Yacktman Focused Fund Sells More Than Buys in Second Quarter

Jul 16, 2015

The Yacktman Focused Fund (Trades, Portfolio) pursues growth companies at low prices when it looks for investment targets. It’s a strategy that has worked pretty well, producing returns of 10.67% in 2014, 27.01% in 2013 and 10.57% in 2012. But the Fund was focused on selling stock in the second quarter.

More than three-fourths of the Yacktman Focused Fund (Trades, Portfolio)’s second-quarter transactions involved reductions of existing stakes, with the most significant being the sale of 6,600,000 shares of Coca-Cola (KO, Financial), the Atlanta-based beverage company, for an average price of $40.67 per share. The sale had a -3.17% impact on the Fund’s portfolio.

The Yacktman Focused Fund (Trades, Portfolio) also reduced its stake in Coca-Cola’s leading competitor and the Fund’s second-most valuable holding, PepsiCo Inc (PEP, Financial), a New York-based food and beverage company. The Yacktman Focused Fund (Trades, Portfolio) sold 1,750,000 shares for an average price of $95.56 per share. That deal had a -1.98% impact on the Fund’s portfolio.

The Fund also sold 2,953,500 shares of its fourth-most valuable stake, Oracle Corporation (ORCL, Financial), a California-based computer technology company, for an average price of $43.37 per share. The sale had a -1.51% impact on the Fund’s portfolio.

The Fund sold 3,800,000 shares of its eighth-most valuable stake, Cisco Systems Inc (CSCO, Financial), a San Jose, California-based technology company that designs, makes and sells networking equipment, for an average price of $28.66 per share. The sale had a -1.24% impact on the Fund’s portfolio.

The Fund also reduced its stakes in Microsoft Corp (MSFT, Financial), Stryker Corporation (SYK, Financial), eBay Inc (EBAY, Financial), Exxon Mobil Corporation (XOM, Financial), Johnson & Johnson (JNJ, Financial), CR Bard Inc (BCR, Financial), U.S. Bancorp (USB, Financial), CH Robinson Worldwide Inc (CHRW), Bank of New York Mellon Corp (BK), State Street Corp (STT), ConocoPhillips (COP) and Aggreko PLC (LSE:AGK).

The Fund sold out three stakes – Anthem Inc (ANTM), Walmart Stores Inc (WMT) and Clorox Co (CLX).

The Fund sold its 950,000-share stake in Anthem, an Indianapolis-based for-profit managed health care company, for an average price of $159.77 per share. The deal had a -1.74% impact on the Fund’s portfolio.

The Fund sold its 1,000,000 shares of Walmart for an average price of $76.49 per share. The deal had a -0.97% impact on the Fund’s portfolio.

The Fund added to two of its stakes in the second quarter – Sysco Corp (SYY) and Avon Products Inc (AVP).

The Fund acquired 1,900,000 shares of Sysco, a Houston-based food marketer and distributor, for an average price of $37.41 per share. The transaction had a 0.99% impact on the Fund’s portfolio.

Sysco, the Fund’s third-most valuable stake, has a market cap of $21.42 billion and an enterprise value of $24.05 billion. It has a P/E of 24.5, a Price/Book of 4.1 and a Price/Sales of 0.4. Donald Yacktman (Trades, Portfolio), Yacktman Fund (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio), James Barrow (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Jim Simons (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Manning & Napier Advisors, Inc, Paul Tudor Jones (Trades, Portfolio), Mark Hillman (Trades, Portfolio), Meridian Funds (Trades, Portfolio) and Bill Frels (Trades, Portfolio) have shares of Sysco in their portfolios.

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