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Yacktman Q2 2010 Letter

Donald Yacktman and the Yacktman Funds team recently released their shareholder letter for the second quarter. Yacktman discusses five top holdings and his current outlook.

Long Product Cycle, Short Repurchase Cycle

We like businesses that sell products in well-established, slowly changing markets like beverage, household products, personal care, and food. These “consumer staple” products typically sell at low price points and are consumed and repurchased frequently.

Category leaders like Coca-Cola in soft drinks or Tide in laundry detergents may continue their dominance for generations, making it easier to predict the future prospects of these businesses. We are extremely confident that Clorox will be the leader in bleach sales in 10 years, while we are less certain about who will be the dominant seller of cell phones even a few years from now.

Value of Recurring Revenues

The media companies we own are largely subscription businesses, which we also like. Comcast gets paid predictable monthly fees from its customers for providing cable television, internet, and telephone services. News Corp and Viacom receive recurring monthly fees for the cable content they provide to pay television providers. Even in a challenged economy, pay television is one of the last items to be cut by households.

Positions greater than 6% of Assets of The Yacktman Focused Fund and the Yacktman Fund:

PepsiCo (PEP)

News Corporation News Corporation (NEWS)

Coca-Cola (KO)

Clorox (CLX)

Pfizer (PFE)

Yacktman Q2 2010 Letter


About the author:

Jacob Wolinsky
My investment ideas have been inspired by many of value investors including Benjamin Graham, Charles Royce, John Neff, Joel Greenblatt, Peter Lynch, Seth Klarman,Martin Whitman and Bruce Greenwald. .I live with my wife and daughter in Monsey, NY. I can be contacted jacobwolinsky(AT)gmail.com and my blog is www.valuewalk.com

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Rating: 3.1/5 (18 votes)

Comments

Adib Motiwala
Adib Motiwala - 3 years ago
Keep them coming Jacob. These fund letters, interviews provide more learning and insights than listening to Mad Money or just earnings commentry.

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