Top Sells of JANA Partners

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Includes: CMCSA, DTG, KMI, PFE, TEVA, VIA, VIAB, WMB
by: The Analyst Hub

Founded in 2001 by Barry S. Rosenstein and Gary E. Claar, JANA Partners LLC is a New York, NY-based hedge fund management firm founded. The firm manages the JANA family of hedge funds.

Investment Strategy: JANA Partners LLC invests in both small-cap companies and established high profile large-cap companies. JANA Partners typically invests in value stocks. The firm employs an event-driven strategy, activist strategies, market neutral strategy, long/short equity strategy and a risk arbitrage strategy while making investments.

I discussed the Top Buys of JANA Partners LLC in a previous article. In addition to buys, it is also interesting to have a look at top companies where JANA Partners LLC is booking profit and selling its holdings. The following is a list of its top stocks sells in the last quarter, as released in its most recent 13F filing.

Stock Symbol Shares Held - 03/31/2011 Shares Held - 06/30/2011
Williams Companies, Inc. WMB 4,959,289 0
EL Paso Corp. EP 30,441,443 24,226,531
Dollar Thrifty Automotive Group Inc. DTG 1,394,528 0
Pfizer Inc. PFE 4,439,782 0
Comcast Corporation CMCSK 3,126,059 0
Kinder Morgan, Inc. KMI 1,903,532 0
Viacom, Inc. VIA.B 1,176,748 200,788

One of the stocks in above list I don't agree with, and would actually like to go long on is Pfizer. Pfizer clearly stands out as the defensive play in the current uncertain environment. It offers an attractive mix of:

  1. Inexpensive valuation with current year PE of just 8x
  2. Multiple catalysts in the form of phase III data or FDA approval for many late-stage drugs in second half of 2011 including pivotal Eliquis (apixaban) and tofacitinib data.
  3. High FCF and dividend yield
  4. Limited earnings risk

The company also recently won a case against Teva Pharmaceuticals (TEVA) which would prevent Teva from receiving approval for a generic form of Viagra until Oct. 2019. Most of the sell-side analysts were assuming Viagra would lose exclusivity in 2012. The recent ruling can add 5-10 cents in incremental annual EPS for Pfizer till 2019.

For other stocks in the above list, here are some of the specifics about these companies, including a brief description of their businesses, growth expectations (top line and bottom line):

The Williams Companies, Inc. is an integrated natural gas company focused on exploration and production, midstream gathering and processing, and interstate natural gas transportation primarily in the Rocky Mountains, Gulf Coast, Pacific Northwest, Eastern Seaboard and the Marcellus Shale in Pennsylvania. Williams' EPS forecast for the current year is $1.52 and next year is $1.75. According to consensus estimates, its top line is expected to grow 7.00% in the current year and 5.90% next year.

El Paso Corporation is an energy company, which operates in the natural gas transmission and exploration and production sectors of the energy industry. It operates in two segments: Pipelines and Exploration and Production. El Paso's EPS forecast for the current year is $1.12 and next year is $1.31. According to consensus estimates, its top line is expected to grow 6.30% in the current year and 14.30% next year.

Dollar Thrifty Automotive Group, Inc. is engaged in the business of the daily rental of vehicles to business and leisure customers through company owned stores. The Company also sells vehicle rental franchises worldwide and provides sales and marketing, reservations, data processing systems, insurance and other services to franchisees. Dollar Thrifty's EPS forecast for the current year is $4.67 and next year is $4.74. According to consensus estimates, its top line is expected to grow 0.80% in the current year and 3.30% next year.

Comcast Corporation is a provider of video, high-speed Internet and phone services to residential and business customers in the United States. Comcast's EPS forecast for the current year is $1.60 and next year is $1.91. According to consensus estimates, its top line is expected to grow 48.20% in the current year and 7.60% next year.

Kinder Morgan, Inc. owns the general partner and approximately 11% of the limited partner interests of the Kinder Morgan Energy Partners, L.P. KMP's operations are conducted through its subsidiaries and are grouped into five business segments: Products Pipelines, Natural Gas Pipelines, CO2, Terminals and Kinder Morgan Canada. Kinder Morgan's EPS forecast for the current year is $1.02 and next year is $1.27. According to consensus estimates, its top line is expected to grow 3.80% in the current year and 10.20% next year.

Viacom Inc. is an entertainment content company. The Company engages audiences on television, motion picture, Internet and mobile platforms through many of the world's entertainment brands. It manages its operations through two reporting segments: Media Networks and Filmed Entertainment. Its Media Networks segment provides entertainment content for consumers in demographics attractive to advertisers, content distributors and retailers. Viacom's EPS forecast for the current year is $3.72 and next year is $4.25. According to consensus estimates, its top line is expected to grow 7.50% in the current year and 4.60% next year.

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

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