6 Potential Activist Targets For Jana Partners

|
Includes: CRL, CVG, FST, LMCA, LPRI, SUN
by: Takeover Analyst

As Jana Partners has recently been pushing for a breakup at McGraw-Hill, I thought it might be helpful to include a list of other potential activist targets. The information comes from their 13F filing for the 2Q of 2011. Although the hedge fund is particularly focused on the energy sector, it is well diversified. Below is a list of notable positions:

Liberty Media Corporation (LSTZA)

Liberty Media Corp (Starz) is an entertainment company with a market capitalization of $3.6B. They offer some of their videos through Netflix. P/E: 17.3. Forward P/E: 12.03. P/CF: 8.7.

Jana owns 7.5% of the outstanding shares, and it is a new position for the hedge fund. The stock has been up 2.6% for the year. Shareholder activist Third Point also has 2.8% ownership.

Forest Oil Corporation (NYSE:FST)

Forest Oil Corporation is an oil and gas company that acquires, explores, and develops production sites. It has a market capitalization of $2.2B. P/E: 17.7. Forward P/E: 11.3. P/CF: 3.92.

This is also a new position for the hedge fund at 2.9%. The stock is down more than half for the year, making it particularly vulnerable to activism. EPS is expected to decrease by 30.1% to $1.16 from 2010 to 2011 and then increase 37.1% and 44% in the following years.

Lone Pine Resources (LPR)

Lone Pine Resources is an independent oil and gas company the explores and develops production sites. It has a market capitalization of $700M--one of the smaller companies Jana has a position in. P/E: 0.31. Forward P/E: 21.1. P/CF: 7.6.

Jana owns 1.1% of the outstanding shares. The stock is down 34.4%, making it particularly vulnerable to activism.

Charles River Labs (NYSE:CRL)

Charles River Labs is a global provider of healthcare solutions that accelerate drug discovery and development. It has a market capitalization of $1.6B. Forward P/E: 11.4. EV/EBITDA: 7.8.

Jana owns 8% of the stock, representing a decrease. The hedge fund earlier last year pushed shareholders to reject an acquisition.

Convergys Corp (NYSE:CVG)

Convergys Corporation offers information and customer management technology solutions, billing and support. It has a market capitalization of $1.2B. Forward P/E: 9.11. EV/EBITDA: 4.54. P/CF: 4.8.

Jana has kept its position flat at 6.8%. The stock is down by more than a quarter for the year. EPS is expected to decline by 1% to $0.99 for 2011 and increase by 7.1% and 5.7% for the following years.

Sunoco, Inc. (NYSE:SUN)

Sunoco is a petroleum refiner and markets fuels. It has a market capitalization of $4.5B. Forward P/E: 19.5. P/CF: 6.02.

Jana owns 1.5% of the company and it represents one of its largest positions in terms of market value. The hedge fund has increased its ownership. The stock is down 7.4% for the year. EPS is expected to fluctuate wildly over the next three years.

Other Comments:

Jana's largest decrease without exit is in El Paso (EP), where it led a successful activist campaign earlier in the year. Jana decreased its position by over $58M and still retains a large stake. The activist has a $54M new stake in Expedia (NASDAQ:EXPE), amounting for 0.7% of the company. Jana is also invested in technology, largely through Google (NASDAQ:GOOG) (new) and Apple (NASDAQ:AAPL) (increased).

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.