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Sydnee Gatewood
Sydnee Gatewood
Articles (3098) 

Jeff Ubben Buys 1, Sells 1 in 1st Quarter

ValueAct leader to step down from CIO role

Jeff Ubben (Trades, Portfolio)’s ValueAct Holdings bought Bioverativ Inc. (NASDAQ:BIVV) and sold Allison Transmission Holdings Inc. (NYSE:ALSN) during the first quarter.

Ubben announced May 15 he is stepping down as ValueAct’s chief investment officer (CIO). He will remain as CEO but will concentrate on finding new investments and serving on boards. President Mason Morfit will step into the role of CIO in July.

The firm seeks value in a limited number of companies that are out of favor or undergoing a transition. As such, Ubben takes an activist approach and works with companies to improve their returns. The guru’s firm currently manages a concentrated portfolio of 14 stocks valued at $11.9 billion.

Ubben purchased 8.5 million shares of Bioverativ for an average price of $47.97 per share, giving it 3.8% portfolio space.

The biotechnology company, which was spun off from Biogen Inc. (NASDAQ:BIIB) in February, has a market cap of $5.7 billion; its shares were trading around $52.5 on Wednesday with a price-earnings (P/E) ratio of 82.03, a price-book (P/B) ratio of 9.7 and a price-sales (P/S) ratio of 6.

The Peter Lynch chart below shows the stock is trading above its fair value.


GuruFocus ranked the company’s financial strength 9 of 10 and its profitability and growth 4 of 10. It does not currently pay a dividend.

With his purchase, Ubben became Bioverativ’s largest guru shareholder with 7.8% of outstanding shares. In total, 11 other gurus hold the stock.

Ubben sold 10.5 million shares of Allison Transmission for an average price of $35.64 per share, impacting the portfolio by -2.9%.

The vehicle transmissions manufacturer has a market cap of $5.8 billion; its shares were trading around $38.21 on Wednesday with a P/E ratio of 25.3, a P/B ratio of 7.8 and a P/S ratio of 3.4. Earlier this month, Blue Bird Corp. (NASDAQ:BLBD) announced it will be incorporating Allison’s FuelSense 2.0 into its buses.

According to the Peter Lynch chart below, the stock is trading above its fair value.


GuruFocus ranked Allison’s financial strength 4 of 10 and its profitability and growth 6 of 10. The trailing dividend yield is 1.58% and the forward dividend yield is 1.6%.

Lou Simpson (Trades, Portfolio) is the Allison Transmission’s largest shareholder among the gurus. In addition, seven other gurus own the stock.

During the quarter, Ubben increased his holdings of NetScout Systems Inc. (NASDAQ:NTCT), Valeant Pharmaceuticals International Inc. (VRX), Alliance Data Systems Corp. (NYSE:ADS) and Baker Hughes Inc. (BHI). He reduced his positions in Microsoft Corp. (NASDAQ:MSFT) and Morgan Stanley (NYSE:MS).

Disclosure: I do not own any stocks mentioned in the article.

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About the author:

Sydnee Gatewood
I am the editorial director at GuruFocus. I have a BA in journalism and a MA in mass communications from Texas Tech University. I have lived in Texas most of my life, but also have roots in New Mexico and Colorado. Follow me on Twitter! @gurusydneerg

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