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QUALCOMM, Inc. (QCOM), Walgreens Boots Alliance Inc (WBA), eBay Inc (EBAY): Billionaire Activist Rosenstein’s Favorite Stocks

Billionaire Barry Rosenstein’s JANA Partners has disclosed its equity holdings as of March 31 in a 13F filing with the SEC. There was a good deal of activity in Rosenstein’s portfolio during the quarter as he opened 29 new positions including a number of large holdings in various index funds consisting of put options underlying shares. The heavy buying activity helped bolster the value of his fund’s portfolio to $17.23 billion, a greater than 50% increase from the previous reporting period. In terms of his long positions there were also a number of prominent moves, including several new positions and the sell-off of Rosenstein’s entire stake in PetSmart, Inc. (NASDAQ:PETM), which he had begun selling early in the first quarter.

Barry Rosenstein JANA PARTNERS

Following activist funds like JANA Partners 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 JANA Partners 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. 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 32 months since our small-cap strategy was launched it has returned 139% and beaten the S&P 500 ETF (SPY) by over 80 percentage points (read more details).

Rosenstein’s new top long position is in QUALCOMM, Inc. (NASDAQ:QCOM), in which his fund now holds a position of 28.54 million shares with a value of $1.98 billion. While much of that position was purchased during the first quarter, the increased holding is not a new revelation as JANA Partners had announced its new activist campaign and increased holding in the chipmaker back in April. At that time JANA began laying out some of its objectives for the company, which included an increased share buyback program and the possible sale of its chipset and licensing businesses. While the market reacted tepidly to JANA’s campaign and some analysts remarked that it was not in the company’s best interests to worry about share buybacks at this time amid slowing growth, QUALCOMM, Inc. (NASDAQ:QCOM) appears to be listening to JANA, as it recently issued over $10 billion in debt to help fund share buybacks. QUALCOMM, Inc. (NASDAQ:QCOM) shares are down by 5% in 2015, and more than 11% over the past calendar year. Among other things, the semiconductor giant is facing an antitrust investigation in Europe, where it’s alleged that it offered incentives to customers in an effort to persuade them from switching to rival products. JANA holds the largest position in Qualcomm in our database, followed by Ken Fisher’s Fisher Asset Management.

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