Whole Foods Market, Inc. (NASDAQ:WFM) shares surged almost 10% on Monday after Barry Rosenstein‘s Jana Partners disclosed an around 9% stake in a regulatory filing. As reason for its stake, Jana said in the filing that it believes ‘shares are undervalued and represent an attractive investment opportunity’. The activist fund intends to discuss with current management potential value unlocking changes including a potential sale and trying to execute a faster turnaround. Formerly a high flying growth/momentum stock, Whole Foods Market, Inc. (NASDAQ:WFM) shares have been range-bound for almost two years as sales growth has cooled off due to rising competition.
Whole Foods responded with the statement, ‘Whole Foods Market welcomes investment in the company and is open to the views and opinions of all of our shareholders. We value constructive dialogue toward our shared goals of creating shareholder value, successfully executing on our strategic priorities and taking actions that will position the company for continued success’.
Given Jana’s history in the retail/consumer staple space, some traders think that the hedge fund has a good shot at unlocking value and have bid shares up.
What Does The Smart Money Sentiment Say?
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).
34 elite funds owned shares of Whole Foods Market, Inc. (NASDAQ:WFM) at the end of December, up 6 funds from the previous quarter. Among the new stake holders were Steven Boyd‘s Armistice Capital and Bruce Kovner‘s Caxton Associates Lp which initiated stakes of 312,000 and 520,000 shares respectively in the fourth quarter.
The Bottom Line
Whole Foods Market, Inc. (NASDAQ:WFM) shares surged almost 10% on Monday due to activist Jana Partners disclosing an around 9% stake. For more reading, check out ‘15 Healthiest Countries In the World‘.