This article is part of a series that provides an ongoing analysis of the changes made to ValueAct's 13F stock portfolio on a quarterly basis. It is based on their regulatory 13F Form filed on 5/16/2022. Please visit our Tracking ValueAct Portfolio article for an idea on their investment philosophy and our previous update for the fund's moves during Q4 2021.
This quarter, ValueAct's 13F portfolio value decreased ~18% from $8.87B to $7.27B. The number of holdings remained steady at 13. The top three positions are at ~53% while the top five are at ~76% of the 13F assets. The largest position is Fiserv which is at ~18% of the portfolio. To know more about ValueAct's activist style of value investing, check out Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations.
Note 1: Jeffrey Ubben retired from ValueAct last June to launch Inclusive Capital Partners (climate change and social inequity focus). Many of the stakes previously in the ValueAct portfolio are now managed by Inclusive Capital Partners.
Note 2: It was reported in April 2020 that ValueAct has built a 2.6M share (~2% of the business, ~$1.1B) stake in Nintendo (OTCPK:NTDOY). The stock was around ~$50 at that time and currently goes for $56.46.
TopBuild Corp (BLD): BLD is a small 0.53% of the portfolio position established this quarter at prices between ~$181 and ~$276 and the stock currently trades at ~$193.
Seagate Technology (STX): STX is currently the third-largest position at ~17% of the portfolio. It saw a huge ~220% increase in Q3 2016 at prices between $23 and $38.50. There was another ~45% increase in Q2 2017 at prices between $38.75 and $50.50. That was followed with a ~55% increase the following quarter at ~$33 per share. The five quarters thru Q2 2019 had seen a ~47% further increase at prices between $36 and $60. H1 2021 had seen a ~42% reduction at prices between ~$59 and ~$104. That was followed with a ~23% selling over the last two quarters at prices between ~$79 and ~$116. The stock is now at ~$83.
Bausch Health (BHC) previously Valeant Pharmaceuticals: The BHC position is now at 4.54% of the 13F portfolio. It is a very long-term stake. Q1 2017 saw a ~20% increase at ~$10.85 per share. Last two quarters have seen a ~20% selling at prices between ~$22 and ~$29. The stock is now at $9.58.
Note: ValueAct first purchased Valeant in 2006. Their team was involved in the transformation of Valeant from an early-stage pharmaceuticals business to the behemoth it is today. They currently control ~4% of the business.
SLM Corp. (SLM): SLM was a very small 0.83% of the portfolio stake established in Q1 2018. Next quarter saw the stake increased by ~410% at prices between $11 and $12. There was a ~18% selling in Q1 2020 at prices between $6.45 and $12.30. That was followed with a ~47% selling over the last four quarters at prices between ~$17 and ~$21. The stock is currently at $18.38, and the stake is at 3.51% of the portfolio.
Note: ValueAct controls ~4.6% of the business.
Trinity Industries (TRN): The TRN stake was roughly doubled at ~$13.75 per share in Q3 2016 and that was followed with another ~25% increase the following quarter at ~$12.25 per share. Recent activity follows. The two quarters through Q3 2021 had seen a ~45% reduction at prices between ~$25.50 and ~$30. That was followed with a ~75% selling last quarter at around the same price range. The position was reduced to a minutely small stake this quarter at ~$28.45 per share. The stock is now at $23.87.
Note: The prices quoted above are adjusted for the Arcosa Inc. (ACA) spinoff that closed in November 2018.
KKR & Co. (KKR): KKR is currently the second-largest 13F position at ~18% of the portfolio. It was established in Q2 2017 and increased by a whopping ~800% the following quarter at prices between $18 and $20.50. Q4 2020 saw a ~15% selling at ~$37.50 per share. The three quarters through Q3 2021 had seen another ~37% selling at prices between ~$38 and ~$68. The stock currently trades at $50.60. Last two quarters have seen only minor adjustments.
Insight Enterprises (NSIT): NSIT is a 5.23% of the portfolio stake established in Q1 2021 at ~$95 per share cost-basis. Next quarter saw a ~160% stake increase at prices between ~$94 and ~$107. That was followed with a ~17% stake increase in Q3 2021. The stock currently trades near the low end of their purchase price ranges at ~$95.
Note: Regulatory filings since the quarter ended show them owning 3.86M shares (~11% of the business) of Insight Enterprises. This is compared to 3.54M shares in the 13F report. The increase happened at ~$99 per share.
Fiserv Inc. (FISV): FISV is currently the largest position at ~18% of the portfolio. It was established over the last five quarters at prices between ~$95 and ~$126. The stock currently trades near the low end of that range at ~$97.
CBRE Group (CBRE): CBRE is a large 11.62% of the 13F portfolio stake. The majority of the original position was established in 2011 & 2012 in the mid-to-high-teens price-range. Q4 2017 and Q1 2018 saw a ~31% selling at ~$44 per share and that was followed with a one-third selling in Q1 2019 at $49.51. Q3 2019 also saw a ~23% selling at $53.86. The stock is currently at $79.28. There was a ~10% trimming in Q3 2021 at ~$96 per share.
LKQ Corporation (LKQ): LKQ is a large (top five) ~11% of the portfolio stake purchased at around $27 per share in early September 2019. Q4 2019 saw a ~3% stake increase and that was followed with a ~30% stake increase next quarter at prices between ~$14 and ~$36. Last quarter saw a ~20% reduction at $57.28 in a repurchase agreement with the issuer. The stock currently trades at $49.60.
Note 1: Regulatory filings since the quarter ended show them owning 12.55M shares (4.4% of business) of LKQ Corporation. This is compared to 17.55M shares in the 13F report. The 5M share reduction happened at ~$50.35 per share.
Note 2: In August 2020, ValueAct's Jacob H. Welch was elected to LKQ Corporation's board.
Citigroup (C): The large 10.17% Citigroup position established in Q4 2017 saw a ~500% stake increase in Q1 2018 at prices between $67 and $80. H2 2018 had also seen another ~25% increase at prices between $49 and $75. There was a ~20% selling in Q1 2021 at prices between ~$58 and ~$75. That was followed with a one-third reduction in Q3 2021 at prices between ~$65 and ~$74. The stock currently trades at $52.70.
Altus Power (AMPS): AMPS is a very small 0.41% of the portfolio position established this quarter at prices between ~$6.40 and ~$11 and the stock currently trades at $7.26.
Note: ValueAct also has a small stake in the warrants which has a strike price of $11.
The spreadsheet below highlights changes to ValueAct's 13F stock holdings in Q1 2022:
This article was written by
Disclosure: I/we have a beneficial long position in the shares of BHC, C either through stock ownership, options, or other derivatives. 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.