Barry Rosenstein on the Market, Active vs Passive, & More ~ market folly

Friday, October 21, 2016

Barry Rosenstein on the Market, Active vs Passive, & More

Barry Rosenstein of hedge fund JANA Partners was interviewed on CNBC yesterday and he said stockpicking isn't dead and the push to passive investing is just a 'bubble' of a trend. He noted: "Wall Street has a great ability to overdo a good thing."

On the market: "I think the market's fairly valued; I don't think it's cheap, I don't think it's expensive; there's pockets of value.  It's hard to get excited about corporate earnings growth right now."

On hedge funds: "I think the fact that we're no longer in a one directional market is going to remind people why they want to be in hedge funds again.  I believe this is the kind of market where a fund like ours can find interesting situations and take advantage of the volatility."

On activism, Rosenstein said "as long as human beings are running public companies and as long as the current board dynamic exists, there's always going to be a need for activism.  Sometimes boards lose sight of what needs to happen."  He thinks activism has a long and bright future. 

On ConAgra: He's trimmed his position in ConAgra a bit, but commended management on turning the business around and making a lot of changes (spinoffs, cost savings, etc) and Rosenstein thinks this one has "years to go" with a collection of attractive brands that can grow at double digit earnings growth and the potential for pruning its portfolio and making attractive acquisitions.

He doesn't think they need to increase their dividend as they're already buying back stock.

JANA also reduced its stake in Walgreen's (WBA) and he thinks it's a great company.  He was on the board for a while but stepped off.  He thinks they've accomplished a 'tremendous' amount.

For more from prominent investors, head to David Tepper's recent interview, as well as Keith Meister's thesis on YUM.

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