Easily more than 25% of $9.7 billion worth of holdings belonging to Yacktman Asset Management (Trades, Portfolio) has been enriched by top growth stocks pouring in 10-year average annual earnings of 22%.
The holdings for Yacktman Asset Management bear names like IT services provider Cognizant Technology Solutions Corp. (CTSH, Financial). Cognizant is the management firm’s top growth position, gaining 21.9% in earnings before interest, taxes, depreciation and amortization, or EBITDA, over the last decade. Cognizant sat in 1.07% of the equity portfolio space as of filings on July 30.
Another top grower of the portfolio was Express Scripts Holding Co. (ESRX), which reported a 19.40% growth in EBITDA over a 10-year period. The pharmacy benefit manager was followed by Micro Focus International PLC (MFGP) at a growth rate of 19% a year over a 10-year period. Micro Focus is a United Kingdom-based provider of software solutions, including identity access.
Of a total of these roughly 20 high-growth companies, the Yacktman Fund monetizes on businesses that see earnings blast by 14%, 12%, 10%, 6% and more than 5%. The portfolio’s page on GuruFocus, which ranks top growers with stars based on a consistency of earnings, is smattered with golden stars, signifying their earnings power and future potential. Here's a spotlight on a handful of these top performers.
Infosys
Infosys (INFY, Financial) sits in about 1.08% equity portfolio space. The fund holds more than 5.88 million shares of the company, an investment that is valued at $104 million. The stock stood at just under $20 a share in Monday trading. The investment was initiated a year ago for the average share price of $14.99.
The stock in Monday afternoon trading was priced at $19.95 a share, down 1.94%. The GuruFocus median price-sales chart suggested it is trading below historical value.
The company traded at almost 19 times price-earnings, which is higher than 76% of its competitors. The median is 27 times. It traded at 18.80 times forward price-earnings, which is higher than 77% of its peers.
The earnings-growth pattern for the stock is 12.8% a year over 10 years, according to GuruFocus estimates.
The company reported net income of $2.5 billion and revenue of $10 billion in 2018. Both have enjoyed a steady and consistent climb over the years.
Anthem
Anthem Inc. (ANTM, Financial) appears in 1.87% of the equity portfolio. A total of more than 826,000 shares are included in the portfolio. Anthem has been a longtime stock, holding a presence since 2012. At the time, the purchase price was $58.78 a share. The stock sold on Monday at more than $234 a share. The total investment is worth more than $181 million. The estimated increase on the investment since the buy was 183%.
The price for the shares on Monday was $252.67 a share, up 1.28%. GuruFocus median price-sales chart showed the stock was priced above historical value.
Anthem stock traded at 15.39 times price-earnings, which is higher than 67 % of its peers in the health care plans industry. The median industry price-earnings is 19.79. The stock traded 16.18 times forward earnings, or lower than 54% of competitors.
The company reported an annual average 9.8% rate of earnings growth over the last decade.
Anthem reported $3.8 billion in net income and $90 billion in revenue in 2018, and has seen profits and sales climb steadily.
Other top growth stocks in the portfolio include the following:
Windows maker Microsoft (MSFT, Financial) appeared in 5.26% of the equity portfolio. More than 5.6 million shares were valued at more than $511 million. Shares were purchased at just over $30 a share. Shares stood at $105.25 a share, down 2.26% in Monday trading. The investment has gained about 90% since the buy of an initial 30 million shares in the first quarter of 2012. The stock has earned an annual average 5.8% a year over the last 10 years.
Cisco Systems Inc. (CSCO, Financial) has earned about 6.6% a year over the last 10 years in earnings growth. The equity portfolio reported 13 million shares in a space of 5.78%. The investment is valued at $561 million and has produced an estimated gain of 65% since the 2012 buy in the first quarter at an average share price of $19.75 a share. On Monday, shares traded at over $42 a share. The GuruFocus median sales-price chart indicated that it was trading below historical value.
