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Billionaire Rosenstein Ditches Expedia (EXPE) for Rival Priceline (PCLN), Adds Twitter (TWTR), Unloads Microsoft (MSFT)

Activist investor Barry Rosenstein’s Jana Partners is a hedge fund with long and short exposure to the equity markets. The investment firm follows event-driven investment strategy. It was formed in 2001 and uses fundamental analysis for picking undervalued stocks. In a few cases, the firm has taken activist stance as well. Rosenstein sold 20% of the fund to Neuberger Berman in 2015, valuing the fund at $2 billion. Jana Partners’ performance after the sale isn’t very encouraging. The fund lost 5.4% in 2015 and was down 4.1% during the first 7 months of this year. Fortunately, the fund managed to claw back from this hole and went into black in November as it returned 2.2% on the heels of Trump’s election victory. Jana Partners is up 1.4% for the year.

Consumer Staples stocks form the biggest chunk of its holdings. Information Technology stocks also account for nearly one-fifth of its portfolio. During the September quarter, the fund initiated positions in Priceline Group Inc (NASDAQ:PCLN) and Twitter Inc (NYSE:TWTR) while liquidating its positions in Expedia Inc (NASDAQ:EXPE), Microsoft Corporation (NASDAQ:MSFT) and Walgreens Boots Alliance Inc (NASDAQ:WBA).

The smart money sentiment is an important metric that can be used to assess the long-term profitability of a stock. While there are thousands of stocks trading daily on the market, taking a look at what hedge funds think about certain companies can narrow down the search significantly. At Insider Monkey, we track more than 700 hedge funds, whose 13F filings we analyze as part of our small-cap strategy. Our research has shown that imitating a portfolio that includes the 15 most popular small-cap stocks among hedge funds can outperform the market by as much as 95 basis points per month on average (see more details here).

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Priceline Group Inc (NASDAQ:PCLN) stock gained 17% this year so far. The stock accounted for 2.72% of Jana’s portfolio. For the quarter ended on 30th September, 2016, the investment fund initiated its position in the stock by buying 105,409 shares. The fund’s holding amounted to $155 million. Of the hedge funds in our database, 98 funds currently hold $8.2 billion worth of Priceline Group shares in their portfolio at the end of the September quarter, which equals to 11.30% of the outstanding shares. Priceline reported strong results for its third quarter. The company’s earnings for the quarter stood at $30.94 per share, surpassing consensus estimate of $28.40 per share. Its revenue was reported at $3.6 billion, matching forecast of $3.617 billion.

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Twitter Inc (NYSE:TWTR) stock declined 21% in this year so far. However, Jana Partners initiated its holding of the stock during the quarter ended on 30th September, 2016. The fund held $67 million worth of Twitter stock at the end of the quarter, forming 1.19% of its portfolio. Jana Partners had 2.94 million shares of the company in its portfolio at the end of the period. Among the funds we track, 47 funds held $1 billion worth of Twitter’s stock in aggregate at the end of September, having amassed 6.6% of its outstanding stock betting on the possibility that the tech company will be sold at a premium. The beleaguered company recently announced the closure of its popular video app Vine. The company is reportedly looking to sell the app. It is likely that the Twitter may receive less than what it paid for Vine nearly four years back. India is included in the top 10 biggest markets for Twitter. To know more about social networking sites in India, read our article here.

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