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Jana Partners is an event driven hedge fund founded by Barry Rosenstein in 2001. Rosenstein once ranked No. 380 on the Richest Americans list in 2007, according to Forbes. But his fund has not performed well in 2007 and 2008. It returned 7.9% and -23.4%, respectively, in these two years. After that, the fund returned 23.9% in 2009 and 8.4% in 2010, recovering the 2008 losses in December 2010.

Rosenstein recently attended Chicago’s Investable Ideas Conference, Invest For Kids. At the conference, he recommended longing McGraw-Hill (MHP) as he saw 40% upside to the current price of the stock. He had more than $400 million in MHP at the end of September. Rosenstein also had more than $300 million in El Paso (EP). This bet paid off handsomely as El Paso gained 43% due to a takeover offer from Kinder Morgan (KMI). Rosenstein’s other top 5 holdings were Coca-Cola Enterprises (CCE), Apple (AAPL), and Google (GOOG).

During the third quarter Rosenstein sold out several of his positions to raise cash for his MHP bets. Clearly he doesn’t think these stocks have 40% upside. Here are the positions sold out by Rosenstein over the third quarter:

Company Name

Ticker

Value

CHARLES RIVER LABS INTL INC

CRL

167035

FOREST OIL CORP

FST

88097

CABLEVISION SYSTEMS CORP

CVC

60594

HERTZ GLOBAL HOLDINGS INC

HTZ

38943

LYONDELLBASELL INDUSTRIES N V

LYB

37081

SEALED AIR CORP NEW

SEE

30558

SAVIENT PHARMACEUTICALS INC

SVNT

28804

SPDR GOLD TRUST

GLD

22435

STRAYER EDUCATION INC

STRA

2755

ARCADIA RESOURCES INC

KAD

1897

The largest position sold out by Jana Partners during the third quarter was Charles River Laboratories International Inc (CRL). The fund had had $167 million invested in this stock at the end of June. But in the latest 13F report, Jana did not disclose owning any shares of CRL at the end of September. CRL returned 0.87% so far since the end of the third quarter, versus 11.59% for SPY. George Soros and Jim Simons also sold out their stakes in CRL during the third quarter.

Another big position sold out by Jana in the third quarter was Cablevision Systems Corp (CVC). The 4.1B market cap stock lost 4.56% so far in the fourth quarter. Rosenstein successfully avoided suffering losses in this position as he sold out all $61 million worth of CVC over the third quarter. George Soros and Dan Loeb both sold out their stakes in CVC during the third quarter.

Jana Partners is also no longer bullish about SPDR Gold Trust (GLD). The popular ETF has a market cap of $71.90B and Jana used to invest $22.4 million in this stock at the end of June. GLD returned 6.4% since the end of September, underperforming the market by more than 5 percentage points.

Other big positions sold out by Jana Partners include Forest Oil Corp (FST), Hertz Global Holdings Inc (HTZ), Lyondellbasell Industries Nv (LYB), Sealed Air Corp (SEE), and Savient Pharmaceuticals Inc (SVNT). Though his track record after 2007 is not very stunning and he suffered big losses during the 2008 financial crisis, he has already recovered from the loss by generating better than market returns in recent years. Rosenstein is a skilled hedge fund manager, and we urge investors to be cautious with the stocks sold by him.

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

Source: 8 Big Sells By Hedge Funder Barry Rosenstein