(GuruFocus, December 18, 2008) Donald Yacktman recently had a 3Q09 update conference call. A rerun can be access on the firm’s website here. In the call, Don and his managers summarized where the funds have been and explained why they think there are still room to go up in the portfolio.
The firm had a large cash position going to the stock crash in 2008. It started to buy in to cyclical companies such as Americredit and some retailers in later 2008, and bought hard hit financials in early 2009. As the market recover, they rotated their portfolio into high quality large cap blue chips such as Coca-Cola and PepsiCo.
Yacktman was nominated by Morningstar as a candidate for “Fund Manager of the Decade” in the domestic category, joining the rank with Bruce Berkowitz, and Steve Romic. His fund returned an average of 12% for the decade, despite a general market that yielded negative return.
One of the take-away I got from the conference call is Yacktman’s attitude towards the economy and general market. He stated that it is fun to talk about it, but investing really bores down to the durability of cash flow of the companies one is investing in.
There was one question during the Q&A session on Comcast’s recent $30 billion acquisition of NBC. Yacktman’s team liked the deal and thought the deal is accretive to Comcast. They hold both content distribution companies and content providers. Here are his holdings in the space:
Yacktman’s Media Companies
A survey of these holdings:
News Corp. (NWS-A)
NEWS CORPORATION is a diversified entertainment company with operations in eight industry segments: filmed entertainment; television; cable network programming; direct broadcast satellite television; magazines and inserts; newspapers and information services; book publishing; and other. News Corp. has a market cap of $15.45 billion; its shares were traded at around $0 with a P/E ratio of 6.86 and P/S ratio of 0.47. The dividend yield of News Corp. stocks is 1.41%. News Corp. had an annual average earning growth of 17.2% over the past 5 years.
Yacktman added position in 3Q09.
Viacom Inc. (VIA-B)
Viacom is a leading global entertainment content company whose family of prominent and respected brands includes the multiplatform properties of MTV Networks, BET Networks, Paramount Pictures, Paramount Home Entertainment and DreamWorks. Viacom Inc. has a market cap of $16.59 billion; its shares were traded at around $29.91 with a P/E ratio of 12.5 and P/S ratio of 1.2.
Yacktman bought more shares in 3Q09.
Comcast Corp. Special (CMCSK, Financial)
Comcast Corporation's commerce and content businesses include majority ownership of QVC, Comcast-Spectacor, Comcast SportsNet, and The Golf Channel, a controlling interest in E! Networks, and other programming investments. Comcast Corp. Special has a market cap of $47.39 billion; its shares were traded at around $16.24 with and P/S ratio of 1.4. The dividend yield of Comcast Corp. Special stocks is 1.6%. Comcast Corp. Special had an annual average earning growth of 46.5% over the past 5 years.
Yacktman bought more shares in 3Q09.
Liberty Media Corp. Corporation(LINTA)
Liberty Media Corporation owns a broad range of electronic retailing, media, communications and entertainment businesses and investments. Its businesses include some of the world's most recognized and respected brands and companies, including QVC, Encore, Starz, IAC/InterActiveCorp, Expedia and News Corporation. Liberty Media Corp. Interactive Common S has a market cap of $5.82 billion; its shares were traded at around $10.27 with and P/S ratio of 0.9. Liberty Media Corp. Interactive Common S had an annual average earning growth of 20.8% over the past 5 years.
Yacktman sold a bit of his position in 3Q09.
DISH NETWORK CORPORATION (DISH, Financial)
DISH NETWORK CP offers satellite television products and services. The company operates three business units: The DISH Network - the direct broadcast satellite, subscription television service in the United States. EchoStar Technologies Corporation division, which is principally responsible for the design of digital set-top boxes, or satellite receivers, and the sale of set-top boxes to international operators. Satellite Services division provides video, audio and data services to business television customers and other satellite users. Dish Network Corporation Class A Common has a market cap of $9.38 billion; its shares were traded at around $21 with a P/E ratio of 12.4 and P/S ratio of 0.8.
Yacktman sold a bit of his holdings in the stock in 3Q09.
The Walt Disney Company Disney (DIS, Financial)
Walt Disney Company owns 100% of Disney Enterprises, Inc. which, together with its subsidiaries, is a diversified worldwide entertainment company with operations in five business segments: Media Networks, Studio Entertainment, Theme Parks and Resorts, Consumer Products and Internet and Direct Marketing. The Walt Disney Company Disney has a market cap of $59.55 billion; its shares were traded at around $31.93 with a P/E ratio of 17.5 and P/S ratio of 1.6. The dividend yield of The Walt Disney Company Disney stocks is 1.1%. The Walt Disney Company Disney had an annual average earning growth of 4.4% over the past 10 years.
Yacktman sold a bit of his shares in the company in 3Q09.
Conclusion
For Donald Yacktman, investing is to find the companies that offer safe, strong and repeatable cash flow at the right price. Recently he found them in the media companies.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and Donald Yacktman for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
The firm had a large cash position going to the stock crash in 2008. It started to buy in to cyclical companies such as Americredit and some retailers in later 2008, and bought hard hit financials in early 2009. As the market recover, they rotated their portfolio into high quality large cap blue chips such as Coca-Cola and PepsiCo.
Yacktman was nominated by Morningstar as a candidate for “Fund Manager of the Decade” in the domestic category, joining the rank with Bruce Berkowitz, and Steve Romic. His fund returned an average of 12% for the decade, despite a general market that yielded negative return.
One of the take-away I got from the conference call is Yacktman’s attitude towards the economy and general market. He stated that it is fun to talk about it, but investing really bores down to the durability of cash flow of the companies one is investing in.
There was one question during the Q&A session on Comcast’s recent $30 billion acquisition of NBC. Yacktman’s team liked the deal and thought the deal is accretive to Comcast. They hold both content distribution companies and content providers. Here are his holdings in the space:
Yacktman’s Media Companies
| Symbol | Company | Number of Shares | Value ($1000) | Weighting |
|---|---|---|---|---|
| NWS-A | News Corp. | 12,295,460 | 147,423 | 8.54 |
| VIA-B | Viacom Inc. | 4,617,556 | 129,476 | 7.5 |
| CMCSK | Comcast Corp. Special | 4,429,490 | 71,226 | 4.13 |
| LINTA | Liberty Media Corp. Interactive Common S | 5,556,411 | 60,954 | 3.53 |
| DISH | Dish Networks | 781,700 | 15,056 | 0.87 |
| DIS | The Walt Disney Company Disney | 300,000 | 8,238 | 0.48 |
| NWS | News Corp. | 80,000 | 1,119 | 0.06 |
| VIA | Viacom Inc. | 27,700 | 816 | 0.05 |
| Total | 434,308 | 25.16 |
A survey of these holdings:
News Corp. (NWS-A)
NEWS CORPORATION is a diversified entertainment company with operations in eight industry segments: filmed entertainment; television; cable network programming; direct broadcast satellite television; magazines and inserts; newspapers and information services; book publishing; and other. News Corp. has a market cap of $15.45 billion; its shares were traded at around $0 with a P/E ratio of 6.86 and P/S ratio of 0.47. The dividend yield of News Corp. stocks is 1.41%. News Corp. had an annual average earning growth of 17.2% over the past 5 years.
Yacktman added position in 3Q09.
Viacom Inc. (VIA-B)
Viacom is a leading global entertainment content company whose family of prominent and respected brands includes the multiplatform properties of MTV Networks, BET Networks, Paramount Pictures, Paramount Home Entertainment and DreamWorks. Viacom Inc. has a market cap of $16.59 billion; its shares were traded at around $29.91 with a P/E ratio of 12.5 and P/S ratio of 1.2.
Yacktman bought more shares in 3Q09.
Comcast Corp. Special (CMCSK, Financial)
Comcast Corporation's commerce and content businesses include majority ownership of QVC, Comcast-Spectacor, Comcast SportsNet, and The Golf Channel, a controlling interest in E! Networks, and other programming investments. Comcast Corp. Special has a market cap of $47.39 billion; its shares were traded at around $16.24 with and P/S ratio of 1.4. The dividend yield of Comcast Corp. Special stocks is 1.6%. Comcast Corp. Special had an annual average earning growth of 46.5% over the past 5 years.
Yacktman bought more shares in 3Q09.
Liberty Media Corp. Corporation(LINTA)
Liberty Media Corporation owns a broad range of electronic retailing, media, communications and entertainment businesses and investments. Its businesses include some of the world's most recognized and respected brands and companies, including QVC, Encore, Starz, IAC/InterActiveCorp, Expedia and News Corporation. Liberty Media Corp. Interactive Common S has a market cap of $5.82 billion; its shares were traded at around $10.27 with and P/S ratio of 0.9. Liberty Media Corp. Interactive Common S had an annual average earning growth of 20.8% over the past 5 years.
Yacktman sold a bit of his position in 3Q09.
DISH NETWORK CORPORATION (DISH, Financial)
DISH NETWORK CP offers satellite television products and services. The company operates three business units: The DISH Network - the direct broadcast satellite, subscription television service in the United States. EchoStar Technologies Corporation division, which is principally responsible for the design of digital set-top boxes, or satellite receivers, and the sale of set-top boxes to international operators. Satellite Services division provides video, audio and data services to business television customers and other satellite users. Dish Network Corporation Class A Common has a market cap of $9.38 billion; its shares were traded at around $21 with a P/E ratio of 12.4 and P/S ratio of 0.8.
Yacktman sold a bit of his holdings in the stock in 3Q09.
The Walt Disney Company Disney (DIS, Financial)
Walt Disney Company owns 100% of Disney Enterprises, Inc. which, together with its subsidiaries, is a diversified worldwide entertainment company with operations in five business segments: Media Networks, Studio Entertainment, Theme Parks and Resorts, Consumer Products and Internet and Direct Marketing. The Walt Disney Company Disney has a market cap of $59.55 billion; its shares were traded at around $31.93 with a P/E ratio of 17.5 and P/S ratio of 1.6. The dividend yield of The Walt Disney Company Disney stocks is 1.1%. The Walt Disney Company Disney had an annual average earning growth of 4.4% over the past 10 years.
Yacktman sold a bit of his shares in the company in 3Q09.
Conclusion
For Donald Yacktman, investing is to find the companies that offer safe, strong and repeatable cash flow at the right price. Recently he found them in the media companies.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and Donald Yacktman for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
