ValueAct’s Jeffrey Ubben’s Top Stock Picks Include Adobe Systems

Jeffrey Ubben is an activist investor, but a patient one; rather than agitate for immediate change and use the media to increase pressure on management, his preferred strategy is to take a large stake in an underappreciated company and carefully work with management- though with an eye towards good corporate governance- to unlock shareholder value. Ubben managed money at Fidelity and at Blum Capital Partners before founding ValueAct Capital in 2000.

ValueAct is appropriately named: it is a value investor first, and only if that value doesn’t show up and the fund remains convinced that the business is high quality does it turn towards activism. Board members aren’t always informed enough to challenge management on business strategy- or are not inclined to do so- and so Ubben likes to grab Board seats and serve as a voice of opposition. ValueAct tends to invest in focused midcap companies in a variety of industries.

In its most recent 13F filing, ValueAct only reported owning 13 stocks with two of those positions being very small. Most of its stakes were worth over $400 million, including three that were about 41 billion or more. Because of the fund’s longer term strategy it makes very few new investments and percentage changes in its holdings tend to be small; it also tends to own stocks for years. Read on to learn more about its five largest holdings or see the rest of Ubben’s stock picks.

Motorola Solutions Inc (NYSE:MSI). ValueAct owned about 29 million shares of the communications equipment company formed from the spinout of Motorola Mobility Holdings in early 2011 (our database of 13F filings shows that that is about when Ubben and his team started buying in). Motorola trades at 15 times consensus earnings for 2013. Billionaire George Soros increased his own stake in Motorola last quarter to a total of 2.9 million shares (check out more stocks Soros was buying).