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Walgreen Company (WAG): Barry Rosenstein, JANA Partners Increase Exposure to Their Top Holding

As a new filing with the US Securities and Exchange Commission showed, Barry Rosenstein, the manager of JANA Partners has acquired more shares of Walgreen Company (NYSE:WAG) raising his stake to 13.75 million shares. Mr. Rosenstein disclosed purchasing 1.25 million shares of Walgreen at an average price of $61.86 per share. Following the increase the investor holds around 1.43% of Walgreen Company.

Barry Rosenstein JANA PARTNERS

Mr. Rosenstein serves as a member of the board of directors of Walgreen Company (NYSE:WAG). He was appointed at the beginning of September, after JANA Partners and Walgreen entered into a Nomination and Support agreement. Mr. Rosenstein also serves on the Finance Committee of the board and was also appointed to a new strategy committee. Aside from Walgreen, the manager of JANA Partners also serves on the board of Convergys Corp (NYSE:CVG) since 2011 and on the board of Copart, Inc. (NASDAQ:CPRT). Moreover, being a big activist investor, Mr. Rosenstein sent a letter to the board of PetSmart, Inc. (NASDAQ:PETM) at the end of June asking them to reconsider the decision to conduct a recapitalization of the company.

Overall, Mr. Rosenstein’s activist hedge fund has had a good performance over the last years, returning over 20% for the last year, which was in line with other major activist hedge funds. Although, JANA Partners still underperformed in comparison with the S&P 500 Index, which gained more than 30% during 2013.

Walgreen Company (NYSE:WAG)’s stock inched up around 4% year-to-date, although the stock surged by more than 35% since the second quarter of 2013, when JANA Partners first disclosed holding a long position in the company. The investor kept his bullish sentiment on the stock, raising his exposure from around 1.31 million shares disclosed initially. Currently Walgreen Company (NYSE:WAG) represents the largest long position in JANA’s equity portfolio. Another investor that is betting big on the retail drug stores operators is Andreas Halvorsen’s Viking Global, which holds around 20.14 million shares as of the end of June, the stake amassing 6.5% of the fund’s equity portfolio, versus more than 5% in JANA’s equity portfolio.

Mr. Rosenstein increased his stake in Walgreen Company (NYSE:WAG) soon after the company declared a quarterly dividend of around $0.34 per share, which represents a 7.1% increase on the year. Moreover, at the beginning of the month, the company reported a 9.4% annual increase in its September sales, which grew to $6.48 billion.

Mr. Rosenstein’s acquisition of Walgreen Company (NYSE:WAG) shares is an interesting moves since he is not only a director, but JANA Partners is also a notorious activist fund with great returns. And since research showed that following insider trading and the moves of the greatest hedge funds can help retail investors outperform the market by a significant margin, Walgreen is worth keeping track of. Moreover, JANA Partners’ other two large long holdings, Equinix Inc (NASDAQ:EQIX) and Ashland Inc (NYSE:ASH) have also gained ground during the last year. However, Mr. Rosenstein is betting big on the market going south, since during the second quarter he boosted his ‘Put’ options in the SPDR S&P 500 ETF by over 2,000%, the position currently amassing over 14% of the equity portfolio.

Disclosure: none

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