Pacer Advisors Bets on Uber’s Cash Flow Strength With $386 Million Buy

On Wednesday, Pacer Advisors disclosed a major buy of Uber (NYSE:UBER), adding 4.1 million shares in an estimated $386.6 million transaction.

What Happened

Pacer Advisors, Inc. reported a substantial increase in its holding of Uber (NYSE:UBER), according to its quarterly filing with the Securities and Exchange Commission released on Wednesday. The fund acquired an additional 4.1 million shares during the third quarter, bringing its total holding to almost 4.4 million shares valued at $426.2 million at quarter-end.

What Else to Know

The fund's purchase raised Uber to 1.07% of its 13F reportable assets as of the end of the third quarter.

Top holdings after the filing:

• NASDAQ:NVDA: $569.6 million (1.7% of AUM)
• NASDAQ:AMAT: $499.5 million (1.4% of AUM)
• NYSE:XOM: $489.9 million (1.4% of AUM)
• NYSE:NEM: $483.9 million (1.4% of AUM)
• NYSE:MO: $467.6 million (1.4% of AUM)

As of Thursday morning, Uber shares were priced at $93.54, up 14% over the past year and just shy of the S&P 500's nearly 15% gain over the same period.

Company Overview

Company Snapshot

• Uber provides ride-hailing, food and grocery delivery, and freight logistics services through its Mobility, Delivery, and Freight segments.
• It operates a platform-based business model, generating revenue by connecting consumers with independent service providers and charging transaction fees or commissions.
• The company serves individual consumers, restaurants, retailers, and businesses across the United States and international markets.

Uber is a global technology platform that facilitates transportation, delivery, and logistics services at scale. The company leverages a multi-segment strategy, integrating diverse offerings to drive revenue growth and operational efficiency.

Foolish Take

Pacer Advisors’ nearly $400 million bet on Uber stock comes amid growing institutional confidence in the company’s transformation from a growth story to a profitable platform business. Uber’s most recent quarterly results showed 18% revenue growth to $12.7 billion and $1.5 billion in operating income (which skyrocketed 82%), with CEO Dara Khosrowshahi highlighting “record audience, frequency, and profitability” across both the mobility and delivery segments. The company also approved a $20 billion share repurchase program, signaling management’s conviction in its long-term cash generation.

For Pacer, a rules-based ETF issuer known for its Cash Cows ETF Series and Trendpilot strategies, the move fits neatly into its focus on quality companies with durable free cash flow and operational efficiency. With flagship funds like COWZ and CALF screening for high free cash flow yield, Uber’s improving margins and record $8.5 billion in trailing 12-month free cash flow make it a good candidate for inclusion across its portfolios.

For long-term investors, the takeaway is clear: Uber has evolved into a mature cash-flow generator positioned for durable growth across mobility, delivery, and freight—traits increasingly sought after by ETF managers in a higher-rate environment.

Glossary

13F assets: Equity holdings reported by institutional investment managers to the SEC on Form 13F, showing large U.S. stock positions.
Reportable assets: Assets that must be disclosed in regulatory filings, such as those required by the SEC for transparency.
Quarterly filing: A report submitted by companies or funds every three months, detailing financial and investment information.
Fund: A pooled investment vehicle, such as a mutual fund or ETF, managed by professionals on behalf of investors.
Transaction: The act of buying or selling securities or other financial assets.
Position: The amount of a particular security or asset held by an investor or fund.
Stake: The ownership interest or share held in a company by an investor or fund.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.
Platform-based business model: A business structure that connects buyers and sellers through a digital platform, earning fees or commissions.
Segments: Distinct business divisions within a company, often based on product lines or services.
AUM (Assets Under Management): The total market value of assets that an investment manager or fund oversees on behalf of clients.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Applied Materials, Nvidia, and Uber Technologies. The Motley Fool has a disclosure policy.