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Yacktman Funds Buys 2 New Stocks - Samsung, Aggreko

January 16, 2014 | About:
Holly LaFon

Holly LaFon

262 followers

Donald Yacktman (Trades, Portfolio) is founder of the Yacktman Funds, which has net assets of $13.9 billion. Fund managers have the following focus, according to the website:

“The Yacktman Fund (Trades, Portfolio) seeks long-term capital appreciation, and, to a lesser extent, current income. The Fund mainly invests in common stocks of United States companies of any size, some, but not all of which, pay dividends. Yacktman employs a disciplined investment strategy, buying growth companies at what it believes to be low prices. Yacktman believes this approach combines the best features of 'growth' and 'value' investing. When they purchase stocks they generally search for companies they believe to possess one or more of the following three attributes: (1) good business; (2) shareholder-oriented management; or (3) low purchase price.”

In the third quarter, the Yacktman Fund (Trades, Portfolio) purchased no new stocks, and their cash position went up slightly, as the market appreciated. Yacktman's fourth quarter portfolio, released today, shows two new stocks purchased during the quarter, both foreign-traded companies: Samsung Electronics Co. Ltd. (XKRX:005935) and Aggreko PLC (LSE:AGK).

The New Stocks

Samsung Electronics Co. Ltd. (XKRX:005935)

The Yacktman Fund (Trades, Portfolio)s purchased 13,100 shares of Samsung Electronics Co. Ltd., whose fourth quarter share price averaged 995,774 South Korean won. The holding occupies 0.12% of the Yacktman Focused Fund (Trades, Portfolio) portfolio.

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Samsung is a diverse South Korean electronics company composed of around 78 companies and affiliates, whose flagship company is Samsung Electronics. The company operates according to a guiding strategy called “Vision 2020” by which it plans to achieve $400 billion in revenue and become one of the top five brands in the world by 2020, and branch out into health, medicine and technology fields.

Samsung has a market cap of 170.28 trillion won, with a P/E ratio of 14.19. The dividend yield of Samsung Electronics Co Ltd stocks is 0.74%. Shares of Samsung trade on Thursday at 1,301,000 won a share, down 15% over the previous 12 months.

Samsung has a return on equity of 22.4%, and return on assets of 15.2%. In the past 12 months ended Sept. 30, 2013, Samsung reported the following per-share growth rates: 30.7% for revenue, 866.9% for EBITDA, 225.8% for free cash flow and 17.8% for book value.

The company’s 10-year revenue and earnings history:

1389904358816.png

The P/E ratio is 14.19 for Samsung.

Aggreko PLC (LSE:AGK)

Yacktman Fund (Trades, Portfolio)s also purchased 1,962,000 shares of Aggreko PLC, whose shares cost $16 on average for the fourth quarter. The holding occupies 0.51% of the portfolio.

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UK-based Aggreko offers temporary power and temperature control utility services. The company has a 4.58 billion pound market cap, and trades for 1,700.94 pence a share on Thursday, down 4.4% over the past year.

Aggreko has a P/E ratio of 16.80 and P/S ratio of 2.84. The dividend yield of Aggreko PLC stocks is 1.44%. Aggreko PLC had an annual average earnings growth of 26.10% over the past 10 years. GuruFocus rated Aggreko PLC the business predictability rank of 5-star

Aggreko also has a return on equity of 18.4 and return on assets of 9.6% as of June 2013. Growth rates for the company for the past five years on a per-share basis are 13.7% for revenue, 16.8% for EBITDA and 21.6% for book value.

The company’s 10-year revenue and earnings history:

1389905998890.png

For more Yacktman Focused Fund (Trades, Portfolio) trades, see the portfolio here. Not a Premium Member of GuruFocus? Try it free for 7 days here!


Rating: 2.8/5 (8 votes)

Comments

batbeer2
Batbeer2 premium member - 8 months ago

Thank you Holly!

Aggreko was on the Buffett-Munger screen in october and was picked for the monthly newsletter. Nice to see a guru buying. If there are questions about Aggreko, I would be happy to share what I know about this great company.

Some quotes form the Newsletter:

- Management has set a target to double the business again by 2019.

- Today, Aggreko is in better shape than it has ever been. The company has a fleet that is three times larger than it had in 2007 and on average, 6 months younger. Some of those generators have been converted to burn cheaper fuel.

- Aggreko recently acquired Companha Brasileira de Locacoes. The World cup and Olympics are coming to Brazil.

- This is a fast-growing, unregulated electric utility. A very rare business.

vgm
Vgm - 5 months ago

Hi Batbeer -- I think we both had an interest in AGK. It gets quite a bit of attention from value investors. I was interested to learn that FPA Funds hold it. It's the largest holding in their international fund. It was recently highlighted in Value Investor Insight. The price is still depressed:

http://ify.valuewalk.com/wp-content/uploads/2014/04/value-investor-uncovering-value-aggreko.pdf

batbeer2
Batbeer2 premium member - 5 months ago

I didn't know FPA holds it. They're smart; thanks for the link.

Rupert Soames is leaving though. I like the company less without him.

While I think it's a great company (as a Dutchman I'm a bit biassed) and I expect them to do well with or without Soames, I also think he deserves a lot of credit for bringing the company to where it is today.

Serco plc (where Soames is now going) is worth tracking. I'll be watching closely to see what strategy he's going to deploy there. For now, I think Serco is a mess. Soames can probably do a lot of good but I'm not smart enough to figure it out at this stage.

The only thing the two companies have in common is that they provide essential services when government can or will not. Both companies have a bit of the old-school IBM moat. As long as they do their job reasonably well, customers are unlikley to switch. The career risk for the guy making that decision is non-trivial. One interesting case of the two companies working "together" was the London Olympics.

vgm
Vgm - 5 months ago

Thanks, yes I did know Soames was leaving and agree he was a key figure. It's business model is well defined and seems robust, though.

Serco announced a rights offering today and the stock dropped another 15%. It's at a five-year low. If Soames can turn them around then you may be very right that they're worth watching. He starts May 1. I wonder if he knew of the rights offering in advance. Very bad start if not.

http://www.ibtimes.co.uk/serco-shares-plunge-18-rights-issue-winston-churchills-grandson-rupert-soames-joins-1446485

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