Yacktman Fund (Trades, Portfolio) managers Stephen Yacktman and Jason Subotky disclosed on Monday that they trimmed their holdings of Twenty-First Century Fox Inc. (FOXA, Financial), Cisco Systems Inc. (CSCO, Financial) and Sysco Corp. (SYY, Financial) during the second quarter.
Twenty-First Century Fox
Yacktman and Subotky sold 15.7 million shares of Twenty-First Century Fox for an average price of $39.52 per share. The fund managers pared 9.4% of their portfolio with this transaction.
Fox announced on July 13 that the U.K. Secretary of State for Digital, Culture, Media and Sport approved the company’s merger with Sky PLC (LSE:SKY, Financial) subject to a few “undertakings,” including the separation of the Sky News business into a separate company and the transfer of the new company’s shares to Walt Disney Co. (DIS, Financial). The company also mentioned that if Fox fails to close the merger with Sky, Disney will “indirectly” acquire Fox’s 39% interest in Sky.
GuruFocus ranks Fox’s profitability 7 out of 10 as the company’s operating margin, return on equity and Joel Greenblatt (Trades, Portfolio) return on capital outperform over 85% of global competitors. Despite this, the website also warns Fox’s revenue has decelerated over the trailing 12 months and that the company has issued $1 billion of long-term debt over the past three years, a significantly high amount.
Among the gurus with positions in Fox, Baupost Group manager Seth Klarman (Trades, Portfolio) has the third-largest stake with 26,588,731 shares.
Samsung
The fund managers disclosed a holding of 11,470,989 preferred shares of Samsung Electronics Co. Ltd. (XKRX:005935, Financial).
According to GuruFocus’ industry overview pages, Samsung has a 17% industry weight for Asian computer hardware companies. The website ranks Samsung’s financial strength and profitability 8 out of 10 on several positive factors, including a strong Piotroski F-score of 8, robust interest coverage and operating margins that are near a 10-year high. Samsung’s profit margins and returns outperform over 90% of global competitors.
Cisco
Yacktman and Subotky sold 3.8 million shares of Cisco for an average price of $43.71 per share. The fund managers trimmed 2.66% of their portfolio with this transaction.
San Jose, California-based Cisco said on May 16 that revenues for the quarter ending April 28 increased 4% year over year on a stronger innovation pipeline, according to CEO Chuck Robbins. GuruFocus ranks Cisco’s profitability 7 out of 10 and business predictability 3.5 stars out of five as the company has consistent revenue growth and operating margins that outperform 94% of global competitors.
Sysco
Yacktman and Subotky sold 2.3 million shares of Sysco for an average price of $63.86 per share. With this transaction, the fund managers pared 2.25% of their portfolio.
Sysco distributes food and related products to the foodservice industry. Although the company’s profitability ranks 6 out of 10, Sysco’s price-sales ratio is near a 10-year high, suggesting moderate overvaluation. Additionally, GuruFocus warns that Sysco’s dividend yield is near a 10-year low and the company is issuing long-term debt.
See also
The fund’s top10 holdings as of June 30 include Warren Buffett (Trades, Portfolio)’s Coca-Cola Co. (KO, Financial) and Bill Gates (Trades, Portfolio)’ Microsoft Corp. (MSFT, Financial). Proctor & Gamble Co. (PG, Financial) represents 11.94% of the portfolio, the largest holding.
Disclosure: No positions.
