Jeff Ubben's Interview with CNBC ~ market folly

Tuesday, March 15, 2016

Jeff Ubben's Interview with CNBC

CNBC's Kelly Evans sat down with activist investment manager Jeff Ubben of ValueAct Capital recently.  Here's a summary of his latest thoughts:

On his recent portfolio activity: "We have been selling a number of our companies where we have been there, done all we could, the stocks are fairly valued... and it's been hard to redeploy that."  They sold some Adobe, MSCI, Microsoft, and Motorola Solutions.

He notes the only compelling investment they've found value in has been Rolls Royce (RR.L).

On valuations:  He notes that last valuation cycle the bubble was largely public and this time around, more and more companies are private so the bubble could burst slower he guessed.

On TwentyFirst Century Fox (FOX/FOXA): He likes the transition from old media to new media and wants to 'get rid of the middleman' by going direct to consumer.  He thinks James Murdoch is terrific and can lead the change.

On his stakes in Halliburton (HAL) / Baker Hughes (BHI):  If the deal closes, he thinks ValueAct will do really well there.  If it doesn't close, he says people have kind of forgotten what happens to Baker's balance sheet with receiving a break-up fee.

On Valeant (VRX):  This interview was shown yesterday and today VRX is down 47% on guidance cut and default worries.  But Ubben's comments at the time were that CEO Michael Pearson is "incredibly driven."  ValueAct spearheaded the effort to place him as CEO many years ago.  Ubben also said that "we're solving problems (at the company) as we speak" but also noted that "we haven't been able to control the narrative at all."  ValueAct has owned VRX for years and at one point it was a hugely successful play for them, but with shares plummeting this year, they've basically come close to round-tripping their gains.

Embedded below is the video of Ubben's interview:

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