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Barry Rosenstein is the founder of Jana Partners, an event-driven hedge fund started in 2001. According to Forbes, Rosenstein was the 380th richest American in 2007. But Jana was not so spectacular in 2007 and 2008. The fund returned 7.9% in 2007 and lost 23.4% in 2008. After that, Jana gained 23.9% and 8.4% respectively in 2009 and 2010, recovering the losses of 2008. Jana did quite well recently. The top 10 positions of its 13F portfolio returned 23% since the end of September last year, while the S&P 500 index was up about 16%. The calculation assumes that Rosenstein did not increase or reduce these 10 positions since the end of the third quarter.

Company Name

Ticker

Value (*1000)

Return since Sep

MCGRAW HILL COS INC

(MHP)

419086

12.93%

EL PASO CORP

(EP)

302908

54.44%

COCA COLA ENTERPRISES

(NYSE:CCE)

104009

5.05%

APPLE INC

(NASDAQ:AAPL)

89789

12.53%

GOOGLE INC

(NASDAQ:GOOG)

88022

22.89%

HCA HOLDINGS INC

(NYSE:HCA)

83526

20.34%

LIBERTY MEDIA CORP

(NASDAQ:LINTA)

80032

16.87%

ANADARKO PETE.

(NYSE:APC)

54648

27.41%

EXPEDIA INC

(NASDAQ:EXPE)

50471

-18.22%

LIBERTY GLOBAL INC

(NASDAQ:LBTYA)

49398

21.39%

The biggest position of Rosenstein's portfolio at the end of September was McGraw Hill Cos Inc. Rosenstein increased his stakes by 33% over the third quarter. At the end of September, Jana reported to own $419 million of McGraw Hill shares. The stock returned 12.93% so far since the end of the third quarter, lower than the 16.3% for SPY in the same period. But Rosenstein saw great potential in McGraw Hill. At Invest For Kids, an investable ideas conference at Chicago, Rosenstein recommended buying McGraw Hill and he said he saw 40% upside to the current price of the stock. Leon Cooperman is also bullish about McGraw Hill. During the third quarter, Cooperman's Omega Advisors initiated a brand new $92 million position in McGraw Hill.

El Paso Corp is the best performing position. It returned a stunning 54.44% since the end of the third quarter, beating the market by 38 percentage points. El Paso is an energy company mainly engaged in the transmission, exploration and production of natural gas. As of September 30, 2011, Jana Partners had $300+ million invested in EP. Carl Icahn likes this stock as well. Icahn Capital LP initiated a brand new $1.2 billion EP position during the third quarter.

Two mega-cap technology stocks that Rosenstein likes are Apple Inc and Google Inc . At the end of the third quarter, Jana Partners invested nearly $90 million each in these two positions. Since then, Apple returned 12.53% and Google was up 22.89%, versus 16.30% for SPY. Though Apple underperformed the market since the end of September, its strong fundamentals make it an attractive stock. At the end of the third quarter, there are 125 hedge funds with Apple positions, including Stephen Mandel's Lone Pine Capital, Rob Citrone's Discovery Capital Management, and Chase Coleman's Tiger Global Management LLC.

HCA Holdings Inc, Liberty Media Corp, Anadarko Petroleum Corp, and Liberty Global Inc also outperformed the market since the end of the third quarter last year. We like Rosenstein. Though his performance after 2007 is no longer astonishing, he has already recovered from the losses in 2008 by outperforming the market in recent years. We believe that by focusing on the top stock picks of Rosenstein, investors will be more likely to beat the market in the long term.

Source: Barry Rosenstein's Top 10 Stock Picks Returned 23% Since September