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James Li
James Li
Articles (1390)  | Author's Website |

Yacktman Focused Fund's Top 4 Trades in the 3rd Quarter

Texas-based fund's newest holding is in South Korean auto parts company

The Yacktman Focused Fund (Trades, Portfolio) disclosed this week that its top four trades during the third quarter included a new buy in Hyundai Mobis Co. Ltd. (XKRX:012330) and sells in the following three companies: Samsung Electronics Co. Ltd. (XKRX:005935), Continental AG (XTER:CON) and Oracle Corp. (NYSE:ORCL).

Managed by Stephen Yacktman and Jason Subotky, the Austin, Texas-based fund seeks long-term growth appreciation through a disciplined, growth-oriented investing approach. The fund looks for good businesses with high returns on tangible assets, shareholder-oriented management and low valuations.

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As of the quarter-end, the fund's $2.42 billion equity portfolio contained 47 stocks, with a turnover ratio of 2%. The top three sectors in terms of weight are technology, communication services and consumer defensive, representing 25.67%, 22.31% and 22.08% of the equity portfolio.

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Hyundai Mobis

The fund purchased 200,000 shares of Hyundai Mobis, giving the position 1.62% weight in the equity portfolio. Shares averaged 219,114 won ($191.28) during the third quarter; the stock is fairly valued based on its current price-to-GF Value ratio of 1.

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GuruFocus ranks the South Korean auto parts manufacturer's financial strength 8 out of 10 on several positive investing signs, which include a strong Altman Z-score of 3.1 and debt ratios that are outperforming over 82% of global competitors.

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Hyundai Mobis' profitability ranks 7 out of 10 on the back of profit margins and returns outperforming approximately 70% of global competitors.

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Gurus with holdings in Hyundai Mobis include the Yacktman Fund (Trades, Portfolio), the Tweedy Browne (Trades, Portfolio) Global Value Fund and Charles de Vaulx (Trades, Portfolio).

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Samsung

The fund sold 900,000 shares of Samsung, trimming the stake 8.65% and the equity portfolio 1.49%. Shares averaged 49,042.40 won ($42.82) during the third quarter.

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GuruFocus ranks the South Korean electronics company's financial strength and profitability 8 out of 10 on several positive investing signs, which include interest coverage ratios, debt ratios and profit margins outperforming over 80% of global competitors.

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Despite high financial strength and profitability, Samsung has a modestly overvalued stock based on a current price-to-GF Value ratio of 1.27.

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Continental

The fund sold 335,621 shares of Continental, trimming the position 38.58% and the equity portfolio 1.40%. Shares averaged 89.32 euros ($104.59) during the third quarter; the stock is modestly undervalued based on its current price-to-GF Value of 0.84.

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GuruFocus ranks the German auto parts manufacturer's profitability 7 out of 10 on the back of operating margins outperforming 63.32% of global competitors despite returns underperforming over 86% of global vehicles and parts companies.

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Oracle

The fund sold 280,000 shares of Oracle, trimming the holding 52.83% and the equity portfolio 0.66%. Shares averaged $56.78 during the third quarter; the stock is fairly valued based on its current price-to-GF Value ratio of 0.97.

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GuruFocus ranks the Redwood City, California-based software company's profitability 9 out of 10, driven by a high Piotroski F-score of 8, a 4.5-star business predictability rank and profit margins that are outperforming over 96% of global competitors.

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Disclosure: No positions.

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About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


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