The Yacktman Focused Fund (Trades, Portfolio), founded by renowned investor Donald Yacktman (Trades, Portfolio), released its portfolio for the fourth quarter this week, disclosing it reduced eight positions.
Managed by Stephen Yacktman and Jason Subotky, the fund seeks investments that will generate long-term capital appreciation and current income. The current portfolio of 21 stocks is largely composed of securities in the consumer defensive sector. According to the fund’s fact sheet, it slightly underperformed the S&P 500 in 2017 with a return of 20.03%.
The fund’s three largest reductions for the quarter were in Samsung Electronics Co. Ltd. (XKRX:005935, Financial), Microsoft Corp. (MSFT, Financial) and Sysco Corp. (SYY, Financial).
Samsung
The fund sold 66,530 shares of Samsung for an average price of 2,141,310 won ($2,012.83) per share, impacting the portfolio by -3.74%.
The South Korean electronics manufacturer has a market cap of 334.84 trillion won; its shares were trading around 2,040,000 won on Tuesday with a price-earnings (P/E) ratio of 9.58, a price-book (P/B) ratio of 1.68 and a price-sales (P/S) ratio of 1.52.
The Peter Lynch chart below suggests the stock is undervalued as it is trading below its fair value.
GuruFocus ranks Samsung’s financial strength 8 of 10 and its profitability and growth 8 of 10. The company’s trailing dividend yield is 1.03% and its forward dividend yield is 2.38%. The dividend payout ratio is 19%.
Samsung remains the fund’s third-largest holding with a portfolio weight of 11.51%. GuruFocus estimates the fund has gained 80% on its investment since the fourth quarter of 2013. Other guru shareholders include the Yacktman Fund (Trades, Portfolio), Francisco GarcĂ Âa ParamĂ©s (Trades, Portfolio), Bestinfond (Trades, Portfolio) and Value Partners (Trades, Portfolio).
Microsoft
The Focused Fund divested of 600,000 shares of Microsoft for an average price of $82 per share. The trade had an impact of -1.39% on the portfolio.
The California-based software company has a market cap of $694.39 billion; its shares were trading around $90.01 on Wednesday with a P/E ratio of 30.51, a P/B ratio of 7.74 and a P/S ratio of 7.48.
According to the Peter Lynch chart below, the stock is overpriced as it is trading above its fair value.
GuruFocus ranks Microsoft’s financial strength 6 of 10 and its profitability and growth 8 of 10. The company’s trailing dividend yield is 1.81% and its forward dividend yield is 1.88%. The dividend payout ratio is 55%.
Microsoft remains the fund’s 10th-largest holding with a weight of 3.91%. GuruFocus estimates the fund has gained 90% on its investment since the first quarter of 2013. Other guru shareholders include PRIMECAP Management (Trades, Portfolio), Dodge & Cox, First Eagle Investment (Trades, Portfolio), Pioneer Investments (Trades, Portfolio) and Ken Fisher (Trades, Portfolio).
Sysco
Subotky and Yacktman reduced the Sysco position by 650,000 shares, impacting the portfolio by -1.09%. Shares traded for an average price of $56.65 during the quarter.
The Texas-based food distributor has a market cap of $32.46 billion; its shares were trading around $62.3 on Wednesday with a P/E ratio of 28.44, a P/B ratio of 14.57 and a P/S ratio of 0.61.
Based on the Peter Lynch chart below, the stock is overpriced as it is trading above its fair value.
GuruFocus ranks Sysco’s financial strength 5 of 10 and its profitability and growth 7 of 10. The company’s trailing dividend yield is 2.17% and its forward dividend yield is 2.35%. The dividend payout ratio is 60%.
Sysco has a portfolio weight of 3.52%. GuruFocus estimates the fund has gained 38% on the investment since the first quarter of 2013. Other guru shareholders are Jim Simons (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio).
Other trades
The portfolio managers also curbed the fund's holdings in Cisco Systems Inc. (CSCO, Financial), Johnson & Johnson (JNJ, Financial), ConocoPhillips (COP, Financial), Coco-Cola Corp. (KO, Financial) and US Bancorp (USB, Financial) during the quarter.
Disclosure: I do not own any stocks mentioned.
