Donald Yacktman defies Efficient Market Hypothesis for the past 1, 3, 5, and 10 years, and since inception of his The Yacktman Fund (July 6, 1992).
Performance
Through March 31, 2010, return of his The Yacktman Fund (YACKX) has been 82.91, 8.93, 8.49, 13.59, and 10.25 for the respective period, beating the S&P 500’s 49.77, -4.17, 1.92, -0.65, and 8.14% for the same periods. And he did this without subject his portfolio to excessive risk: during the market highs of 2007, he has an abnormally high level of cash. And during the past 12 months, as the market recovering from the lows of March 2009, he received weightings in cyclical positions which performed exceptionally well such as AmeriCredit, Liberty Interactive, eBay, and initiated or increased high quality securities such as PepsiCo, Clorox, Comcast, Johnson & Johnson, Pfizer, and Procter & Gamble.
Focus on High Quality Stocks
Yacktman was interviewed earlier today and offered his outlooks of the market. He thinks the market has bid up the prices for the stocks sensitive to economic recovery and he sees value in the high quality stocks.
Yacktman also offered the following perspective in his 1Q10 letter:
Asset Allocation
As of March 31, a good portion of Yackman’s assets were invested in the Consumer Goods (29.7%) and Consumer Services (32%), not much changed from the previous quality.
Top Purchasing for the quarter:
No. 1: C.R. Bard Inc. (BCR, Financial), Buy: 2.22% of the portfolio - Total: 834,701 Shares
C.R. Bard, Inc. is one of the worldwide leaders in developing, manufacturing, and supplying healthcare products that focus on Vascular, Urology, and Oncology Disease States. C.r. Bard Inc. has a market cap of $8.3 billion; its shares were traded at around $86.53 with a P/E ratio of 16.7 and P/S ratio of 3.28. The dividend yield of C.r. Bard Inc. stocks is 0.79%. C.r. Bard Inc. had an annual average earning growth of 14.8% over the past 10 years. GuruFocus rated C.r. Bard Inc. the business predictability rank of 4.5-star.
Yacktman initiated this position in the quarter.
No. 2: The CocaCola Company (KO, Financial), Add: 2.76% of the portfolio - Total: 4,993,360 Shares
The Coca-Cola Company is the world's largest beverage company and is the producer and marketer of soft drinks. The Cocacola Company has a market cap of $123.21 billion; its shares were traded at around $53.45 with a P/E ratio of 16.7 and P/S ratio of 3.98. The dividend yield of The Cocacola Company stocks is 3.29%. The Cocacola Company had an annual average earning growth of 8.9% over the past 10 years. GuruFocus rated The Cocacola Company the business predictability rank of 3.5-star.
No. 3: News Corp. (NWSA, Financial), Add: 2.67% of the portfolio - Total: 23,008,490 Shares
NEWS CORPORATION 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 $28.11 billion; its shares were traded at around $15.43 with a P/E ratio of 19.53 and P/S ratio of 0.92. The dividend yield of News Corp. stocks is 0.97%.
Yacktman bough over 6 million shares in the quarter.
PepsiCo, Inc. consists of: Frito-Lay Company, Pepsi-Cola Company, and Tropicana Products. Pepsico Inc. has a market cap of $107.79 billion; its shares were traded at around $65.22 with a P/E ratio of 17.35 and P/S ratio of 2.49. The dividend yield of Pepsico Inc. stocks is 2.76%. Pepsico Inc. had an annual average earning growth of 8.9% over the past 10 years. GuruFocus rated Pepsico Inc. the business predictability rank of 4-star.
Yacktman bought more than 11 million shares in the quarter.
No. 5: Sysco Corp. (SYY, Financial), Buy: 2.2% of the portfolio - Total: 2,429,374 Shares
Sysco Corporation is the largest North American distributor of food and food related products to the foodservice or `food-prepared-away-from-home` industry. Sysco Corp. has a market cap of $18.69 billion; its shares were traded at around $31.54 with a P/E ratio of 17.33 and P/S ratio of 0.51. The dividend yield of Sysco Corp. stocks is 3.17%. Sysco Corp. had an annual average earning growth of 10.4% over the past 10 years. GuruFocus rated Sysco Corp. the business predictability rank of 3.5-star.
Yacktman initiated this position in the first quarter.
Conclusion
Donald Yacktman continues to add position in the high quality US stocks during the first quarter of 2009.
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Performance
Through March 31, 2010, return of his The Yacktman Fund (YACKX) has been 82.91, 8.93, 8.49, 13.59, and 10.25 for the respective period, beating the S&P 500’s 49.77, -4.17, 1.92, -0.65, and 8.14% for the same periods. And he did this without subject his portfolio to excessive risk: during the market highs of 2007, he has an abnormally high level of cash. And during the past 12 months, as the market recovering from the lows of March 2009, he received weightings in cyclical positions which performed exceptionally well such as AmeriCredit, Liberty Interactive, eBay, and initiated or increased high quality securities such as PepsiCo, Clorox, Comcast, Johnson & Johnson, Pfizer, and Procter & Gamble.
Focus on High Quality Stocks
Yacktman was interviewed earlier today and offered his outlooks of the market. He thinks the market has bid up the prices for the stocks sensitive to economic recovery and he sees value in the high quality stocks.
Yacktman also offered the following perspective in his 1Q10 letter:
“It’s almost all about the price”
Identifying great companies is not especially difficult. Appraising the future prospects of a business and paying an appropriate price are far more critical to generating attractive returns and managing risk than just picking leaders.
In each fund, six of the top ten positions (News Corp, Coca-Cola, Microsoft, Viacom, Pfizer, and Comcast) today trade at price levels below their close at the end of 1999, even though each of the six businesses has grown its sales and earnings per share (in most cases substantially) in the last decade-plus. We did not own any of these six poorly performing stocks in either fund back in 1999, but have been happy to purchase and own them in the last few years at much more attractive prices. We like to buy quality merchandise when it is in the discount bin.
Asset Allocation
As of March 31, a good portion of Yackman’s assets were invested in the Consumer Goods (29.7%) and Consumer Services (32%), not much changed from the previous quality.
| Industry | 2009-12-31 | 2010-03-31 |
|---|---|---|
| Technology | 7.3% | 5.7% |
| Financials | 9.5% | 8.1% |
| Utilities | 0.1% | 0% |
| Telecommunications | 0% | 0% |
| Consumer Services | 30.8% | 32% |
| Health Care | 12.7% | 15% |
| Consumer Goods | 30.4% | 29.7% |
| Industrials | 1.5% | 2.3% |
| Oil & Gas | 5.6% | 5.7% |
Top Purchasing for the quarter:
No. 1: C.R. Bard Inc. (BCR, Financial), Buy: 2.22% of the portfolio - Total: 834,701 Shares
C.R. Bard, Inc. is one of the worldwide leaders in developing, manufacturing, and supplying healthcare products that focus on Vascular, Urology, and Oncology Disease States. C.r. Bard Inc. has a market cap of $8.3 billion; its shares were traded at around $86.53 with a P/E ratio of 16.7 and P/S ratio of 3.28. The dividend yield of C.r. Bard Inc. stocks is 0.79%. C.r. Bard Inc. had an annual average earning growth of 14.8% over the past 10 years. GuruFocus rated C.r. Bard Inc. the business predictability rank of 4.5-star.
Yacktman initiated this position in the quarter.
No. 2: The CocaCola Company (KO, Financial), Add: 2.76% of the portfolio - Total: 4,993,360 Shares
The Coca-Cola Company is the world's largest beverage company and is the producer and marketer of soft drinks. The Cocacola Company has a market cap of $123.21 billion; its shares were traded at around $53.45 with a P/E ratio of 16.7 and P/S ratio of 3.98. The dividend yield of The Cocacola Company stocks is 3.29%. The Cocacola Company had an annual average earning growth of 8.9% over the past 10 years. GuruFocus rated The Cocacola Company the business predictability rank of 3.5-star.
No. 3: News Corp. (NWSA, Financial), Add: 2.67% of the portfolio - Total: 23,008,490 Shares
NEWS CORPORATION 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 $28.11 billion; its shares were traded at around $15.43 with a P/E ratio of 19.53 and P/S ratio of 0.92. The dividend yield of News Corp. stocks is 0.97%.
Yacktman bough over 6 million shares in the quarter.
PepsiCo, Inc. consists of: Frito-Lay Company, Pepsi-Cola Company, and Tropicana Products. Pepsico Inc. has a market cap of $107.79 billion; its shares were traded at around $65.22 with a P/E ratio of 17.35 and P/S ratio of 2.49. The dividend yield of Pepsico Inc. stocks is 2.76%. Pepsico Inc. had an annual average earning growth of 8.9% over the past 10 years. GuruFocus rated Pepsico Inc. the business predictability rank of 4-star.
Yacktman bought more than 11 million shares in the quarter.
No. 5: Sysco Corp. (SYY, Financial), Buy: 2.2% of the portfolio - Total: 2,429,374 Shares
Sysco Corporation is the largest North American distributor of food and food related products to the foodservice or `food-prepared-away-from-home` industry. Sysco Corp. has a market cap of $18.69 billion; its shares were traded at around $31.54 with a P/E ratio of 17.33 and P/S ratio of 0.51. The dividend yield of Sysco Corp. stocks is 3.17%. Sysco Corp. had an annual average earning growth of 10.4% over the past 10 years. GuruFocus rated Sysco Corp. the business predictability rank of 3.5-star.
Yacktman initiated this position in the first quarter.
Conclusion
Donald Yacktman continues to add position in the high quality US stocks during the first quarter of 2009.
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