Top 5 Stock Picks of Barry Rosenstein’s JANA Partners

4. Encompass Health Corporation (NYSE:EHC)

JANA Partners’ Stake Value: $150,222,000

Percentage of JANA Partners’ 13F Portfolio: 12.01%

Number of Hedge Fund Holders: 44

Encompass Health Corporation (NYSE:EHC) manages a network of inpatient rehabilitation hospitals, home health agencies, and hospice agencies, offering facility-based and home-based post-acute services to patients in 36 American states and Puerto Rico. JANA Partners holds a $150.2 million stake in Encompass Health Corporation (NYSE:EHC) as of September 2021, which represents 12.01% of the hedge fund’s total investments. 

Mizuho analyst Ann Hynes lowered the price target on Encompass Health Corporation (NYSE:EHC) on November 3 to $80 from $94 and kept a Buy rating on the shares. The analyst reduced estimates to reflect the elevated staffing challenges that are likely to persist into 2022 and will impact expenses in all Encompass Health Corporation (NYSE:EHC) segments.

Encompass Health Corporation (NYSE:EHC) published its third quarter results on October 27, posting earnings per share of $1.03, missing estimates by $0.03. The revenue totaled $1.28 billion, missing estimated revenue by $29.01 million. 

44 hedge funds in the Q3 database maintained by Insider Monkey were bullish on Encompass Health Corporation (NYSE:EHC), holding total stakes worth approximately $708 million. One of the biggest Encompass Health Corporation (NYSE:EHC) stakeholders is Polar Capital, with 992,110 shares worth $74.4 million.

Here is what Madison Funds has to say about Encompass Health Corporation (NYSE:EHC) in its Q3 2021 investor letter:

“We also added to our investment in Encompass Health, a provider of inpatient rehabilitation and home health. We believe the company will soon separate into two entities; and that will unlock value for shareholders. This is one of our favorite management teams and we see significant opportunities for both companies. We also exited several underperforming investments in this sector as COVID continues to disrupt routine healthcare procedures.”