1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
The Science of Hitting
The Science of Hitting
Articles (407) 

Donald Yacktman - "Wouldn't Be Surprised" to See PepsiCo up 150% over 10 Years

February 09, 2012 | About:
Donald Yacktman, who runs the Yacktman Funds, has a stellar track record; in the past three, five, ten, and fifteen-year periods, the fund has beat more than 99% of its peers. To me, that says one thing: This is someone worth listening to.

On Thursday, Mr. Yacktman appeared on CNBC to talk about one of his top holdings, PepsiCo (NYSE:PEP). The company reported fourth-quarter results Thursday morning, made a few big announcements, including that they would cut 8,700 globally and increase marketing by $500-$600 million in 2012. Here are some of the highlights from his commentary:

On the drop in price today – “A long-term investor will be happy to see the opportunity to buy a great business at a lower price.”

Why the Yacktman Funds likes PEP – “We buy companies based on very long-term horizon times; we buy risk adjusted forward rates of return… this company has a great business model.”

Long term potential – “I wouldn't be surprised to see between the dividends and the price appreciation to make 150% over ten years."

At the price of roughly $64, that 150% is good for an annualized return of 9.6% per annum; if the price were to hit $60 a share, the return under the same 10-year price assumption would jump to 10.3% per annum.

About the author:

The Science of Hitting
I'm a value investor with a long term focus.

I think Charlie Munger has the right idea: "Patience followed by pretty aggressive conduct."

I run a fairly concentrated portfolio, with a handful of positions accounting for the majority of the total. From the perspective of a businessman, I believe this is sufficient diversification.

Rating: 4.5/5 (16 votes)


Please leave your comment:

GuruFocus Mobile App

User Generated Screeners

wilrose77Anderson Sales
smwhitQuality Stocks
ericskomarRule#1 Plus
Praveen ChawlaROA>Div
greeycapPiotroski Std. 1

Select portfolio(s):

  • Loading...

Why you are interested?

Your selection and notes will be stored in your portfolio.

Login to add portfolio
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)