Jana Partners Adds to Stake in HD Supply Holdings

Investment manager becomes gurus' leading shareholder with acquisition

Oct 28, 2016

Jana Partners (Trades, Portfolio) increased its stake in HD Supply Holdings Inc. (HDS, Financial), the indirect parent of Atlanta-based HD Supply, a North American industrial distributor, by more than 374% with the purchase of 11,193,730 shares on Oct. 17.

Jana Partners (Trades, Portfolio) paid $31.98 per share in a deal that had a 5.77% impact on the guru’s portfolio.

The guru now owns 14,186,200 shares in the company, making Jana Partners (Trades, Portfolio) the gurus’ leading shareholder in HD Supply Holdings. The stake is 7.06% of HD Supply Holdings’ outstanding shares and 7.31% of Jana Partners (Trades, Portfolio)’ total assets.

Jana Partners (Trades, Portfolio) owned a stake in HD Supply Holdings between the first quarter of 2014 and the third quarter of 2015. At one point, the stake was 15.7 million shares.

The guru sold out its stake in HD Supply Holdings in 2015 but began accumulating more shares in the first quarter of this year.

Other gurus who own shares in HD Supply Holdings are John Griffin (Trades, Portfolio), David Tepper (Trades, Portfolio), Steven Cohen (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), Jim Simons (Trades, Portfolio), Ken Heebner (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio).

HD Supply Holdings has a price-earnings (P/E) ratio of 5.39, a forward P/E ratio of 10.83, a price-book (P/B) ratio of 7.73 and a price-sales (P/S) ratio of 0.88. GuruFocus gives HD Supply Holdings a Financial Strength rating of 4/10 and a Profitability and Growth rating of 5/10 with return on equity (ROE) of 334.17% that is higher than 100% of the companies in the Global Industrial Distribution industry and return on assets (ROA) of 19.79% that is higher than 99% of the companies in that industry.

HD Supply Holdings sold for $32.76 per share at market close Friday. The DCF Calculator gives HD Supply Holdings a fair value of $57.47 with a 43% margin of safety.

Disclosure: I do not own shares in HD Supply Holdings.

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