"Tracking Yacktman Asset Management Portfolio – Q4 2019 Update"
"Yacktman's 13F equity portfolio value decreased from $8.14B to $7.91B this quarter.Yacktman Asset Management increased Fox Corp and News Corp while reducing Walt-Disney, ConocoPhillips, Exxon-Mobil and their large allocation to stocks in the Consumer Staples sector.Their largest five stakes are at ~36% of the portfolio.This article is part of a series that provides an ongoing analysis of the changes made to Yacktman’s 13F stock portfolio on a quarterly basis. It is based on Yacktman Asset Management’s regulatory  filed on 02/04/2020. Please visit our  to get an idea of their investment philosophy and our  for the fund’s moves during Q3 2019.This quarter, Yacktman Asset Management’s (YACKX) (YAFFX) (YASSX) 13F portfolio value decreased ~3% from $8.14B to $7.91B. The number of holdings increased from 49 to 50. The largest holding is Procter & Gamble at ~8% of the 13F portfolio. Largest five individual stock positions are Procter & Gamble, PepsiCo Inc., Walt Disney, Johnson & Johnson, and Coca-Cola Company, and together they account for 35.90% of the 13F portfolio. The firm currently holds around 25% cash - a far cry compared to zero cash immediately following the financial crisis. The portfolio is concentrated with recent 13F reports showing around 50 individual positions. 27 of their stakes are significantly large (over ~0.5% of the 13F portfolio each) and they are the focus of this article.Note: The top two holdings in their flagship fund YACKX are not in the 13F report as they are not US listed 13F securities – Samsung Electronics (SSNLF) Preferred and Bollore SA (BOIVF). They believe Bollore SA is especially undervalued and have been adding to their position this year. The fund has generated alpha since their 1992 inception (10.44% annualized compared to 9.94% for the S&P 500 index) but they are lagging in the most recent 10-year period (11.13% annualized vs 13.56%).New Stakes:None.Stake Disposals:None.Stake Increases:Fox Corp (FOX) (FOXA): The 5.79% position came about because of the merger transaction between Walt Disney and Twenty First Century Fox. Yacktman had a huge position in Twenty First Century Fox. The deal closed in March and the terms were ~$38 per share in cash or Disney stock subject to collar and one-third of one-share of new Fox for each share of Twenty First Century Fox. Last three quarters have seen a ~42% stake increase at prices between $30 and $39. The stock currently trades at ~$38.Macy’s Inc. (M): M is a 5.25% of the portfolio stake established in Q2 2019 at prices between $20 and $26 and more than doubled last quarter at prices between $14.30 and $23.25. The stock currently trades at $17.45. For investors attempting to follow Macy’s is a good option to consider for further research. The buy-thesis is based on valuation and the fact that they possess an extremely valuable portfolio of real-estate. This quarter also saw a ~3% stake increase.News Corp (NWSA): The minutely small NWSA stake as of Q2 2019 was built up to a ~3% portfolio position since at prices between $12.50 and $14.60. The stock currently trades at $14.08.Stake Decreases:Procter & Gamble (PG): PG is a very long-term position that has been in the portfolio since Yacktman’s first 13F filing in 1999. The position size remained insignificantly small until 2007 when about 520K shares were purchased at prices between $61 and $74. The position was cut in half in 2008 but the following four years saw a 100-fold stake increase at prices between $47 and $70. The four quarters thru Q3 2016 saw a 50% reduction at prices between $72 and $90. Last five quarters have seen another ~68% selling at prices between $80 and $125. The stock currently trades at ~$127 and it is their largest position at 7.86% of the portfolio.Note: Their third-quarter commentary indicate that the reductions in Consumer Staples stocks (PepsiCo, Coca-Cola, and Procter & Gamble) were due to the high valuation.PepsiCo Inc. (PEP): The 7.68% PEP stake was built over multiple years with the bulk purchased in the 2011-13 timeframe: over 22M shares were purchased during that time at prices between $60 and $86. The six quarters thru Q3 2016 had seen a roughly two-thirds reduction at prices between $91 and $111. Last three quarters have also seen another ~40% selling at prices between $121 and $140. The stock currently trades at ~$144. Yacktman is harvesting gains.Walt Disney (DIS): The position came about because of the merger transaction between Walt Disney and Twenty First Century Fox. Yacktman had a huge position in Twenty First Century Fox. The deal closed in March and the terms were ~$38 per share in cash or Disney stock subject to collar and one-third of one-share of new Fox for each share of Twenty First Century Fox. The stock currently trades at ~$141 and it is a large (top five) stake at 6.92%. Last three quarters have seen a combined ~17% selling at prices between $112 and $152.Johnson & Johnson (JNJ): JNJ is a large (top three) 6.86% of the 13F portfolio position that has been in the portfolio since their first 13F filing in Q1 1999. The bulk of the current position was purchased in 2011 in the low 60s price-range. The stock has doubled and currently trades at around ~$154. 2015-18 had seen a combined ~45% reduction at prices between $91 and $147. This quarter saw another ~20% selling at prices between $127 and $146.Coca-Cola Company (KO): KO is a very long-term position that has been in the portfolio for over twenty years. During Yacktman’s first 13F filing in Q1 1999, the position consisted of just a few thousand shares. The stake was built up to almost 2.4M shares by Q4 2006. The position size dropped below 1.5M shares in Q4 2008 but since then the stake was consistently increased - the position size doubled in both 2009 & 2010 and increased by ~150% each in 2012 & 2013. The huge stake build-up happened at prices between $21 & $30 and $33.50 & $43 in the 2009-10 & 2012-13 periods respectively. The stock currently trades at $58.85 and the position is at 6.59% of the portfolio. The six quarters thru Q3 2016 had seen a ~57% reduction at prices between $38 and $47. Last two quarters saw another ~28% selling at prices between $51 and $56.Booking Holdings (BKNG): BKNG is a large 5.51% of the portfolio position purchased in Q1 2019 at prices between $1650 and $1935. The stock currently trades at $1939. This quarter saw marginal trimming.Microsoft Corporation (MSFT): MSFT has been in the portfolio since 2003 and it became a significantly large position in 2006 when around 2.2M shares were purchased at prices between $22 and $29.50. The bulk of the current 5.21% of the portfolio stake was established in 2011 when ~20M shares were added at prices between $24 and $28.50. Last six years saw the position reduced by ~93% at prices between $36 and $160. The stock currently trades at ~$180. Yacktman is harvesting long-term gains from this position.Oracle Corporation (ORCL): The large ~5% ORCL position was first purchased in Q2 2013. Over 20M shares were acquired at prices between $30 and $35. H1 2015 saw a ~23% reduction at prices between $40 and $45. The five quarters thru Q3 2016 saw another one-third reduction at prices between $34 and $42. The two years thru Q3 2018 had also seen another one-third selling at prices between $38 and $53. That was followed with yet another one-third reduction in Q1 2019 at prices between $45 and $55. The stock currently trades at $54.74. Last three quarters have also seen a ~20% selling at prices between $50 and $60. Yacktman is harvesting gains.Sysco Corporation (SYY): SYY is a 4.11% of the 13F portfolio position. It was established in 2010 with the bulk purchased in 2011 and 2012 in the high-20s price-range. H2 2015 saw a ~40% reduction at prices between $36 and $42. The three years thru Q4 2018 had seen another ~80% selling at prices between $40 and $68. The stock currently trades at $75.70. Last year saw minor trimming.State Street Corporation (STT): The ~4% STT stake saw a ~150% increase in Q4 2018 at prices between $60 and $87. Last quarter saw another ~63% stake increase at prices between $49 and $61. The stock currently trades at ~$80. There was a ~8% trimming this quarter.US Bancorp (USB): The 3.38% USB position has been in the portfolio for over 15 years. Majority of the current stake was purchased in 2011 in the low-20s price-range. The stock currently trades at $55.20. 2015 saw a ~50% reduction in the low-40s price range while Q4 2016 saw another ~25% selling at prices between $42.50 and $52.50. Since then the activity has been minor.Alphabet Inc. (GOOG): The ~3% stake in GOOG was established in Q1 2019 at prices between $1015 and $1230 and it now goes for $1448. Last few quarters have seen only minor activity.Cisco Systems (CSCO): CSCO is a 2.72% of the 13F portfolio position first purchased in 2010. The bulk of the current position was purchased in 2011 and 2012 at prices between $15 and $22. The stake has since been sold down. 2015 saw a ~45% reduction at prices between $25.52 and $29.61 while the following year saw a ~20% reduction at prices between $23 and $32. There was a further ~82% selling over the last three years at prices between $30 and $58. The stock currently trades at $48.45. Yacktman is harvesting gains from this position.Anthem Inc. (ANTM) previously Wellpoint Inc.: ANTM is a 2.44% of the 13F portfolio position purchased in 2012 at prices between $55 and $74. Q1 2015 saw a ~15% reduction at prices between $123 and $158 and that was followed with a huge ~60% reduction in the following quarter at prices between $151 and $171. Q4 2017 also saw a ~18% selling at prices between $184 and $235. The stock currently trades at ~$287. Last few quarters have seen minor trimming.The Bank of New York Mellon (BK): The 2.29% BK stake was first purchased in 2009 with the bulk of the current position built in 2010 and 2011 in the high-20s price range. The stock is now at ~$47. The position was reduced by ~30% in Q4 2016 at prices between $39 and $49. Since then, the activity has been minor.Cognizant Technology (CTSH): The ~2% portfolio stake in CTSH saw a stake doubling in Q2 2019 at prices between $56.75 and $74.60. The stock currently trades at ~$65. Last two quarters have seen only minor activity.Note: Small ~1% portfolio stakes in the Indian outsourcers Cognizant and Infosys were established in Q2 2017 and were kept relatively steady since. Q2 2019 saw the CTSH stake doubled and INFY position reduced. The INFY position was eliminated last quarter but a very small position was bought again this quarter. For investors attempting to follow, CTSH is a good option to consider for further research.Wells Fargo (WFC): WFC is a 1.37% of the 13F portfolio position first purchased in Q1 2013. The bulk of the current position was purchased in Q2 2013 when ~4.8M shares were acquired at prices between $36.50 and $44.50. Q2 & Q3 2014 saw significant selling as the position was reduced to 2.8M shares at prices between $48 and $54. 2015 saw a ~25% further reduction at prices between $51 and $58. Since then, the activity has been minor. The stock currently trades at $48.31.Amerco (UHAL), Berkshire Hathaway (BRK.A) (BRK.B), Colgate-Palmolive (CL), ConocoPhillips (COP), Comcast Corporation (CMCSA), Exxon Mobil (XOM), and Goldman Sachs (GS): These very small (less than ~1% of the portfolio each) stakes were reduced during the quarter.Note 1: Yacktman is known to shy away from investing in banks but has held significant stakes in three banks since the financial crisis: The Bank of New York Mellon (2.29%), US Bancorp (3.38%), and Wells Fargo (1.37%). Q4 2018 also saw a ~4% stake build-up in State Street (STT).Note 2: Very small (less than 0.5% of the portfolio each) positions account for ~3% of the overall portfolio. They are Infosys (INFY), Spark Networks (LOV), Unilever NV (UN), ARCOSA Inc. (ACA), Altria Group (MO), America’s Car-Mart (CRMT), CH Robinson Worldwide (CHRW), Charles Schwab (SCHW), Clorox Company (CLX), Corning (GLW), GrafTech Intl. (EAF), Hershey Co. (HSY), MSC Industrial (MSCI), Micron Technology (MU), Otelco Inc. (OTEL), Philip Morris Intl. (PM), Reading International (RDI), SPDR S&P 500 ETF (SPY), and Stryker Corp (SYK).The spreadsheet below highlights changes to Yacktman’s 13F stock holdings in Q4 2019:"