A Hatful of Cheap Shares

Even though 13F filings are only made public a few weeks after the quarter in question, there are many ways to use this information -- that is, the long positions of hedge funds and other big investors. For instance, these data can help folks develop investment strategies, given the solid outperformance of certain hedge fund picks. Investors can treat a hedge fund's top picks like a stock screen, potentially combining these lists with other metrics to yield nice investment ideas. With that in mind, let's take a look at the five largest positions from Barry Rosenstein's Jana Partners at the end of the year, as seen in the 13F, that have price-to-earnings ratios no higher than 14x.

To start with, the fund has a 9.4-million-share position in agricultural name Agrium (AGU), which is valued at 11x trailing earnings. The company, with market capitalization of $15 billion, is the fund's largest position -- and Rosenstein has been taking an activist role in the company, arguing that it should split those two business units. However, management has been resisting these efforts. Agrium's P/E ratio says the market expects the business to remain more or less static, and it certainly has not priced in any improvement, whether from a breakup or other factors. In addition, the most recent revenue has shown little change from a year earlier....361 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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