For people who are not familiar with Yacktman’s achievements during the past two years and past decade, he made a double shift since 2007 and he is way ahead of where he was two years ago. He was holding high quality issues and some cash going into the downturn in 2007. Then during the market crash in late 2008 and early 2009, he bought into the economic sensitive issues such as Americredit and Liberty Media, and made good money out of these trades. As the market recovered in 2009, Yacktman gyrated into high quality again.
Now he is gradually building up a cash position (about 12%) again, mostly through new money invested by investors, and also because he is having hard time to find values. Now that Yacktman is making headlines because Morningstar has nominated him as the Money Manager of the Decade for domestic funds. Fame is bringing its new investors and new money, and the Investment Guru has the sanity to take it easy when the market does not present a lot of opportunities.
Yacktman is a bottom up investor. He looks for bargains in any kind of market rather than looking for returns from the macro market.
Short term, Yacktman doesn’t see market tank in December. January will tell the tale.
In the interview, Yacktman discussed one of his top holdings, The CocaCola Company (NYSE:KO), which is up about 30% YTD. He highlighted how he takes long term view of companies. Essentially he buys a stock and the market closes for five years, he will still be happy with the stocks. He views KO as a AAA bond and has good relative forward yield.
Here are the other top holdings of Yacktman as of September 30, 2009:
No. 1: News Corp. (NWS-A), Weightings: 8.54% - 12,295,460 Shares
News Corp. is a diversified entertainment company with operations in eight industry segments: filmed entertainment; television; cable network programming; direct broadcast satellite television; magazines and inserts; newspapers and information services; book publishing; and other. News Corp. has a market cap of $15.45 billion; its shares were traded at around $0 with a P/E ratio of 6.86 and P/S ratio of 0.47. The dividend yield of News Corp. stocks is 1.41%. News Corp. had an annual average earning growth of 17.2% over the past 5 years.
Yacktman bought more shares in News Corp. in 3Q09.
No. 2: The CocaCola Company (NYSE:KO), Weightings: 8.08% - 2,595,595 Shares
The Coca-Cola Company is the world's largest beverage company and is the leading producer and marketer of soft drinks. The Cocacola Company has a market cap of $135.74 billion; its shares were traded at around $58.58 with a P/E ratio of 19.2 and P/S ratio of 4.3. The dividend yield of The Cocacola Company stocks is 2.8%. The Cocacola Company had an annual average earning growth of 5.3% over the past 10 years. GuruFocus rated The Cocacola Company the business predictability rank of 2.5-star.
Yacktman bought more shares in KO in 3Q09.
No. 3: PepsiCo Inc. (NYSE:PEP), Weightings: 7.68% - 2,259,515 Shares
PepsiCo, Inc. consists of: Frito-Lay Company, Pepsi-Cola Company, and Tropicana Products. Pepsico Inc. has a market cap of $96.5 billion; its shares were traded at around $61.84 with a P/E ratio of 16.7 and P/S ratio of 2.2. The dividend yield of Pepsico Inc. stocks is 2.9%. Pepsico Inc. had an annual average earning growth of 8.4% over the past 10 years. GuruFocus rated Pepsico Inc. the business predictability rank of 2.5-star.
Yacktmand bought more shares in PEP during 3Q09.
No. 4: Viacom Inc. (VIA-B), Weightings: 7.5% - 4,617,556 Shares
Viacom is a leading global entertainment content company whose family of prominent and respected brands includes the multiplatform properties of MTV Networks, BET Networks, Paramount Pictures, Paramount Home Entertainment and DreamWorks. Viacom Inc. has a market cap of $17.11 billion; its shares were traded at around $30.84 with a P/E ratio of 12.8 and P/S ratio of 1.2.
Yacktman bought more shares in 3Q09.
No. 5: Microsoft Corp. (NASDAQ:MSFT), Weightings: 6.98% - 4,655,175 Shares
Microsoft develops, manufactures, licenses, and supports a wide range of software products for a multitude of computing devices. Microsoft Corp. has a market cap of $265.22 billion; its shares were traded at around $29.87 with a P/E ratio of 18.5 and P/S ratio of 4.5. The dividend yield of Microsoft Corp. stocks is 1.7%. Microsoft Corp. had an annual average earning growth of 10% over the past 10 years.
Yacktman bought more shares in MSFT in 3Q09.
No. 6: Pfizer Inc (NYSE:PFE), Weightings: 6.27% - 6,536,150 Shares
Pfizer Inc is a research-based, global pharmaceutical company. Pfizer Inc has a market cap of $147.83 billion; its shares were traded at around $18.32 with a P/E ratio of 8.4 and P/S ratio of 3.1. The dividend yield of Pfizer Inc stocks is 3.5%. Pfizer Inc had an annual average earning growth of 11% over the past 10 years.
Yacktman bought more shares in PFE in 3Q09.
Yacktman bought more of top quality stocks during 3Q09. For now, he is having trouble to find bargains.
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About the author:
My name is Ben C. and I am 2nd year MBA candidate at the Anderson School of Business at the University of California- Los Angeles. I have a BS in Economics from the Wharton School of Business at the University of Pennsylvania. Before coming to Anderson I worked as a generalist equity research analyst for Right Wall Capital, a long-short equity hedge fund located in New York City. Prior to working at Right Wall I worked as an analyst at Blue Ram Capital, another long-short equity hedge fund located in Rye Brook, NY. This past summer, I worked for West Coast Asset Management as a research analyst. West Coast, which was co-founded by Kinko’s founder Paul Orfalea, is run by well-known value investors Lance Helfert and Atticus Lowe.