Donald´S Yacktman´s Yacktman Asset Management is a boutique investment advisory firm, which was founded in 1992 by Mr. Yacktman and is located in Austin, Texas. The investment philosophy is based on a disciplined investment strategy, which tries to be successful and consistent, while having a long-term orientation.
The fund recently disclosed an equity portfolio valued at some $24.12 billion as of the end of March 2015. The equity portfolio is mainly invested in Consumer Staples (40%), Information Technology (21%), and Consumer Discretionary (15%) stocks.
The three largest holdings are represented by large-cap companies. These companies are Pepsico, Inc. (PEP, Financial), The Procter & Gamble Company (PG, Financial) and The Coca-Cola Company (KO, Financial).
As of the end of the quarter, Pepsico, Inc. (PEP, Financial) represents Yacktman’s largest holding in terms of value. The fund held 25.48 million shares of the company valued at $2.44 billion. The position represents 11.23% of the equity portfolio and decreased over the quarter by 5%. However, the stock was up by 1.12% in that time-frame.
The global food and beverage company has 22 brands that generate more than $1 billion each in annual sales. Analyzing quarter results, revenues declined by 3.22% to $12.22 billion, mainly hit by the evolution of the dollar and weakness in emerging markets. Nonetheless, earnings per share increased in the first quarter compared to the same quarter a year ago ($0.81 vs $0.79). The net income increased by 0.4% when compared to the same quarter one year prior, to $1.221 from $1.216 billion. The gross profit margin is considered very high, at about 59.38% and it has increased from the same quarter the previous year. Finally, the ROE for the quarter was 41.06% which doubled the industry median and it has increased by 36% from the first quarter of fiscal 2014.
Several investors reported long positions in the stock at the end of the first quarter, including Ken Fisher (Trades, Portfolio)’s Fisher Asset Management, which owned 5.12 million shares.
The Procter & Gamble Company (PG, Financial) comes in next on the list with Yacktman Asset Management holding 28.54 million shares, almost flat over the quarter; the value of the stake amounts to $2.34 billion, according to the latest 13F filing. The stock depreciated by 2% during 2014 and 10% in the three month period.
Last week the company reported third quarter results and they were not good. Revenues declined by 7.64% while EPS dropped by 2.30%. These disappointing numbers made Societe Generale downgraded the stock to ‘Hold’ from ‘Buy’ and lowered its price target to $86.00 from $96.00, while B. Riley has reiterated the “Neutral” rating but with a price target of $81.00. The stock is currently trading at approximately that level. Among other investors, Ken Fisher (Trades, Portfolio) disclosed holding 7.65 million shares of the company, the value of the stake amounting to $626.8 million as of the end of the first quarter.
Finally, The Coca-Cola Company (KO, Financial), in which the fund disclosed holding 38.93 million shares, down by 5% on the quarter, with the value of the stake amounting to $1.58 billion. The stock lost almost 4% in the first quarter of 2015, showing in some way the recent declined in consumption in the U.S. and also in outside markets, but Coca-Cola is still the world’s leading beverage manufacturer. Warren Buffet’s Berkshire Hathaway reported holding 400 million shares of Coca-Cola, valued at $16.89 billion as of the end of 2014.
Disclosure: Omar Venerio holds no position in any stocks mentioned