market folly

In a 13D filing made with the SEC recently, Barry Rosenstein's hedge fund Jana Partners disclosed a 10.5% ownership stake in PRG-Schultz (PRGX) due to activity on July 13th, 2009. They now own 2,311.669 shares. This is not a new position for them, as they owned the same amount of shares back on March 31st, 2009 as disclosed in their most recent 13F filing. Instead of filing ot denote a change in their share total, they are filing to reserve their right to go activist. Quoted from the SEC filing, "The Reporting Person initially acquired the Shares for investment in the ordinary course of business because it believed the Shares were undervalued and represented an attractive investment opportunity. However, in light of the continued underperformance of the Shares, the Reporting Person recently conducted a review of the Issuer's performance and strategic position, and has determined that the Issuer should puruse all avenues to increasing shareholder value including a review of strategic alternatives. The Reporting Person is filing this Schedule 13D to reserve its right to take steps to bring about changes to increase shareholder value, which may include changes in the board composition, strategy and future plans of the Issuer...". As such, Jana has reserved their right to go activist as is typically the case with a 13D filing. Again, this is not a new position and they still have the same amount of shares as reported from their 13F filing.

Additionally, Jana has also filed an amended 13G on their position in Immucor (BLUD). As per the filing, they own a 5.4% ownership stake in BLUD with 3,787,668 shares. This is down slightly from when they first filed a 13G on Immucor back in June. Back then, they had 3,865,413 shares and so they have already sold some shares off in the month or so that has already elapsed as the filing was made due to activity on July 9th, 2009.

We've also noted some of Barry Rosenstein's other recent activity as his fund has made numerous filings. Most recently, they have been selling shares of Coleman Cable (CCIX), as well as selling shares of Convergys (CVG). All of the portfolio shifting comes after a rough year in 2008 for Jana where they supposedly saw redemption requests for almost 30% of the fund's capital. In an attempt to meet such requests, they had to set aside illiquid positions and really shuffle things around. Jana was founded in 2001 by Barry Rosenstein and typically employs activist, market neutral, and long/short equity strategies in public equity markets. Rosenstein received his BS from Lehigh University and his MBA from the Wharton School of Business at the University of Pennsylvania. Jana has returned 20.9% each year annualized from 2001 til 2007. Rosenstein sees Jana's future in a strategy that uses management adjustments to force change at companies, which in turn can send shares higher. And, hopefully that strategy changes things for the better, as 2008 was a rough year for them. As their recent 13D filing suggests, it looks like they're going to be going activist more often these days.


Taken from Google Finance,

PRG-Schultz is "a worldwide provider of recovery audit services principally to large businesses and government agencies having numerous payment transactions. These businesses and agencies include, retailers such as discount, department, specialty, grocery and drug stores, and wholesalers who sell to these retailers."

Immucor "develops, manufactures and sells a complete line of reagents and automated systems used primarily by hospitals, clinical laboratories and blood banks in a number of tests performed to detect and identify certain properties of the cell and serum components of human blood prior to blood transfusion."