According to a freshly-submitted Schedule 13D form filed with the Securities and Exchange Commission, Barry Rosenstein’s JANA Partners owns 30.57 million shares (including options to purchase 19.03 million shares) of ConAgra Foods Inc. (NYSE:CAG), which represent 7.1% of the company’s outstanding shares of common stock. The event-driven hedge fund firm also entered into an agreement with ConAgra Foods to appoint Bradley A. Alford and Timothy R. McLevish to the company’s Board of Directors, which will subsequently increase the board composition to 14 members from 12.
Following activist funds like JANA is important because it is a very specific and focused strategy in which the investor doesn’t have to wait for catalysts to realize gains in the holding. A fund like Rosenstein’s can simply create its own catalysts by pushing for them through negotiations with the company’s management and directors. In recent years, the average returns of activists’ hedge funds has been much higher than the returns of an average hedge fund. Furthermore, we believe do-it-yourself investors have an advantage over activist hedge fund investors because they don’t have to pay 2% of their assets and 20% of their gains every year to compensate hedge fund managers. We have found through extensive research that the top small-cap picks of hedge funds are also capable of generating high returns and built a system around this premise. In the 34 months since our small-cap strategy was launched it has returned over 135% and beaten the S&P 500 ETF (SPY) by more than 80 percentage points (read more details).
JANA Partners is a New York-based hedge fund firm established by reputable activist investor, Barry Rosenstein, in 2001. Even though Rosenstein is part of a group of activists that includes Carl Icahn of Icahn Capital Management, Daniel Loeb of Third Point, and Bill Ackman of Pershing Square, he is different from the crowd because, unlike his peers, Rosenstein is a driven and collaborative activist who eschews aggressive public stances. He is among the most successful activist investors in recent years, making his JANA Partners an ideal instrument to unlock value for different companies by becoming an actively engaged shareholder. According to its most recent 13F filing, the public equity portfolio of the activist hedge fund firm is valued at $17.23 billion as of the end of the first quarter. In the meantime, some of its largest holdings at the end of the same quarter include: QUALCOMM Incorporated (NASDAQ:QCOM), Walgreens Boots Alliance Inc. (NASDAQ:WBA) and eBay Inc. (NASDAQ:EBAY).
ConAgra Foods Inc. (NYSE:CAG) is one of the largest packaged food companies in North America and a strong commercial foods business, serving restaurants and foodservice operations worldwide. Despite the fact that the shares of ConAgra Foods have increased by over 22% year-to-date, the stock might still have more room to run in the upcoming months and years as the company is anticipated to undertake some notable changes with the appointment of Bradley A. Alford and Timothy R. McLevish to the company’s Board of Directors. Rosenstein acquired a sizable stake in ConAgra last month and claimed that he would attempt to improve the company’s performance and make it a more attractive stock, and it seems that he has quickly been successful in pursuing that goal. The team of professionals at JANA Partners believes that the packaged food company has disappointingly failed to create shareholder value since the acquisition of private-label food maker Ralcorp Inc. in January of 2013. On March 26, ConAgra wrote down the acquisition’s value by $1.3 billion, which was a clear indicator that the strategic decision to acquire this company back in 2013 had been a failure. Yet again, JANA claims that this acquisition made by ConAgra resulted in disappointing performance for the company’s shareholders, constant guidance misses, negative revisions to its long-term earnings targets, lack of dividend per share growth, and other operating performance challenges.