Top 10 Stock Picks of Mason Morfit’s ValueAct Capital

Published January 5, 2022 at 12:06 pm EST Updated September 7, 2026 at 1:54 pm EDT

In this article, we discuss the top 10 stock picks of Mason Morfit’s ValueAct Capital.

ValueAct Capital was co-founded by Jeffrey Ubben in 2000. ValueAct is an investment management firm based in San Francisco, managing the capital of multiple clients including private and institutional investors. With a top ten holdings concentration of 98.97%, the firm’s investments are focused on the real estate, information technology, industrials, healthcare, and finance sectors.

Mr. Ubben left the firm in June of 2020 to found Inclusive Capital Partners. Currently, Mason Morfit is leading the hedge fund.

The most notable stock picks of ValueAct Capital include Bausch Health Companies Inc. (NYSE:BHC), Citigroup Inc. (NYSE:C), and Fiserv, Inc. (NASDAQ:FISV), in addition to others discussed at length below.

Top 10 Stock Picks of Jeffrey Ubben's ValueAct Capital

Jeffrey Ubben, Founder of ValueAct Capital and Inclusive Capital Partners

Our Methodology

We used the Q3 portfolio of ValueAct Capital to list down the firm’s top 10 stock picks, ranking the securities according to the firm’s stake value in each holding. For further context on each company, we mentioned the Q3 earnings, analyst ratings, and the hedge fund sentiment around each stock.

Top Stock Picks of ValueAct Capital

10. SLM Corporation (NASDAQ:SLM)

ValueAct Capital’s Stake Value: $297,663,000

Percentage of ValueAct Capital’s 13F Portfolio: 3.44%

Number of Hedge Fund Holders: 27

SLM Corporation (NASDAQ:SLM), commonly known as Sallie Mae, is a government sponsored consumer banking company, offering private student loans, credit cards, college planning tools, and retail banking. ValueAct Capital owns approximately 17 million SLM Corporation shares as of Q3 2021, worth $297.6 million, representing 3.44% of the firm’s total investments.

On October 20, SLM Corporation posted earnings for the third quarter, announcing an EPS of $0.24, beating estimates by $0.09. The Q3 revenue totaled $357.52 million, outperforming estimates by $14.99 million.

SLM Corporation, on October 20, declared a $0.11 per share quarterly dividend, which reflects a 266.7% increase from the prior dividend of $0.03. The dividend was paid on December 15 to shareholders of record on December 3.

As of Q3 2021, 27 hedge funds tracked by Insider Monkey were long SLM Corporation, holding stakes worth $891.5 million. One of the leading stakeholders of SLM Corporation is Impactive Capital, with almost 10 million shares worth $175.2 million.

In addition to Bausch Health Companies Inc., Citigroup Inc., and Fiserv, Inc., SLM Corporation is a notable stock from ValueAct Capital’s third quarter portfolio.

9. Insight Enterprises, Inc. (NASDAQ:NSIT)

ValueAct Capital’s Stake Value: $299,501,000

Percentage of ValueAct Capital’s 13F Portfolio: 3.56%

Number of Hedge Fund Holders: 16

Insight Enterprises, Inc. (NASDAQ:NSIT), a company focusing on B2B technology solutions like cloud and data center transformation, workforce integration, and digital innovation, is one of the top stock picks of ValueAct Capital. In the third quarter of 2021, the hedge fund increased its position in Insight Enterprises, Inc. by 17%, holding a $299.5 million stake in the company. The stock accounts for 3.56% of ValueAct Capital’s total Q3 investments.

Insight Enterprises, Inc. announced its Q3 results on November 4, posting earnings per share of $1.87, beating estimates by $0.20. The quarterly revenue gained 26.39% year-over-year, equaling $2.45 billion, outperforming estimates by $286.10 million.

Barrington analyst Vincent Colicchio on November 11 raised the price target on Insight Enterprises, Inc. to $122 from $116 and kept an Outperform rating on the shares after the Q3 earnings beat. The analyst believes that Insight Enterprises, Inc. is well positioned to generate solid revenue and earnings growth in 2022, citing good planning with clients, solid demand for devices and cloud solutions, and growing interest in infrastructure technology.

A total of 16 hedge funds in the Q3 database of Insider Monkey were bullish on Insight Enterprises, Inc., down from 19 funds in the prior quarter. Royce & Associates is one of the leading Insight Enterprises, Inc. stakeholders, with an approximately $21 million position in the company.

Here is what L1 Capital has to say about Insight Enterprises, Inc. in its Q2 2021 investor letter:

“Insight Enterprises, a previous top-ten holding, was divested in full during the quarter. In conjunction with inline Q1 2021 results, Insight announced the intention for CEO, Ken Lamneck to retire by the end of this year. A new CEO has not yet been announced. Ken Lamneck has been CEO of Insight for over 11 years and is currently 65 years old, so his retirement was not a shock. However, we do consider Lamneck to have been central to shareholder value creation, including through successful acquisitions. A period of uncertainty while leadership transitioned to an unknown new CEO, as well as share price appreciation led us to conclude more attractive risk adjusted opportunities lay elsewhere in our Portfolio and Bench of potential investments.”

9. Trinity Industries, Inc. (NYSE:TRN)

ValueAct Capital’s Stake Value: $407,709,000

Percentage of ValueAct Capital’s 13F Portfolio: 4.72%

Number of Hedge Fund Holders: 17

Trinity Industries, Inc. (NYSE:TRN) is an American conglomerate that provides services like manufacturing barges, designing tank heads and tank containers, fleet management, maintenance, and leasing services. Trinity Industries, Inc. also produces construction materials, serving clients from the industrial, energy, transportation, and construction sectors. ValueAct Capital holds a $407.7 million stake in Trinity Industries, Inc. as of the third quarter, which represents 4.72% of the fund’s total 13F portfolio.

On December 10, Trinity Industries, Inc. declared a quarterly cash dividend of $0.23 per share, up from $0.21 per share in the prior quarter, representing the company’s 231st consecutively paid dividend. The dividend is payable on January 31, 2022 to shareholders of record on January 14, 2022.

In the third quarter earnings report published on October 21, Trinity Industries, Inc. posted an EPS of $0.29, beating estimates by $0.11. The $503.50 million revenue exceeded estimates by $49.53 million.

Monomoy Capital Partners, a New York-based private equity firm, announced on November 3 that it has signed a definitive agreement to acquire Trinity Highway Products from Trinity Industries, Inc. for approximately $375 million. The transaction remains subject to customary closing conditions and regulatory approval.

Cardinal Capital is one of the leading Trinity Industries, Inc. stakeholders as of Q3 2021, with over 2 million shares worth $55.5 million. Overall, 17 hedge funds were long Trinity Industries, Inc. in the third quarter, down from 20 funds in the preceding quarter.

7. Bausch Health Companies Inc. (NYSE:BHC)

ValueAct Capital’s Stake Value: $499,674,000

Percentage of ValueAct Capital’s 13F Portfolio: 5.58%

Number of Hedge Fund Holders: 39

Bausch Health Companies Inc. is a multinational pharmaceutical company that provides medication for skin diseases, gastrointestinal disorders, eye health, and neurology. ValueAct Capital owns roughly 18 million Bausch Health Companies Inc. shares, worth $499.6 million, representing 5.58% of the fund’s total third quarter investments.

The Q3 results were reported on November 2 by Bausch Health Companies Inc.. The company posted an EPS of $1.15, exceeding estimates by $0.08. The $2.11 billion revenue was down 1.26% year-over-year, missing estimates by $41.53 million.

JPMorgan analyst Chris Schott on November 3 recommended taking advantage of the post-earnings selloff in shares of Bausch Health Companies Inc.. The analyst stated that it is not surprising that the shares sold off but said his sum-of-the-parts analysis “supports a very favorable risk/reward” at current share levels. Schott kept an Overweight rating on Bausch Health Companies Inc. with a $38 price target.

Icahn Capital LP is the largest Bausch Health Companies Inc. stakeholder as of Q3 2021, with 34.1 million shares worth approximately $950 million. Overall, 39 hedge funds were long Bausch Health Companies Inc. in the third quarter, down from 45 funds in the preceding quarter.

Here is what Miller Value Partners has to say about Bausch Health Companies Inc. in its Q1 2021 investor letter:

“Bausch Health Companies (BHC) climbed 55% during the period. Glenview (6% owner) sent a letter to the company in early February arguing the company has not acted to unlock shareholder value and urging the company to sell its eye care business. Shortly after, activist investor Carl Icahn disclosing a 7.83% stake in the company. The company responded to the filing saying that they remain committed to splitting the business into two parts, but are open to pursuing all opportunities. The company reported strong 4Q results with better-than-expected 2021 guidance. 4Q revenue came in at $2,213M slightly ahead of consensus of $2,165M and EPS of $1.34 beat consensus of $1.12. The company guided for 2021 revenue of $8.6-8.8B coming in ahead of expectations of $8.55B with EBITDA of $3.4-3.55B ahead of $3.46B estimated. The company announced the transition of Paul Herendeen to an advisory role to be succeeded by Sam Eldessouky, previously senior vice president, controller and chief accounting officer. Finally, the company announced the sale of Amoun Pharmaceutical for $740M, which was relatively in line with estimates and should help support debt reduction targets ahead of the planned spin-off of Bausch + Lomb eye care business.”

6. CBRE Group, Inc. (NASDAQ:CBRE)

ValueAct Capital’s Stake Value: $898,887,000

Percentage of ValueAct Capital’s 13F Portfolio: 10.41%

Number of Hedge Fund Holders: 37

CBRE Group, Inc. (NASDAQ:CBRE), the largest real estate company in the world, is one of the top stock picks of ValueAct Capital in the third quarter. The hedge fund holds 9.23 million CBRE Group, Inc. shares, worth $898.8 million, accounting for 10.41% of the total securities.

Keefe Bruyette analyst Jade Rahmani upgraded CBRE Group, Inc. on November 23 to Outperform from Market Perform with an unchanged price target of $115.

On October 28, CBRE Group, Inc. reported third quarter results, posting earnings per share of $1.39, beating estimates by $0.19. The $6.80 billion revenue was up 20.43% year-over-year, exceeding estimates by almost $144 million.

Of the 37 hedge funds that reported owning stakes in CBRE Group, Inc. as of Q3 2021, Harris Associates is the largest company stakeholder, with 10.2 million shares worth over $1 billion.

CBRE Group, Inc. is a notable stock from ValueAct Capital’s Q3 portfolio, in addition to Bausch Health Companies Inc., Citigroup Inc., and Fiserv, Inc..

Here is what Ariel Investments has to say about CBRE Group, Inc. in its Q3 2021 investor letter:

“CBRE Group is the world’s largest commercial real estate services and investment firm, with leading global market positions in leasing, property sales, occupier outsourcing and valuation businesses. Founded in San Francisco in 1906, CBRE Group operates in more than 100 countries and its diversified client base includes more than 90 of the Fortune 100 companies. As of June 30, 2021, CBRE Investment Management reported $129.1 billion in assets under management.

CBRE Group demonstrated resilience through the pandemic—stabilizing its revenue base by expanding into new lines of business and categories of clients. The company’s strong fundamentals will support its continued growth, as we expect CBRE to benefit from industry tailwinds during a sustained period of recovery…” (Click here to see the full text)

5. Citigroup Inc. (NYSE:C)

ValueAct Capital’s Stake Value: $971,720,000

Percentage of ValueAct Capital’s 13F Portfolio: 11.25%

Number of Hedge Fund Holders: 79

Citigroup Inc. is one of the Big Four American banking institutions and a multinational financial services corporation, offering asset management, retail banking, commodities, equities trading, insurance, investment management, mortgage loans, mutual funds, private equity, risk management, and wealth management.

ValueAct Capital owns 13.8 million Citigroup Inc. shares as of September 2021, worth $971.7 million, representing 11.25% of the fund’s total 13F securities.

Credit Suisse analyst Susan Roth Katzke on December 10 lowered the price target on Citigroup Inc. to $76 from $82 and kept an Outperform rating on the shares. The analyst slashed the price target to reflect the impact of the wind down of Citigroup Inc.’s consumer banking operations in Korea, suspended share buybacks in Q4 2021 with less capital return capacity, and a more conservative assessment of PPNR growth prospects.

In the third quarter of 2021, 79 hedge funds monitored by Insider Monkey were long Citigroup Inc., down from 87 funds in the prior quarter. One of the leading Citigroup Inc. stakeholders as of Q3 is Eagle Capital Management, with 19.8 million shares worth $1.39 billion.

Here is what Artisan Value Fund has to say about Citigroup Inc. in their Q4 2020 investor letter:

“We fully exited the 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.”

4. LKQ Corporation (NASDAQ:LKQ)

ValueAct Capital’s Stake Value: $1,084,417,000

Percentage of ValueAct Capital’s 13F Portfolio: 12.56%

Number of Hedge Fund Holders: 38

LKQ Corporation (NASDAQ:LKQ) is a Chicago-based provider of automobile components and auto repair parts, operating in North America, Taiwan, and Europe. ValueAct Capital owns 21.5 million LKQ Corporation shares, worth $1.08 billion, accounting for 12.56% of the firm’s total Q3 investments.

Publishing its third quarter financial results on October 28, LKQ Corporation posted earnings per share of $1.02, beating estimates by $0.16. Revenue over the period increased 8.28% year-over-year to $3.30 billion, exceeding estimates by $30.45 million.

Barrington analyst Gary Prestopino on October 29 raised the price target on LKQ Corporation to $65-$70 from $60 and kept an Outperform rating on the shares following the “solid” Q3 beat. LKQ Corporation’s salvage business and major mechanical product groups exhibited strong growth due to increased quote conversion rates on salvage products versus aftermarket products, according to the analyst.

In Q3 2021, 38 hedge funds in the database of Insider Monkey reported owning stakes worth $1.69 billion in LKQ Corporation. Arrowstreet Capital is one of the leading company stakeholders, increasing its stake in the company by 16% in the third quarter, holding almost 5 million shares worth $248.9 million.

Here is what Bonsai Partners has to say about LKQ Corporation in their Q1 2021 investor letter:

“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. Fiserv, Inc. (NASDAQ:FISV)

ValueAct Capital’s Stake Value: $1,186,469,000

Percentage of ValueAct Capital’s 13F Portfolio: 13.74%

Number of Hedge Fund Holders: 65

Fiserv, Inc., a financial technology company offering point of sale payment terminals, is one of the top stock picks of ValueAct Capital. The hedge fund owns roughly 11 million Fiserv, Inc. shares as of Q3 2021, worth $1.18 billion, representing 13.74% of the total 13F portfolio.

The Q3 earnings report was published by Fiserv, Inc. on October 27. The company posted an EPS of $1.47, exceeding estimates by $0.02. Revenue over the period jumped 9.96% year-over-year to $4.16 billion, outperforming estimates by $59.26 million.

Wedbush analyst Moshe Katri lowered the price target on Fiserv, Inc. to $130 from $138 and kept an Outperform rating on the shares on December 20. The analyst cites ongoing indications of choppy consumer spending, renewed pandemic-driven B&M shutdowns/travel slowdown, and reduced spending on non-discretionary items because of inflationary pricing pressure on staple goods.

Harris Associates is the largest Fiserv, Inc. stakeholder as of Q3 2021, increasing its position in the company by 35%, holding 16.2 million shares worth $1.76 billion.

Here is what Madison Investors Fund has to say about Fiserv, Inc. in its Q1 2021 investor letter:

“This quarter we researched several new stock ideas, but because of high prices, acted on only one. Thus, a new portfolio name is Fiserv, with corporate headquarters in Brookfield, WI, just down I-94 from us. Fiserv is a technology company serving financial institutions (“FIs”) and retail merchants. It has two main business lines. In the first, it’s a market leader in outsourced IT solutions for banks and credit unions, online and mobile banking technology, digital money movement solutions, and card issuing services. Fiserv’s second core business is merchant acquiring and processing, where it’s a leader in providing a variety of solutions to help all types of merchants accept digital payments. They entered this business through the acquisition of First Data in 2019.

Within the first business, Fiserv’s software is critical to the daily operations of FI clients. Their solutions not only provide the vital central processing systems, but also enable services such as electronic bill pay and digital money transfers at both large institutions and local banks and credit unions alike. As such, it is an incredibly sticky business that is resilient through economic cycles. On the merchant acquiring side of Fiserv, they process trillions of dollars annually for millions of merchant clients. Their solutions cater to all types of merchants and optimize for seamless acceptance and high authorization rates while also limiting fraud. Similar to the IT outsourcing business, Fiserv’s merchant solutions are critical to their customers’ daily operations. Furthermore, we are especially encouraged by their investments in new solutions, particularly Clover and Carat. Clover is a small and midsize business merchant acquiring platform and Carat is an e-commerce acquiring platform. Both these products hit the bullseye in terms of the way people are interacting with the retail industry, and both are growing at above market rates, which we believe will sustain into the future.

In addition to Fiserv’s favorable business characteristics and competitive positioning, the management team, led by CEO Frank Bisignano, has a track record of successfully investing for growth, improving profitability, and intelligently allocating excess capital. We believe these value-creating activities will continue going forward.

Financial institutions are increasingly making investments to digitize their customer facing products and digital payments are increasingly taking share from cash as a form of payment. As a result, demand for Fiserv’s solutions should continue to grow nicely in the coming years. In our view, Fiserv offers a nice combination of above average growth, high profitability, business resiliency, and shareholder-friendly management. We do not believe these characteristics were fully reflected in Fiserv’s share price when we made our investment during the quarter at a discount to the market’s 2021 price-to-earnings (P/E) multiple, a valuation level well below Fiserv’s historical premium.

An offsetting trade was the sale of Cognizant Technology Solutions, which was sold around the time Fiserv was added to the portfolio. Cognizant had been held since 2018, and we had expected it to perform similarly to another portfolio holding in the same industry, Accenture. Alas, multiple years of below industry growth challenged the investment, and despite our belief that CEO Brian Humphries could materially improve operations, recent metrics regarding elevated employee turnover and still below-average revenue growth led us to conclude that there was more heavy lifting required at the company. We decided that our investors would be better served by being invested in Fiserv rather than Cognizant.”

2. Seagate Technology Holdings plc (NASDAQ:STX)

ValueAct Capital’s Stake Value: $1,433,956,000

Percentage of ValueAct Capital’s 13F Portfolio: 16.60%

Number of Hedge Fund Holders: 27

Seagate Technology Holdings plc (NASDAQ:STX), an American data storage company, represents 16.60% of ValueAct Capital’s total Q3 investments, with the hedge fund holding 17.3 million shares of the company worth $1.43 billion. Seagate Technology Holdings plc (NASDAQ:STX) is one of the best stocks to buy according to ValueAct Capital.

Posting its Q3 results on October 22, Seagate Technology Holdings plc (NASDAQ:STX) reported earnings per share of $2.35, exceeding estimates by $0.14. The quarterly revenue jumped 34.62% from the prior-year quarter, reaching $3.12 billion, surpassing estimates by $10.28 million.

Fox Advisors analyst Steven Fox on December 6 downgraded Seagate Technology Holdings plc (NASDAQ:STX) to Equal Weight from Overweight with no price target as he sees more limited upside following the stock’s 70% rise since the end of 2020.

Jacob Mitchell’s Antipodes Partners recently acquired a position in Seagate Technology Holdings plc (NASDAQ:STX), buying 717,129 shares of the company in Q3, worth $59.1 million. Overall, 27 hedge funds were bullish on Seagate Technology Holdings plc (NASDAQ:STX) as of September end, down from 31 funds in the previous quarter.

Here is what ClearBridge Investments has to say about Seagate Technology Holdings plc (NASDAQ:STX) in its Q1 2021 investor letter:

“Our high active share approach made the most difference in IT, where the portfolio’s holdings gained 4.5% compared to a loss for the benchmark. Results were led by our more cyclical positions in digital storage provider Seagate Technology.”

1. KKR & Co. Inc. (NYSE:KKR)

ValueAct Capital’s Stake Value: $1,464,490,000

Percentage of ValueAct Capital’s 13F Portfolio: 16.96%

Number of Hedge Fund Holders: 56

KKR & Co. Inc., a global investment company dealing in private equity, energy, infrastructure, real estate, and credit, is the top stock pick of ValueAct Capital as of Q3 2021. KKR & Co. Inc. stock represents 16.96% of ValueAct Capital’s total investments, with the fund holding a $1.46 billion position in the company.

JMP Securities analyst Devin Ryan on December 22 kept his Outperform rating and $92 price target on KKR & Co. Inc. after the company announced “record” intra-quarter realizations of over $1.15 billion so far in Q4, setting up a “strong finish” to 2021.

KKR & Co. Inc., on November 2, posted its Q3 results. EPS in the quarter totaled $1.05, topping estimates by $0.10. The revenue gained 42.65% year-over-year, reaching $818.58 million, surpassing estimates by $108.92 million.

Of the 56 hedge funds that were bullish on KKR & Co. Inc. in the third quarter, Akre Capital Management is one of the leading company stakeholders, with an $896.7 million position.

Here is what Greenhaven Road Capital has to say about KKR & Co. Inc. in its Q3 2021 investor letter:

“KKR (KKR) – This remains an extremely resilient business with an A+ team enjoying the secular tailwinds of the migration of investable dollars toward alternative assets, where large allocators like the returns and love the muted volatility.”

You can also take a look 10 Tech Stocks to Buy According to Billionaire Philippe Laffont and 10 High Dividend Stocks to Buy According to Billionaire Lee Cooperman.

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The article was corrected at 4:10 PM ET on January 5, 2022, to reflect that ValueAct is led by Mason Morfit.