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QEP Resources Inc (QEP): JANA Partners Sells Its Entire Stake

Barry Rosenstein’s JANA Partners has divested its entire stake as an activist investor in QEP Resources Inc (NYSE:QEP). According to the latest filing with the Securities and Exchange Commission (SEC),  the fund sold 12.91 million shares or 7.2% of all common stock of the company, that it held at the beginning of September, at an average price of $22.52 per share. At the end of second quarter the fund held 15.31 million shares of the company, which it started selling in several tranches during the third quarter.

Barry Rosenstein JANA PARTNERS

Rosenstein founded JANA Partners in 2001. It’s a New York-based value oriented, event-driven fund that mainly invests in companies undergoing or expected to undergo a major change. Currently the fund manages over $16 billion in assets, the largest of which is invested in basic materials, followed by the services sector. JANA Partners initiated its stake in QEP Resources Inc (NYSE:QEP) in third quarter of 2012 by purchasing 1.9 million shares, QEP Resources Inc (NYSE:QEP)’s stock has fallen around 20% since then. Currently the fund’s largest equity holding is Walgreen Company (NYSE:WAG), in which it recently increased its stake to 13.75 million shares, followed by Equinix Inc (NASDAQ:EQIX), which is up more than 10% year-to-date. The fund increased its exposure in Actavis plc (NYSE:ACT) by 195% to 2.65 million shares during the second quarter.

QEP Resources Inc (NYSE:QEP) is a $4.25 billion, oil and natural gas exploration and production company. In its earlier filing with the SEC, JANA Partners mentioned that it supported the company’s decision to spin-off its midstream business into a separate entity.  For the second quarter of 2014, the company reported EBITDA of $400.8 million and negative EPS of $0.51, compared to EBITDA of $389 million and EPS of $0.99 per share in same quarter of last year. The company currently trades at 15.5 times its forward earnings, while the average trailing P/E of the industry is 33.52.

Other major institutional investors that own QEP Resources Inc (NYSE:QEP)’s stock include David Shaw’s firm, D.E. Shaw, and Bart Baum’s Ionic Capital Management. During second quarter of 2014, D.E. Shaw reduced its stake in the company by 12% to over 4 million shares, and Ionic Capital Management reduced its stake by 5% to over 1.2 million shares of the company. On March 17, David A Trice, a director of QEP Resources Inc (NYSE:QEP), purchased 2,500 shares of the company at an average price of $28.40, taking his total holding to 10,000 shares.

Analysts are upbeat about QEP Resources Inc (NYSE:QEP). Consensus rating among analysts for the stock is ‘Overweight’, with an average price target of $37.56.

Disclosure: None

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