In this article, we will discuss the top 5 stocks to buy according to Jeff Ubben’s ValueAct Capital. If you want to read our detailed analysis of Ubben’s history, investment philosophy, and hedge fund performance, go directly to the Top 10 Stocks to Buy According to Jeff Ubben’s ValueAct Capital.
5. CBRE Group, Inc. (NYSE: CBRE)
ValueAct’s Stake Value: $877,242,000
Percentage of Jeff Ubben’s 13F Portfolio: 9.72%
Number of Hedge Fund Holders: 37
CBRE Group, Inc. (NYSE: CBRE) is a global provider of commercial real estate services and investments. It was incorporated in 1906 and stands fifth on the list of top 10 stocks to buy according to Jeff Ubben’s ValueAct Capital.
On July 29, CBRE Group, Inc. (NYSE: CBRE) announced earnings for the second quarter of 2021. It reported earnings per share of $1.36, surpassing the anticipation by $0.58. Revenue for the second quarter of 2021 was $6.46 billion, up 20.02% YoY. On June 14, Wolfe Research analyst Andrew Rosivach initiated coverage of CBRE Group with an “Outperform” rating and gave a price target of $112.
In the second quarter of 2021, ValueAct Capital owned 10.23 million shares in CBRE Group, Inc. (NYSE: CBRE), worth $877.24 million. This represented 9.72% of the investment portfolio of ValueAct Capital. The company is also getting the attention of the smart money, as 37 hedge funds tracked by Insider Monkey reported owning stakes in CBRE Group, Inc. (NYSE: CBRE) in the second quarter of 2021, up from 30 funds a quarter earlier.
Third Avenue Management, in its first-quarter 2021 investor letter, mentioned CBRE Group, Inc. (NYSE: CBRE). Here is what the fund said:
“CBRE Group, Inc. (the largest commercial real estate services firm globally with leading brokerage, facilities management, consulting, and asset management offerings) revealing that it had agreed to acquire a 35% stake in Industrious—one of the largest networks of coworking and private office spaces in North America. Alongside the investment, CBRE’s management team (headed by CEO Bob Sulentic) has created a unique structure whereby it will also contribute its existing shared workspace portfolio (i.e., Hana) thus positioning the combined platform to take significant market share in the rapidly expanding “flexible workplace” market given CBRE’s reach (the company operates in more than 100 countries and counts 90% of Fortune 100 companies as clients) and a coworking model that could be viewed more favorably by property owners (e.g., revenue share agreements in lieu of fixed-cost leases through special purpose vehicles).”
4. LKQ Corporation (NASDAQ: LKQ)
ValueAct’s Stake Value: $1,060,711,000
Percentage of ValueAct’s 13F Portfolio: 11.75%
Number of Hedge Fund Holders: 35
LKQ Corporation (NASDAQ: LKQ) is a manufacturer of alternative and specialty parts for automobiles and other vehicles in the United States. It was founded in 1998 and is placed fourth on the list of top 10 stocks to buy according to Jeff Ubben’s ValueAct Capital. Shares of LKQ Corporation (NASDAQ: LKQ) are up 59.87% in the past 12 months.
On August 2, Truist analyst Stephanie Benjamin raised her price target on LKQ Corporation (NASDAQ: LKQ) to $63 from $58 and maintained a “Buy” rating on the shares. On July 29, LKQ Corporation (NASDAQ: LKQ) posted earnings for the second quarter of 2021. It declared earnings per share of $1.13, beating the estimates by $0.38. Revenue over the period was $3.43 billion, up 30.4% year over year.
Out of the hedge funds being tracked by Insider Monkey, ValueAct Capital is a leading shareholder in LKQ Corporation (NASDAQ: LKQ), with 21.55 million shares worth more than $1.06 billion. This represents 11.75% of their portfolio. The hedge fund’s stake in LKQ Corporation (NASDAQ: LKQ) stock increased by 1% in the second quarter of 2021, latest data reveals.
In its first-quarter 2021 Investor Letter, Bonsai Partners highlighted a few stocks and LKQ Corporation (NASDAQ: LKQ) is one of them. Here is what the fund said:
“LKQ is the largest provider of alternative collision and mechanical automotive parts in the United States. In Europe, they are the leading distributor of general automotive maintenance parts and supplies. Its shares appreciated 20.1% during the quarter.
During the quarter, LKQ shared its fourth-quarter results: showing a slight revenue decline and a nearly 30% increase in quarterly profit Vs. the same period last year. COVID has proved a surprising catalyst for my investment thesis which revolves around optimizing their recent large acquisitions that were never efficiently integrated.
Admittedly, in addition to LKQ’s quarterly performance, thematically, there has been broad enthusiasm for “re-opening” trades, of which, LKQ has been a beneficiary. Most importantly, the prior overhang related to LKQ’s debt burden is now all but behind us. Their net debt to EBITDA ratio now sits below 2x, a stark change from the near 3x leverage ratio before the pandemic. At that time, LKQ’s leverage had the potential to spiral upward to nearly 4-5x if the business experienced a prolonged shutdown. It’s good to be past this issue.”
3. Citigroup Inc. (NYSE: C)
ValueAct’s Stake Value: $1,467,759,000
Percentage of Jeff ValueAct’s 13F Portfolio: 16.26%
Number of Hedge Fund Holders: 87
Citigroup Inc. (NYSE: C) is a financial service holding company that offers a wide range of services. It was incorporated in 1812 and ranks third on the list of top 10 stocks to buy according to Jeff Ubben’s ValueAct Capital. Citigroup Inc. (NYSE: C) shares have returned 35.51% to investors during the course of the past 12 months.
On August 11, Citigroup (NYSE: C) unveiled its Bridge created by the Citi financing platform, linking firms with local lenders for loans up to $10 million. The hedge fund owns 20.75 million shares in Citigroup (NYSE: C), worth over $1.47 billion, representing 16.26% of their portfolio. The hedge fund has trimmed its stake in the firm by 5% in the second quarter of 2021. Natixis Global Asset Management’s Harris Associates is a leading shareholder in Citigroup (NYSE: C), with 27.39 million shares worth $1.94 billion.
Artisan Partners Limited Partnership, in its fourth-quarter 2020 investor letter, mentioned Citigroup Inc. (NYSE: C). Here is what the fund said:
“We fully exited position in Citigroup. Global financial services company Citigroup made a $900 million clerical error and received a public reprimand from federal regulators. This, after a decade focused on process control, information technology and risk systems, makes the error substantially more costly than just the $900 million mistake. Regulators believe the company’s risk management improvements have fallen short of expectations. To rectify the situation, a process and technology spending surge could negatively affect 2021-2022 profits by 10% to 20%. Trust and confidence are important in large financial institutions, and this incident combined with the CEO’s sudden retirement shook ours.”
2. Seagate Technology Holdings plc (NASDAQ: STX)
ValueAct’s Stake Value: $1,527,966,000
Percentage of ValueAct’s 13F Portfolio: 17.87%
Number of Hedge Fund Holders: 31
Seagate Technology Holdings plc (NASDAQ: STX) provides data storage technology and solutions. The company was founded in 1978, and it stands second on the list of top 10 stocks to buy according to Jeff Ubben’s ValueAct Capital. Shares of Seagate Technology Holdings plc (NASDAQ: STX) rallied 92.13% in the past 12 months.
On August 16, UBS analyst Timothy Arcuri upgraded Seagate Technology Holdings plc (NASDAQ: STX) to “Buy” from “Neutral” and gave a price target of $105, up from $83. On August 6, Seagate Technology Holdings plc (NASDAQ: STX) declared earnings for the fourth quarter of 2021. It reported earnings per share of $2.00, beating the market predictions by $0.12.
The stock is a new arrival on ValueAct Capital’s portfolio, as the hedge fund owns about 17.38 million shares of Seagate Technology Holdings plc (NASDAQ: STX), worth $1.53 billion. According to our database, the number of Seagate Technology Holdings plc’s (NASDAQ: STX) long hedge funds positions increased in the second quarter of 2021. There were 31 hedge funds that hold a position in Seagate Technology Holdings plc’s (NASDAQ: STX) compared to 27 funds in the first quarter of 2021.
1. KKR & Co. Inc. (NYSE: KKR)
ValueAct’s Stake Value: $1,612,580,000
Percentage of ValueAct’s 13F Portfolio: 17.87%
Number of Hedge Fund Holders: 54
KKR & Co. Inc. (NYSE: KKR) is a private equity and real estate investment firm. The company was incorporated in 1976 and is ranked first on the list of top 10 stocks to buy according to Jeff Ubben’s ValueAct Capital. Shares of KKR & Co. Inc. (NYSE: KKR) surged 80.50% in the past 12 months.
On August 26, KKR & Co. Inc. (NYSE: KKR) agreed to buy Ritchies Transport, a New Zealand-based transportation company with an 86-year history. The funds will be used to further KKR’s purpose of better connecting local communities and supporting the country’s increasing public transportation network. On August 11, Deutsche Bank analyst Brian Bedell upgraded KKR & Co. Inc. (NYSE: KKR) to “Buy” from “Hold” and gave a price target of $75, up from $69.
ValueAct Capital holds more than 27.22 million shares in KKR & Co. Inc. (NYSE: KKR), worth $1.61 billion, representing 17.87% of their portfolio. The hedge fund has trimmed its stake in the firm by 14% in the second quarter of 2021. KKR & Co. Inc. (NYSE: KKR) saw a decrease in hedge fund sentiment recently. The number of hedge fund positions declined to 54 in the second quarter of 2021 compared to 56 positions in the previous quarter.
Vulcan Value Partners, in its second quarter 2021 investor letter mentioned KKR & Co. Inc. (NYSE: KKR). Here is what the fund said:
“KKR & Co. Inc. was also a material contributor during the quarter. This company has deep and growing relationships with capital providers. The company has a stable management fee stream and a proven ability to convert investor capital into a performance fee stream. These attributes contribute to its stable and growing intrinsic values. In addition, the company enjoy nice tailwinds of increasing allocations to private and alternative investments. We are pleased to continue to own KKR & Co.”
You can also take a peek at 10 Best Stocks to Buy According to Warren Buffett and 10 Solar Penny Stocks to Buy According to Reddit
