JANA Partners LLC is an event-driven hedge fund co-founded in 2001 by its current Managing Partner and Co-Portfolio Manager, billionaire Barry Rosenstein. The New York-based hedge fund primarily focuses on the public stock markets in the United States by employing different strategies such as an activist strategy, market-neutral strategy, and risk arbitrage strategy, among others. The portfolio of the respected activist investor is valued at $17.23 billion as of the end of the first quarter, an increase of 50% in its value over the quarter. Given that we know the importance of small-cap picks in the portfolios of investors, let’s take a look at JANA’s major small-cap holdings and how they assisted that first quarter growth. Some of the top small-cap holdings of JANA Partners are Starz (NASDAQ:STRZA), Lions Gate Entertainment Corp. (NYSE:LGF), Pinnacle Foods Inc. (NYSE:PF) and SUPERVALU Inc. (NYSE:SVU).
Rosenstein’s small-cap picks are notable to us given the fact that it’s investors like him who add great value to our small-cap strategy system, as they are heavily invested in the success of their small-cap picks and have poured considerable resources into identifying undervalued or under-the-radar companies to invest in. We have found that collectively, hedge funds’ top small-cap picks provide a great investment opportunity, with our strategy having returned over 144% since it was launched at the end of August, 2012 (see the details).
JANA Partners reported the acquisition of a new 7.50 million share stake in Starz (NASDAQ:STRZA), which is worth $257.96 million as of March 31. Although Starz’s stock achieved a spike of over 38% this year, it has the potential to keep rising during the upcoming months as the company continues to consistently beat earnings estimates. Looking at the most recent financial report, Starz (NASDAQ:STRZA) generated earnings per share of $0.79, easily beating the analysts’ estimates of $0.62 per share. The most recent estimates have been upgraded further, yet it is expected that the company will still outperform expectations. One of the major equity holders of the American premium cable and satellite television network company among the hedge funds we track is Naya Capital, founded by Masroor Siddiqui and Bruce Emery.
The latest 13F filing shows that JANA Partners has also opened a new long position in Lions Gate Entertainment Corp. (NYSE:LGF). Rosenstein now holds an equity stake of 5.99 million shares valued at $203.32 million. The Vancouver-based entertainment company has recently reported poor financial results, failing to meet analysts’ estimates. During the recent quarter, the company generated adjusted earnings per share of $1.39 compared to the Zacks Consensus Estimate of $1.41. Nevertheless, the relatively poor financial performance did not stop Lions Gate from achieving an increase of 9% in its share price throughout the past two weeks. Mark Rachesky’s MHR Fund Management is one of the largest equity holders of Lions Gate Entertainment Corp. (NYSE:LGF), owning 40.27 million shares as of April 30, the position having been trimmed by nearly 11 million shares in April.