During the quarter, Samsung (XKRX:005930)’s shares contributed solidly to Fund results even though the company’s Note7 was terminated, resulting in one of the worst product failures in history. The stock was resilient because Samsung’s semiconductor and display businesses delivered strong profit growth.
During the fourth quarter, Samsung announced improved cash returns to shareholders via an increased dividend and significant new share repurchase plan. Management also announced it is studying the corporate structure of the business and will consider an ADR listing. We think either or both of these events would propel the stock significantly higher. Even without corporate restructuring, Samsung looks like it could achieve strong growth in 2017. The shares are incredibly inexpensive and trade at a substantial discount to any of the company’s global peers.
From Yacktman Focused Fund (Trades, Portfolio) fourth quarter 2016 commentary.
