In this article, we discuss the top 5 stocks to invest in according to Jeffrey Ubben’s ValueAct Capital. If you want to read our detailed analysis of Ubben’s history, and hedge fund performance, go directly to the Top 10 Stocks to Invest In According to Jeffrey Ubben’s ValueAct Capital.
5. CBRE Group, Inc. (NYSE: CBRE)
Ubben’s Stake Value: $809,281,000
Percentage of Jeffrey Ubben’s 13F Portfolio: 9.44%
Number of Hedge Fund Holders: 30
CBRE Group, Inc. (NYSE: CBRE) is fifth on the list of the top stocks to invest in according to Jeffrey Ubben’s ValueAct Capital. It is a commercial and corporate real estate company, providing integrated services to related clients. As of Q1 2021, ValueAct Capital holds 10.2 million shares in the company, worth $809 million. The fund did not change its position in CBRE Group, Inc. (NYSE: CBRE) in this quarter.
The latest quarterly report of CBRE Group, Inc. (NYSE: CBRE) stated $0.86 earnings per share, beating the market estimate of $0.67. The quarterly revenue stood at $5.9 billion, up from $5.8 billion during the same period last year. The share price of CBRE stock has gained 87% in the past year, making it one of the top stocks to invest in according to Jeffrey Ubben’s ValueAct Capital.
Third Avenue Management, an investment management firm, released its Q1 2021 investor letter and mentioned CBRE Group, Inc. (NYSE: CBRE) in it. Here is what the firm has to say:
“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)
Ubben’s Stake Value: $912,116,000
Percentage of Jeffrey Ubben’s 13F Portfolio: 10.64%
Number of Hedge Fund Holders: 36
LKQ Corporation (NASDAQ: LKQ) is a Chicago-based company dealing in automotive equipment, including tires, wheel, and performance-related accessories. As of Q1 2021, ValueAct holds 21.5 million shares in the company, worth $912 million. LKQ Corporation (NASDAQ: LKQ) stands fourth in the list of the top stocks to invest in according to Jeffrey Ubben’s ValueAct Capital.
In Q1 2021, LKQ Corporation (NASDAQ: LKQ) reported $0.94 earnings per share, surpassing the estimate of $0.63. Overall, the company generated $3.1 billion in revenues in the quarter. The LKQ stock has gained by 80.5% in the past year and 34.8% year to date.
Bonsai Partners released its Q1 2021 investor letter and mentioned LKQ Corporation (NASDAQ: LKQ) among other stocks. Here is what the firm has to say:
“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. KKR & Co. Inc. (NYSE: KKR)
Ubben’s Stake Value: $1,542,911,000
Percentage of Jeffrey Ubben’s 13F Portfolio: 18%
Number of Hedge Fund Holders: 56
KKR & Co. Inc. (NYSE: KKR) is a New York-based investment company, offering services in insurance and asset management globally. It is one of the top stocks to invest in according to Jeffrey Ubben’s ValueAct Capital because the fund has a $1.52 billion stake in the company.
In Q1 2021, KKR & Co. Inc. (NYSE: KKR) generated over $4.5 billion in revenues or $0.75 in earnings per share, beating the market estimate of $0.64. The KKR stock hit its low in March 2020 due to the global market crash, but the share prices have soared by 77% in the past year. KKR & Co. Inc. (NYSE: KKR) also announced a $0.145 quarterly dividend earlier in April.
Vulcan Value Partners, an investment management firm, published its first-quarter 2021 letter and mentioned KKR & Co. Inc. (NYSE: KKR) in it. Here is what the firm has to say:
“KKR & Co. Inc. was another material contributor during the quarter. The company has deep and growing relationships with capital providers. KKR enjoys a very stable management fee stream and a proven ability to convert capital into a performance fee stream, both of which lead to a business with a stable and growing intrinsic value. In addition, the company enjoys nice tailwinds of increasing allocations to private and alternative investments. In addition to reporting solid results, KKR increased disclosure around its compensation ratio, improving transparency and making it easier to model the company’s earning power.”
2. Citigroup Inc. (NYSE: C)
Ubben’s Stake Value: $1,580,401,000
Percentage of Jeffrey Ubben’s 13F Portfolio: 18.44%
Number of Hedge Fund Holders: 90
Citigroup Inc. (NYSE: C) is an American financial services company serving over 200 million customers globally. At the end of Q1 2021, ValueAct owns over 21.7 million shares in the company, worth $1.58 billion.
Artisan Partners Limited Partnership, an investment management firm, published its fourth-quarter 2020 investor letter and mentioned Citigroup Inc. (NYSE: C) among other stocks. Here is what the firm has to say:
“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.”
1. Seagate Technology Holdings plc (NASDAQ: STX)
Ubben’s Stake Value: $1,766,111,000
Percentage of Jeffrey Ubben’s 13F Portfolio: 20.61%
Number of Hedge Fund Holders: 27
Seagate Technology Holdings plc (NASDAQ: STX) stands first on our list of the top stocks to invest in according to Jeffrey Ubben’s ValueAct Capital. It is a data storage company. As of Q1 2021, ValueAct Capital owns over 23 million shares in Seagate Technology Holdings plc (NASDAQ: STX), worth $1.76 billion.
The company recently boosted its Q4 guidance, now expecting EPS in between $1.70-2.00, compared to the previous guidance of $1.45-1.75. The consensus estimate of the EPS is $1.65. Morgan Stanley rated the STX stock as ‘Overweight’ and increased its price target from $98 to $114.
Alger, an investment management firm, published its Q4 2020 investor letter and mentioned Seagate Technology Holdings plc (NASDAQ: STX). Here is what the firm has to say:
“Short exposure to Seagate Technology also detracted from performance. Seagate designs and manufactures data storage products and solutions, including hard disk drives, solid state hybrid drives, solid state drives and storage subsystems. We have been short the shares because the company’s hard drive business faces longer term secular challenges as hard disk drives are increasingly being replaced by solid state flash drives. Gaming consoles now use flash drives almost exclusively and more than 80% of notebook personal computers also use the technology. The economy’s cyclical pickup off the pandemic low, however, resulted in an uptick in hard disk drive demand in the retail, corporate desktop and video surveillance markets, which supported the performance of Seagate shares. As the price of Seagate shares increased, the short exposure detracted from the portfolio’s performance.”
You can also take a peek at 10 Best Stocks To Buy Now According To Quant Billionaires and 10 Best Stocks to Buy According to Billionaire Mason Hawkins.
