYSEARCA: SPY) is the sixth-largest holding of Barry Rosenstein's Jana Partners. The fund holds 240,347 shares in the trust, worth $95.2 million. In the first quarter, the hedge fund has reduced its stake by 13% in SPDR S&P 500 ETF Trust (NYSEARCA: SPY). It now accounts for 6.42% of the fund’s portfolio.

Since the beginning of the year, the SPY stock has delivered a 19.29% return to shareholders, extending the 12-month gains to 36.1%.

As of Q1 2021, 73 hedge funds tracked by Insider Monkey have positions in SPDR S&P 500 ETF Trust (NYSEARCA: SPY), worth $3.6 billion.

Like Conagra Brands, Inc. (NYSE: CAG), Laboratory Corporation of America Holdings (NYSE: LH), Perspecta Inc. (NYSE: PRSP), Encompass Health Corporation (NYSE: EHC), and TreeHouse Foods, Inc. (NYSE: THS), SPDR S&P 500 ETF Trust (NYSEARCA: SPY) is one of the best stocks to buy according to Billionaire Barry Rosenstein's Jana Partners.

Click to continue reading and see the 5 Best Stocks to Buy According to Jana Partners.

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Disclosure. None. Best Stocks to Buy According to Billionaire Barry Rosenstein's Jana Partners is originally published on Insider Monkey.