Barry Rosenstein’s New York-based hedge fund firm Jana Partners closed out its position in gold in February, according to its second quarter letter to clients. It also moved away from what it calls slow growth, high dividend-paying stocks, like utilities and consumer staples, to invest in more special situations. These include activist investments like Oil States International, which we highlighted when he initiated his postion, and Ashland, which he highlighted at the Ira Sohn conference. Jana noted in the letter that it took an initial position in Groupon in the first quarter and “added to the position materially” in the second quarter as its conviction grew. Rosenstein said he was originally interested in the e-commerce company late last year when the stock sold off. However, Jana determined that its first mover advantage “is a defensible moat.” It also established a position in Japan Airlines, calling it a “rare value and catalyst opportunity.”
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Shares of CF Industries, North America’s largest nitrogen fertilizer manufacturer, surged nearly 12 percent Monday after Daniel Loeb’s Third Point disclosed it has a stake in the company. “We believe its structural cash flow generation strength is misunderstood and that management should deliver a much larger dividend to its shareholders,” Loeb told clients in his second quarter report. “Such a dividend would highlight the sustainability of its cash flow generation and lead to a substantial re-rating.” Before the stock climbed, Loeb figured CF was trading at an 11 percent free cash flow yield.
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Herbalife Monday evening reported an 18 percent increase in sales in the second quarter, while earnings climbed 23 percent, coming in above expectations. The nutrition supplements company also raised 2013 earnings guidance. The stock rose nearly 5 percent, to around $63.60, in after-hours trading after rising 3.87 percent in the regular trading session.
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Jeffrey Smith’s New York-based hedge fund Starboard Value L.P. has sold 1.27 million shares of Extreme Networks, lowering its stake in the technology company to 7.1 percent. Shares of the $375 million-market cap provider of network infrastructure equipment and services are up 33 percent in the past three months.
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A BlueMountain Capital Management manager is leaving the hedge fund firm to devote all his time to Scriggler.com, a new writing website he co-founded. Dmitry Selemir, who managed structured-credit investments at the New York-based hedge fund firm, told Bloomberg that his new website, which went live earlier this month, seeks to encourage “a cross-border discussion and exchange of views and opinions and ideas, and that’s quite big.” Selemir joined BlueMountain in 2007 and worked out of its London office.
