Yacktman Asset Management (Trades, Portfolio) disclosed in a regulatory filing that its top five trades during the third quarter included new positions in Devon Energy Corp. (DVN, Financial) and EOG Resources Inc. (EOG, Financial), a boost to its holding of ConocoPhillips (COP, Financial) and reductions to its investments in Sysco Corp. (SYY, Financial) and Coca-Cola Co. (KO, Financial).
The Austin, Texas-based firm seeks to invest in companies that offer an attractive rate of return for the level of risk in the investment. The firm’s management teams focus on qualitative and quantitative information and emphasize companies with good businesses, shareholder-oriented management and attractive valuations.
As of September, the firm’s $9.18 billion 13F equity portfolio contains 67 stocks with four new positions and a quarterly turnover ratio of 9%. The top four sectors in terms of weight are consumer defensive, energy, financial services and communication services, accounting for 19.18%, 18.99%, 13.86% and 13.62% of the equity portfolio.
Investors should be aware that 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Devon Energy
Yacktman purchased 2,664,927 shares of Devon Energy (DVN, Financial), giving the position 1.75% weight in its equity portfolio. Shares averaged $62.13 during the third quarter; the stock is significantly overvalued based on its price-to-GF Value ratio of 1.41 as of Monday.
The Oklahoma City-based energy exploration and production company has a GF Score of 59 out of 100 based on a rank of 6 out of 10 for financial strength and momentum, a profitability rank of 5 out of 10, a growth rank of 2 out of 10 and a GF Value rank of 1 out of 10.
Devon Energy’s financial strength ranks 6 out of 10 on the back of a high Altman Z-score of 4.47 and a high Piotroski F-score of 8 out of 9 despite cash-to-debt and debt-to-equity ratios underperforming more than 60% of global competitors.
Other gurus with holdings in Devon Energy include Ken Fisher (Trades, Portfolio)’s Fisher Investments and Steven Cohen (Trades, Portfolio)’s Point72 Asset Management.
EOG Resources
The firm purchased 1,435,030 shares of EOG Resources (EOG, Financial), giving the position 1.75% equity portfolio weight. Shares averaged $112.22 during the third quarter; the stock is modestly overvalued based on its price-to-GF Value ratio of 1.28 as of Monday.
The Houston-based energy company has a GF Score of 78 out of 100 based on a rank of 8 out of 10 for profitability, growth and financial strength despite momentum ranking just 6 out of 10 and GF Value ranking just 1 out of 10.
EOG Resources’ financial strength ranks 8 out of 10 on several positive investing signs, which include a high Altman Z-score of 5.17, a high Piotroski F-score of 7 out of 9 and a debt-to-equity ratio that outperforms more than 66% of global competitors.
ConocoPhillips
The firm added 1,498,720 shares of ConocoPhillips (COP, Financial), expanding the position by 559.12% and its equity portfolio by 1.67%.
Shares of ConocoPhillips averaged $99.75 during the third quarter; the stock is modestly overvalued based on its price-to-GF Value ratio of 1.19 as of Monday.
The Houston-based energy exploration and production company has a GF Score of 75 out of 100 based on a rank of 7 out of 10 for profitability, growth and financial strength despite GF Value and momentum ranking just 3 out of 10.
ConocoPhillips’ profitability ranks 7 out of 10: Although the company’s returns on equity and returns on assets outperform more than 80% of global competitors, ConocoPhillips’ gross margin of 38.8% outperforms just over 59% of global energy companies.
Sysco
The firm sold 2,185,567 shares of Sysco (SYY, Financial), chopping 53.14% of the position and 1.92% of its equity portfolio.
Shares of Sysco averaged $83.28 during the third quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.85 as of Monday.
The Houston-based food service distribution company has a GF Score of 82 out of 100 based on a momentum rank of 9 out of 10, a profitability rank of 8 out of 10, a GF Value rank of 7 out of 10 and a rank of 5 out of 10 for growth and financial strength.
Sysco’s profitability ranks 8 out of 10 on the back of returns on equity and assets outperforming more than 77% of global competitors despite gross profit margins declining by approximately 1.2% per year on average over the past five years and underperforming more than 65% of global competitors.
Coca-Cola
The firm sold 2,897,741 shares of Coca-Cola (KO, Financial), slicing 52.47% of the position and 1.89% of its equity portfolio.
Shares of Coca-Cola averaged $62.15 during the third quarter; the stock is fairly valued based on its price-to-GF Value ratio of 0.92.
The Atlanta-based beverage giant has a GF Score of 81 out of 100 based on a momentum rank of 10 out of 10, a profitability rank of 8 out of 10, a GF Value rank of 6 out of 10 and a rank of 5 out of 10 for growth and financial strength.
Other gurus with holdings in Coca-Cola include Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) and Ray Dalio (Trades, Portfolio)'s Bridgewater Associates.
