Jeff Ubben (Trades, Portfolio) is a founder, CEO and CIO of ValueAct Holding LP. Prior to founding ValueAct Capital in 2000, Ubben was a managing partner at Blum Capital Partners for more than five years. He has a B.A. from Duke University and an MBA. from the Kellogg Graduate School of Management at Northwestern University.
ValueAct Holdings LP concentrates on acquiring significant ownership stakes in a limited number of companies that it believes are fundamentally undervalued. The investment team seeks to identify companies that are out of favor, or may be undergoing significant transition. Such companies may be temporarily mispriced for a variety of reasons, including perceived unfavorable industry conditions, poor business performance, changes in management or ownership, reorganizations, or other external factors. These conditions can often result in fundamentally "good" businesses that are available at depressed valuations. The goal in each investment is to work productively with management and/or the company's board to implement a strategy or strategies that maximize returns for all shareholders.
Last quarter, Jeff Ubben (Trades, Portfolio) increased his holding in Agrium (AGU) by 25%. As of June 30, he held 10,003,451 million shares of the company. The following chart shows his holding history in the company.
Agrium is a major producer and retailer of fertilizer. The company's business spans the crop input value chain, as it produces and distributes nutrients, seed and crop protection products and services to farmers. Agrium's strategy is to invest and operate across the agricultural inputs value chain (fertilizer, crop protection and seed), through production, distribution and retail sales. This integrated strategy allows the company to generate both strategic and operational synergies.
In February, Agrium raised its target dividend payout ratio to 40% to 50% of free cash flow, and earlier this month it announced a 12% increase in its dividend (now $3.50 on an annualized basis). The company also plans to buy back up to 5% of its common shares over the next 12 months. According to the company's CEO, Chuck Magro, the company expects its free cash flow generation to increase significantly as it completes its major production capacity expansion projects for nitrogen and potash this year. According to him, the higher payout ratio strikes a balance between returning significant capital to shareholders, while maintaining Agrium's core assets and flexibility for growth.