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Yacktman Focused Fund's Top Five Stocks

January 21, 2014 | About:
Monica Wolfe

Monica Wolfe

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The Yacktman Focused Fund seeks long-term capital appreciation and, to a lesser extent, current income. The fund is non-diversified, mainly investing in common stocks of U.S. companies of any size, some, but not all of which, pay dividends.  Over the past quarter the Yacktman Focused Fund (Trades, Portfolio) added three new stocks bringing the fund’s holdings to 38 stocks valued at $9.475 billion.

The following five companies represent the Yacktman Focused Fund (Trades, Portfolio)’s top five fourth quarter positions.

PepsiCo Inc (PEP)

Donald Yacktman (Trades, Portfolio)’s fund’s largest holding is in PepsiCo where they hold on to 13,825,000 shares of the company’s stock.  The fund position represents 12.1% of their total portfolio and 0.90% of the company’s shares outstanding.

Over the duration of the fourth quarter the portfolio managers added 20.74% to their holdings in the company. They purchased a total of 2,375,000 shares in the fourth quarter price range of $78.93 to $86.68 per share, with an estimated average quarterly price of $83.04.  Since their buys the price has dropped approximately -1%.

The Yacktman Focused Fund (Trades, Portfolio)’s historical holding history:

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PepsiCo is an American multinational food and beverage corporation with interests in the manufacturing, marketing and distribution of grain-based snack foods, beverages and other products.

PepsiCo’s historical revenue and net income:

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The analysis on Pepsi reports that the company’s revenue has slowed over the past year, the dividend yield is nearing a five-year low, its P/E ratio is at a one-year low and the company has issued $5.2 billion of debt over the past three years.

The Peter Lynch Chart suggests that the company is currently overvalued:

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PepsiCo has a market cap of $126.06 billion. Its shares are currently trading at around $82.20 with a P/E ratio of 19.30, a P/S ratio of 1.90 and a P/B ratio of 5.60. The company had an annual average earnings growth of 8.6% over the past 10 years.

GuruFocus rated PepsiCo the business predictability rank of 4.5-star.

Procter & Gamble (PG)

Focused Fund’s second largest position is in Procter & Gamble where they hold on to 10,640,000 shares of the company’s stock.  This position makes up for 9.1% of the fund’s total portfolio as well as for 0.39% of the company’s shares outstanding.

The fund did not alter their position in the fourth quarter.  They have not changed their holdings in Procter & Gamble since the second quarter of 2013.

Yacktman Focused Fund (Trades, Portfolio)’s holding history as of Q4:

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Procter & Gamble provides branded consumer packaged goods. The company's business units are aggregated into five reportable segments: Beauty, Grooming, Health Care, Fabric and Home Care and Baby Care and Family Care.

Procter & Gamble’s historical revenue and net income:

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The analysis on Procter & Gamble reports that the company’s revenue has slowed over the past year, its price is close to a 10-year high and they have issued $1.5 billion of debt over the past three years.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Procter & Gamble has a market cap of $217.13 billion. Its shares are currently trading at around $79.88 with a P/E ratio of 20.20, a P/S ratio of 2.80 and a P/B ratio of 3.20. The dividend yield of Procter & Gamble stocks is currently at 3.00%. The company had an annual average earnings growth of 4.30% over the past ten years.

Twenty-First Century Fox (FOXA)

The fund’s third largest holding goes to Twenty-First Century Fox where they hold on to 23,555,000 shares of the company’s stock. Their position in the company represents 8.7% of their total portfolio as well as 1.02% of the company’s shares outstanding.

Over the course of the third quarter the fund decreased their position -14.35% by selling a total of 3,945,000 shares.  The portfolio managers sold these shares in the fourth quarter price range of $32.20 to $35.17, with an estimated average quarterly price of $33.73. 

The fund’s historical holding history as of the fourth quarter:

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Twenty- First Century Fox is a diversified media and entertainment company. Its segments include Cable Network Programming, Television, Filmed Entertainment and Direct Broadcast Satellite Television.

Twenty-First Century’s historical revenue and net income:

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The analysis on Twenty-First Century Fox reports that the company’s revenue has been in decline over the past five years, its dividend yield is near a 5-yearh low and its price is at a 10-year high.

The Peter Lynch Chart suggests that the company is currently undervalued:

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Twenty-First Century Fox has a market cap of $72.74 billion. Its shares are currently trading at around $31.88 with a P/E ratio of 12.20, a P/S ratio of 2.80 and a P/B ratio of 4.30.

Coca-Cola (KO)

The Yacktman Focused Fund (Trades, Portfolio)’s fourth largest holding goes to Coca-Cola where it holds on to 19,400,000 shares of the company’s stock.  This position makes up for 8.5% of the fund’s total portfolio as well as 0.44% of the company’s shares outstanding.

Over the past quarter the fund upped their stake 14.12% by purchasing 2.4 million additional shares of the company’s stock.  They purchased these shares in the fourth quarter price range of $37.05 to $41.31, with an estimated average quarterly price of $39.44 per share.  Since then the price per share has dropped approximately -0.4%.

Historical holding history of Coca-Cola:

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Coca-Cola is a beverage company. It owns or license and market more than 500 nonalcoholic beverage brands, mainly sparkling beverages but also a variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks.

Coca-Cola’s historical revenue and net income:

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The analysis on Coca-Cola reports that the revenue has slowed over the past year, they have issued $14.4 billion of debt over the past three years and its P/S, P/B and P/E ratios are all trading at historical lows.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Coca-Cola has a market cap of $173.46 billion. Its shares are currently trading at around $39.28 with a P/E ratio of 20.40, a P/S ratio of 3.80 and a P/B ratio of 5.40. The company had an annual average earnings growth of 11.00% over the past ten years.

GuruFocus rated Coca-Cola the business predictability rank of 4.5-star.

Cisco Systems (CSCO)

The fund’s fifth largest holding is in Cisco where they maintain 24,936,000 shares of the company’s stock.  This position makes up for 5.9% of their total portfolio as well as 0.47% of the company’s shares outstanding.

During the third quarter the Focused Fund upped their position 26.9% by purchasing 24,936,000 shares. They bought these shares in the price range of $20.24 to $24.00 per share, with an estimated average quarterly price of $22.12 per share.  Since then the price per share has increased approximately 2.8%.

Yacktman’s historical holding history:

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Cisco Systems sells networking and communications products and provides related services. The company's two main products are switches and routers, but Cisco essentially touches everything in the networking industry. Cisco is the current leader in the data networking industry.

Cisco Systems’ historical revenue and net income:

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The analysis on Cisco reports that the company has shown predictable revenue and earnings growth, its dividend yield is nearing a 3-year high and the company has issued $939 million of debt over the past three years, but overall its debt level is acceptable.

The Peter Lynch Chart suggests that the company is currently undervalued:

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Cisco has a market cap of $121.58 billion. Its shares are currently trading at around $22.74 with a P/E ratio of 12.40, a P/S ratio of 2.50 and a P/B ratio of 2.10. The dividend yield of Cisco Systems stocks is at 3.00%. The company had an annual average earnings growth of 8% over the past ten years.

GuruFocus rated Cisco the business predictability rank of 3-star.

Check out the Yacktman Focused Fund’s entire fourth quarter portfolio here.

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