Long-term oriented investors Donald Yacktman (Trades, Portfolio) and his team at the Yacktman Fund (Trades, Portfolio)s are happy to underperform the S&P 500 for a year, as long as they outperform over multi-year time periods and vigilantly manage risk. Last year, they came in at 27.2%, compared to the S&P 500’s 32.39%.
In the market’s meteoric rise, they also found few new compelling values. But they did continue to like the stocks they already added to the Yacktman Fund (Trades, Portfolio) (YACKX, Financial) portfolio in quarters past, particularly eBay (EBAY, Financial). The only new position added was a smidgeon of the S&P 500 ETF.
New Buys
SPDR S&P 500 ETF (SPY, Financial)
Yacktman purchased 1,870 shares of the S&P 500 ETF, representing a miniscule 0.0014% of the portfolio and making it the smallest position. The average price of the S&P in the fourth quarter was $177, and it has since risen by 4% to $185.
The last time Yacktman held the SPY was the fourth quarter of 2011, when they bought 14,375 shares around an average price of $123. They sold out in the next quarter at a decent gain when the price increased to $135.
SPDR S&P 500 ETF has a market cap of $139.02 billion, and a dividend yield of 2.0%. They price of the SPY has increased 122% over the past five years.
Yacktman Fund (Trades, Portfolio)s bought 8,259,107 shares of eBay, increasing the position by 479.6% to a 1.9% portfolio weight. eBay brought an average price of $53 during the fourth quarter. Yacktman has held the position since before 2009, but this marks their largest interest in the company yet. eBay’s share price has declined by 3% over the past year.
eBay is the online auction site that Carl Icahn (Trades, Portfolio) recently pushed to spin off its online payments business PayPal. eBay in January rejected Icahn’s proposal. The company is also undergoing a significant business shift to keep up with rapid changes in ecommerce. In a letter to shareholders as the end of 2012, the company said that in spite of heretofore strong results it was “not satisfied.”
“We believe that we are in the midst of an extraordinary period of innovation and have tremendous opportunities in front of us. Capitalizing on our opportunities and achieving our company’s full potential will require that we “take it to the next level” — the next level of relentless customer focus, the next level of innovation and delivering great end-to-end product experiences, and the next level of discipline and execution,” the company’s CEO John Donahoe said.
eBay Inc. has a market cap of $71.08 billion; its shares were traded at around $54.90 with a P/E ratio of 25.20 and P/S ratio of 4.50. eBay Inc. had an annual average earnings growth of 15.30% over the past 10 years. GuruFocus rated eBay Inc. the business predictability rank of 4-star.
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