market folly

Catching up on some important news while we were busy with conferences: Barry Rosenstein's activist hedge fund JANA Partners has recently filed a 13D on Safeway (SWY) as well as an amended 13D on Ashland (ASH).


JANA's Activist Investment in Safeway (SWY)

They've filed a new 13D on grocery store chain Safeway (SWY).  They previously owned a tiny position but have recently ramped up their stake and now own 6.2% of the company with 14,950,000 shares.

This marks a 1,114% increase in their position size since the end of the second quarter.  The filing was required due to portfolio activity on September 13th.

The activist filing indicates that JANA has already had discussions with management and specifically mentions their desire to review the markets where the company operates and to exit "subscale and lower margin geographies."  JANA also is looking to return more capital to shareholders and to potentially transfer the company's Blackhawk Network stake to shareholders.

The hedge fund was actively buying shares in July and then ramped up purchases in August, buying around $25 and $26 and as high as $28 in September.

Per Google Finance, Safeway is "a food and drug retailer in North America.  The Company’s United States retail operations are located principally in California, Hawaii, Oregon, Washington, Alaska, Colorado, Arizona, Texas, the Chicago metropolitan area and the Mid-Atlantic region. Safeway’s Canadian retail operations are located principally in British Columbia, Alberta and Manitoba/Saskatchewan. In support of its retail operations, the Company has a network of distribution, manufacturing and food-processing facilities. Safeway owns and operates GroceryWorks.com Operating Company, LLC (GroceryWorks), an online grocery channel doing business under the names Safeway.com and Vons.com (collectively Safeway.com). Safeway also has a 49% interest in Casa Ley, S.A. de C.V. (Casa Ley), which operates 195 food and general merchandise stores in Western Mexico."


JANA Increases Ashland (ASH) Stake

According to an amended 13D filed with the SEC, the hedge fund also has increased its position in Ashland (ASH).  Per the filing, JANA now owns 8.4% of the company with 6,503,180 shares.

This marks a 13% increase in their position size since the end of the second quarter.  The filing was required due to portfolio activity on September 18th.  The bulk of their buying looks to have been done in late August and early September at prices ranging from around $87 to $92.

Just recently, we highlighted that the winner of the Value Investing Challenge was a pitch on Ashland, so you can check out the potential thesis there.

We highlighted JANA's original purchase of ASH shares back in February/April.

Per Google Finance, Ashland is "a global specialty chemical company that provides products, services and solutions throughout a variety of industries. Ashland’s business operates in four segments: Ashland Specialty Ingredients; Ashland Water Technologies; Ashland Performance Materials and Ashland Consumer Markets."


For more on this hedge fund, head to an in-depth interview with JANA Partners here.