Keywords: ubben valueact
Description: Jeffrey Ubben's 13F portfolio decreased from $18.99B to $17.20B this quarter. ValueAct Holdings decreased Adobe Systems while increasing Twenty First Century Fo
- Jeffrey Ubben's 13F portfolio decreased from $18.99B to $17.20B this quarter.
- ValueAct Holdings decreased Adobe Systems while increasing Twenty First Century Fox during the quarter.
- The top-three positions are Microsoft Corporation (19.37%), Valeant Pharmaceuticals (15.55%), and Halliburton (7.64%) and they add up to
This article is part of a series that provides an ongoing analysis of the changes made to Jeffrey Ubben's US stock portfolio on a quarterly basis. It is based on Ubben's regulatory 13F Form filed on 11/16/2015. Please visit our Tracking Jeffrey Ubben's ValueAct Portfolio article for an idea on his investment philosophy and our previous update for the fund's moves during Q2 2015.
This quarter, Ubben's US long portfolio decreased 9.44% from $18.99B to $17.20B. The number of holdings in the portfolio increased from 14 to 15: a small new stake in Towers Watson & Co. was established during the quarter. The top three holdings are at 42.56% while the top five holdings are at 57.05% of the US long assets. The largest holding is Microsoft Corporation which was first purchased in Q1 2013 and now accounts for 19.37% of the US long portfolio.
Towers Watson & Co. (NASDAQ:TW ): TW is a minutely small 0.23% of the portfolio stake established this quarter. In June, Willis Group Holdings (ValueAct has
10% ownership in Willis) offered to merge with Towers Watson. ValueAct is supportive but Institutional Shareholder Services has urged shareholders to vote against the deal. In response, Willis Group sweetened the offer by
4% last week. The terms call for TW shareholders to receive 2.649 shares of WSH for each share held along with a $10 one-time cash dividend. That values the company at
Adobe Systems (NASDAQ:ADBE ): ADBE is a long-term stake first purchased in 2011. Close to 25M shares were purchased at the time at a cost-basis of around $27 per share. The position was increased by 25% in 2012 as well at around $32. Since then the stake was kept steady. Q4 2013 saw an about-turn as
25% of the position was sold at prices between $51.57 and $60.89. Q4 2014 saw a further one-third reduction at prices between $60.88 and $76.02. This quarter saw another
11% reduction at prices between $74.27 and $86.77. The stock is currently at $91.81. Ubben is harvesting long-term gains from the position.
Halliburton Company (NYSE:HAL ): The 7.64% stake in HAL was first purchased in Q4 2014 at prices between $37.92 and $64.51. It was increased by
11% last quarter at prices between $42.69 and $49.21. The stock currently trades near the low end of their purchase price ranges at $38.01. This quarter saw a marginal reduction.
Note: In mid-November 2014, Halliburton agreed to buy Baker Hughes in a cash-and-stock deal ($19 cash and 1.12 shares of HAL for each share of BHI held). ValueAct has a huge stake in Baker Hughes as well.
American Express (NYSE:AXP ): AXP is a 4.87% of the US long portfolio stake established last quarter at prices between $77.16 and $81.36. The stock currently trades below that range at $72.41. There was a minor increase this quarter. For investors attempting to follow Ubben, AXP is a good option to consider for further research.
Twenty First Century Fox Class B (NASDAQ:FOX ): FOX is a large (top-five) 7.45% position. It was first purchased in Q2 2014 at prices between $31 and $35 and increased by a whopping 10x the following quarter at around the same price-range. Last quarter saw a further
6% increase. For investors attempting to follow ValueAct, FOX is a good option to consider for further research. ValueAct controls
Agrium Inc. (NYSE:AGU ): AGU is a medium-sized 5.21% of the US long portfolio stake established in Q3 2014 at prices between $88.32 and $94.86. In Q4 2014, the position was increased by
26% increase at prices between $102 and $110. The stock currently trades at $95.10. ValueAct controls
Allison Transmission Holding (NYSE:ALSN ): The original 18M share stake in ALSN is from Q2 & Q3 2013 at an average-cost-basis of around $23. It had since been kept steady. Q4 2014 saw a minor
3% of the portfolio. The stock currently trades at $27.70. ValueAct's ownership in the business is at 10.77%.
Armstrong World Industries (NYSE:AWI ): AWI is a huge 9.2M share stake (16.8% of the business). It was established in Q2 2014 and increased by
3x in Q3 2014 at around the low-50s price-range. The stock currently trades at $49.87. As a percentage of the portfolio, the position is small at 2.55%. For investors attempting to follow Ubben, AWI is a good option to consider for further research.
Note: In December 2014, ValueAct added a member to the board and in February it was announced that AWI will split into two publicly traded units: one focused on the flooring business and the other in ceiling.
Baker Hughes Inc. (NYSE:BHI ): The 7.03% of the US long portfolio BHI position was established in Q4 2014 at prices between $50 and $66. It was increased by 55% the following quarter at prices between $53.53 and $65.04. The stock currently trades at $51.01. ValueAct controls
CBRE Group (NYSE:CBG ): CBG is a medium-sized 5.83% of the US long portfolio stake. The vast majority of the
31M share position (9.4% of the business) was established in 2011 & 2012 in the mid-to-high-teens price-range. The stock currently trades at $36.86. Last quarter saw a marginal increase. Ubben is sitting on huge long-terms gains on this position.
Microsoft Corporation (NASDAQ:MSFT ): MSFT is Ubben's largest position at 19.37% of the US long portfolio. The vast majority of the stake was built in Q1 & Q2 2013 at prices between $26.83 and $35.67. The position was since increased by
Note: A Form 4 regulatory filing on 11/12/2015 shows ValueAct owning 56.6M shares. This is compared to 75M shares in the 13F. The stake reduction happened at
Motorola Solutions Inc. (NYSE:MSI ): A huge 12.26% MSI position as of Q3 2014 was reduced to a still fairly large 7.39% stake (
39% reduction) in Q4 2014 at $66.26 per share - Motorola Solutions bought back the stock from ValueAct as part of their buyback in November 2014. The original position was from Q2 2011 when around 24M shares were purchased at around $45. The stake was increased to 29M shares in 2012 and had since been relatively steady. ValueAct still controls 9.96% of the business. The stock is currently at $72.19 and the current stake is at 5.57% of the US long portfolio.
MSCI Inc. (NYSE:MSCI ): MSCI is a small 3.22% of the US long portfolio position. The majority of the 9.3M share position (8.3% of the business) was purchased in November 2012 at a cost-basis of around $26. The stock currently trades at $69.34.
Note 1: A Form 4 regulatory filing on 11/20/2015 shows ValueAct's ownership stake at 6.98M shares. This is compared to 9.3M shares in the 13F. The selling happened at a price of
Note 2: Jeffrey Ubben criticized the company's business strategy in a letter to the board and in January succeeded in reaching an agreement whereby three new members were appointed to the board.
Valeant Pharmaceuticals (NYSE:VRX ): VRX is ValueAct's second-largest position at 15.55% of the US long portfolio. ValueAct controls 4.4% of the business. It is a very long-term position that was first purchased in 2006. Last quarter saw a
23% reduction at prices between $197 and $242. Ubben is starting to harvest huge long-term gains. The stock is now at $90.85.
Note: ValueAct's team is partly credited with transforming VRX from an early-stage pharmaceuticals business to the large-cap behemoth it is today - they helped recruit Valeant's hugely successful current CEO Mike Pearson and was also involved in the myriad deals that followed over the years.
Willis Group Holdings (NYSE:WSH ): WSH is a very long-term holding first purchased in 2009 and substantially increased in 2010. Q4 2012 & Q1 2013 saw a stake doubling at prices between $33 and $40 and since then the position has stayed relatively steady. The stock currently trades at $45.70. ValueAct controls
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I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.