American International Group Inc (AIG), Netflix, Inc. (NFLX): Jana Partners Jams Things Up

New additions

Meanwhile, Jana did add BMC Software, Inc. (NASDAQ:BMC) and The Boeing Company (NYSE:BA) to its portfolio during the first quarter. BMC is now its eighth-largest holding, and Boeing is at 11th. BMC appears to be a merger-arb play for Jana. BMC announced in early May that it will be acquired by a group of private equity firms for $46.25 per share.

Boeing has been gaining momentum on the back of solid 1Q EPS results. The company posted EPS of $1.73, compared to $1.40 for 1Q 2012. Its backlog also grew by $20 billion net orders during 1Q to a total $392 billion backlog.

Boeing and Airbus own the large commercial-aircraft market. From 2009 to 2012, based on total unit orders of 150-plus seat jetliners, Boeing owned 49% and Airbus 51% of the large commercial-aircraft market.

Meanwhile, The Boeing Company (NYSE:BA)’s stock has showed little overhang from the grounding of its 787 Dreamliner, as the stock is up 35% over the past six months. The stock could see further upside on the back of a rebounding economy; a strengthening economy will lead to greater travel, which will in turn lead to higher commercial aircraft demand.

Bottom line

Jana sold off some key companies, while snatching up the likes of BMC Software, Inc. (NASDAQ:BMC) and Boeing. I think the American International Group Inc (NYSE:AIG) sell-off was warranted and believe the insurer could be getting overvalued at current levels. Meanwhile, Jana’s other sell-offs, Tripadvisor Inc (NASDAQ:TRIP) and Netflix, Inc. (NASDAQ:NFLX), are well timed (both are up more than 25% over the last three months), as I see little upside for these stocks.

BMC is a merger-arb play and will provide little return for investors unless they have sizable capital to deploy. However, Boeing should perform nicely on the back of a strengthening economy.

The article Jana Partners Jams Things Up originally appeared on Fool.com and is written by Marshall Hargrave.

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