The Yacktman Fund (Trades, Portfolio), part of Austin, Texas-based Yacktman Asset Management (Trades, Portfolio), disclosed this week that its top five trades during the fourth quarter of 2020 included new positions in Charles Schwab Corp. SCHW and Tyson Foods Inc. TSN and three position reductions: Samsung Electronics Co. Ltd. XKRX:005935, Fox Corp. FOXAFOX and Walt Disney Co. DIS.
Managed by Stephen Yacktman and Jason Subotky, the fund seeks long-term capital appreciation by investing in stocks in which some, but not all, pay dividends. The fund managers look for three key characteristics of companies: good business, shareholder-oriented management and low purchase price.
As of the quarter-end, the fund's $6.33 billion equity portfolio contains 51 stocks, with two new positions and a turnover ratio of 5%. The top three sectors in terms of weight are consumer defensive, technology and communication services, representing 23.15%, 22.47% and 20.67% of the equity portfolio.
Charles Schwab
The fund purchased 1.825 million shares of Charles Schwab SCHW, giving the stake 1.53% weight in the equity portfolio. Shares averaged $45.56 during the fourth quarter of 2020; the stock is fairly valued based on last Friday's price-to-GF Value ratio of 1.09.
The San Francisco-based company provides brokerage, banking and asset management services. GuruFocus ranks the company's profitability 6 out of 10: Although the company has a 4.5-star business predictability rank, net margins are outperforming just over 73% of global competitors while returns on assets are underperforming more than half of industry peers.
Gurus with large holdings in Charles Schwab include Dodge & Cox, Al Gore (Trades, Portfolio)'s Generation Investment Management and Primecap Management.
Tyson Foods
The fund purchased 1.46 million shares of Tyson Foods TSN, giving the position 1.49% weight in the equity portfolio. Shares averaged $62.34 during the fourth quarter of 2020; the stock is modestly undervalued based on last Friday's price-to-GF Value ratio of 0.87.
GuruFocus ranks the Springdale, Arkansas-based chicken and beef producer's profitability 8 out of 10 on several positive investing signs, which include a four-star business predictability rank and an operating margin that has increased approximately 3.4% per year on average over the past five years.
The T Rowe Price Equity Income Fund (Trades, Portfolio) also has a holding in Tyson Foods.
Samsung
The fund sold 3.9 million shares of Samsung XKRX:005935, trimming the holding 25.49% and the equity portfolio 3.22%. Shares averaged 59,430.2 won ($53.77) during the fourth quarter of 2020.
GuruFocus ranks the South Korean electronics giant's financial strength 8 out of 10 on several positive investing signs, which include a strong Altman Z-score of 5.9, a safe Beneish M-score of -3 and interest coverage and debt ratios that are outperforming over 77% of global competitors.
Fox
The fund sold 2.1 million Class A shares of Fox FOXA, trimming the position by one-third and the equity portfolio 1.12%. Shares averaged $27.96 during the fourth quarter of 2020.
GuruFocus ranks the New York-based diversified media company's financial strength 5 out of 10: Although the company has a safe Beneish M-score of -2.73, debt ratios are underperforming over 60% of global competitors.
Disney
The fund sold 400,000 shares of Disney DIS, trimming the position by 25.81% and the equity portfolio 0.95%. Shares averaged $144.40 during the fourth quarter of 2020.
GuruFocus ranks the Burbank, California-based entertainment giant's profitability 7 out of 10 on the back of operating margins outperforming over 60% of global competitors.
Disclosure: No positions.
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