market folly

Jeffrey Ubben's activist hedge fund ValueAct Capital recently sold shares in two positions: Gartner (IT) and KAR Auction Services (KAR). ValueAct manages $5 billion and has earned a net annualized return of 13.5% over the last ten years.


Gartner (IT)

First, ValueAct sold 9,700,000 shares of Gartner (IT) at $34.44 per share. After this transaction, they still own 7,090,513 shares. This marks almost a 58% reduction in their position size (shares currently trade around $37.36).

At the end of 2010, IT was their third largest position behind only Valeant Pharmaceuticals (VRX) and Sara Lee (SLE). But now with the sale, the position sits in the middle of their portfolio. This is the second time in six months they've sold shares of IT as they previously reduced their position in September.

KAR Auction Services (KAR)

Second, Ubben's hedge fund sold 1,350,000 shares of KAR Auction Services (KAR) with the bulk of the sale coming at $14.21 per share. After their sales, ValueAct was left with 908,828 shares. All told, it looks like they sold almost 60% of their position. The stock currently trades around $14.25.

ValueAct typically focuses on undervalued companies in the healthcare, technology, and information services sectors.

Companies' Background

Per Google Finance, Gartner is "an information technology (IT) research and advisory company. The Company is a partner to 60,000 clients in 10,000 distinct organizations in over 80 countries. The Company’s principal products and services are delivered through its Research, Consulting and Events segments."

KAR Auction Services is "a holding company. The Company is a provider of vehicle auction services in North America. It facilitates auction services for sellers of used, or whole car, vehicles and salvage vehicles, through its 214 physical auction locations and Internet venues."