3 Best Stocks to Buy According to Activist JANA Partners

2. Mercury Systems, Inc. (NASDAQ:MRCY)

JANA Partners’ Stake Value: $208,164,000

Percentage of JANA Partners’ 13F Portfolio: 18%

Number of Hedge Fund Holders: 19

JANA Partners kept its holding in Mercury Systems, Inc. (NASDAQ:MRCY) intact during Q2, but several funds tracked by Insider Monkey upped their stake in the military technology company in that period. Among them were fellow activist investor Jeffrey Smith’s fund Starboard Value LP, which increased its holdings by 11% to 3.94 million shares, and Kenneth Squire’s 13D Management, which upped its holdings by 7% to 212,350 shares.

JANA Partners initiated a stake in Mercury Systems, Inc. (NASDAQ:MRCY) during the third quarter of 2021 and boosted it substantially in the fourth quarter. In the same quarter, Bloomberg reported that JANA Partners had asked the company’s board to conduct a strategic review and explore options that might include a potential sale of the company. Following the U.S. Federal Trade Commission’s move to block the proposed acquisition of Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) by Lockheed Martin Corporation (NYSE:LMT), Canaccord Genuity’s analyst Austin Moeller released a note to clients at the beginning of the year, saying:

“This lawsuit likely signals that the FTC under its current leadership would promptly crush any attempt to sell Mercury Systems (MRCY) to a defense prime.

Given the widespread use of Mercury’s electronic components across a vast swath of aircraft, drone, missile and EW programs managed by the primes, getting a sale of Mercury to a major contractor into the end zone would be challenging to say the least.”

In June, Mercury Systems, Inc. (NASDAQ:MRCY) announced that as part of cooperation agreements with JANA Partners and Starboard Value, it had appointed former Blackboard Chairman and CEO, Bill Ballhaus, and ex-CEO of Maxar Technologies, Howard Lance, to its board.