Jana Partners (Trades, Portfolio) disclosed Thursday that unloaded nearly a third of its stake in HD Supply Holdings Inc. (HDS, Financial), an activist investment the firm started in 2016.
Jana reduced the position by 26.82%, selling 633,657 shares on July 1 at an average price of $40.89 and 100,000 shares on July 2 at average prices of $39.90. Shares of HD Supply Holdings Inc. closed Thursday down 0.18% to $39.88. Over the past year, HD Supply stock has declined 9.1%
The event-driven investment firm led by Barry Rosenstein started the position in the first quarter of 2016 when the price averaged $27. About two years later, in the second quarter of 2018, it took advantage of the company’s escalating stock price to reduce its position each quarter at a profit. Its largest sale came in the first quarter of 2019, when it cut 49.3% of its shares as the price averaged almost $40.
Industrial product distributor HD Supply spun off from Home Depot Inc. (HD, Financial) in 2007. In an activist filing from October 2016, when Jana Partners (Trades, Portfolio) increased its HD Supply stake to 8.1%, it called the company’s shares “undervalued” and “an attractive investment opportunity.” It also held talks with the company’s management team to find strategic alternatives and maximize shareholder value, targeting board compensation. One of Jana’s members joined Jana’s board in 2017.
For the first quarter, HD Supply reported a 7.5% year-over-year increase in net sales to $1.5 billion. Net income increased 20.2% to $18 billion, with net income per diluted share up 21.3% to 15 cents.
Jana Partners (Trades, Portfolio), a value-focused firm, has made other activist investments in companies such as ConAgra Brainds (CAG, Financial), Qualcomm (QCOM, Financial) and Callaway Golf Co. (ELY, Financial). As of first quarter-end, its largest positions in its portfolio of 30 stocks were Conagra Brands, Zimmer Biomet Holdings Inc. (ZBH, Financial) and HD Supply Holdings.
See Jana Partners (Trades, Portfolio)’ portfolio here.
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