ValueAct Capital sees significant upside to its portfolio holdings — much more potential upside than usual. In ValueAct's Q1 2025 letter to investors, which was obtained by Hedge Fund Alpha, the firm reported that the gap between the weighted average return of its holdings’ prices and its price targets for those holdings now exceeds 30%.
Although the ValueAct team expects a recession triggered by a trade war to negatively impact their companies, they predict a demand shock that would be “overwhelmed in time by mega trends and improved unit economics.” Thus, they expressed high confidence in “latent earnings power” that hasn’t yet appeared in their companies’ financial results.
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ValueAct continues to...
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