ValueAct Capital Increases Rockwell Collins Stake ~ market folly

Wednesday, October 2, 2013

ValueAct Capital Increases Rockwell Collins Stake

Jeff Ubben's hedge fund ValueAct Capital filed various forms with the SEC regarding their position in Rockwell Collins (COL).  Per the filing, ValueAct now shows a 9.7% ownership stake in COL with 13,113,000 shares.

The 13D filing breaks down their recent buys and shows they were purchasing COL shares between September 20th and 27th at prices in the high $68's.  They've purchased over 1.7 million shares since their last disclosure.  Also worth highlighting: COL is currently trading below levels where ValueAct bought.

ValueAct seems to like Rockwell's dominance in avionics as it gives them pricing power (their only main competitor is Honeywell).  Ubben apparently also likes the company's penchant for share repurchases.

Per Google Finance, Rockwell Collins is "engaged in design, production and support of communications and aviation electronics for commercial and military customers worldwide. The Company’s products and systems are primarily focused on aviation applications, The integrated system solutions and products it provide to its served markets include communications, navigation, automated flight control, displays/surveillance, simulation and training, integrated electronics and information management systems. The Company also provides a range of services and support to its customers through a network of service centers, including equipment repair and overhaul, service parts, field service engineering, training, technical information services and aftermarket used equipment sales. The Company operates in two segments: Government Systems and Commercial Systems."

If you missed it, be sure to check out Jeff Ubben's presentation from the Value Investing Congress.

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