JANA Partners, Barry Rosenstein's $8 billion activist hedge fund firm, has a new target: energy industry equipment maker Cameron International Corp.
"Despite record backlog and revenues, Cameron consistently missed earnings expectations last year. After the third quarter earnings miss in October, we made CAM one of our largest commitments, and we are currently one of the largest shareholders," JANA said in a yearend letter sent to investors and obtained by CNBC.com.
Cameron, whose business is to provide fluid control products and services to oil and gas companies, saw its stock price jump slightly on the news Friday from about $58 a share to more than $60. The stock has since fallen back to around $58 as of midday Friday.
Jeff Altamari, Cameron's vice president for investor relations, declined to comment. Charles Penner, JANA's chief legal officer, also declined.
JANA said in the investor letter that the company's troubles can be fixed: "We believe Cameron's problems are self-inflicted, temporary and remediable."
JANA praised several recent moves at Cameron, including the recent repurchase of more than $750 million of stock and the newly announced sale of a business unit to GE.
But the hedge fund firm said there was still more to do.
"We believe there remains still more portfolio pruning to be done and that asset sales, balance sheet capacity and future free cash flow provide considerable powder for even more share repurchases," the letter said.
"As 2014 progresses we forecast a recovery in margins, and the reduced expectations for 2014 set up the possibility of management beating the consensus rather than consistently missing. We look out and see the potential for a more focused, stronger Cameron with normalized earnings power north of $5.00 per share."
JANA said the stock should ultimately trade at a "premium multiple" to oil field services peers.
(Read more: Activist hedge fund managers get board welcome)
The JANA Master fund, the firm's flagship, gained 20.4 percent net of fees in 2013. Fourth quarter winners include stakes in Energy Transfer Equity, Liberty Ventures and Endo Health Solutions, according to the letter. Relatively new positions for the firm include Equinix, Juniper Networks and Airbus Group.
—By CNBC's Lawrence Delevingne. Follow him on Twitter @ldelevingne.