"Tracking Yacktman Asset Management Portfolio – Q3 2019 Update"
"Yacktman's 13F equity portfolio value decreased from $8.33B to $8.14B this quarter.Yacktman Asset Management increased Macy’s and State Street Corp while reducing their large allocation to stocks in the Consumer Staples sector.Their largest five stakes are at ~41% 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 11/05/2019. Please visit our  to get an idea of his investment philosophy and our  for the fund’s moves during Q2 2019.This quarter, Yacktman Asset Management’s (YACKX) (YAFFX) (YASSX) 13F portfolio value decreased ~2% from $8.33B to $8.14B. The number of holdings increased from 46 to 49. The largest holding is PepsiCo at ~10% of the 13F portfolio. Largest five individual stock positions are PepsiCo Inc., Procter & Gamble, Johnson & Johnson, Walt Disney, and Coca-Cola Company, and together they account for 40.59% of the 13F portfolio. The firm currently holds around 28% 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. 26 of their stakes are significantly large (over ~0.5% of the 13F portfolio each) and they are the focus of this article.Note: The firm’s AUM is ~$15.2B spread out over the mutual funds along with institutional and privately managed separate accounts. 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 (10.28% annualized compared to 9.69% for the S&P 500 index) but they are lagging in the most recent 10-year period (11.25% annualized vs 13.24%).New Stakes:None.Stake Disposals:None.Stake Increases:Booking Holdings (BKNG) and: BKNG is a fairly large ~5% of the portfolio position purchased in Q1 2019 at prices between $1650 and $1935. The stock currently trades at $1879. Last two quarters have seen a marginal increase.Macy’s Inc. (M): M is a 4.54% of the portfolio stake established last quarter at prices between $20 and $26 and more than doubled this quarter at prices between $14.30 and $23.25. The stock currently trades at $15.88. For investors attempting to follow Macy’s is a good option to consider for further research. The buy-thesis is based on valuation which they estimate to be 5-6 times this years earnings and the fact that they possess an extremely valuable portfolio of real-estate.Fox Corp (FOX) (FOXA): The ~4% position came about as a result 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 two quarters have seen a ~16% stake increase at prices between $33.50 and $39. The stock currently trades at $34.43.State Street Corporation (STT): The 3.13% STT stake saw a ~150% increase in Q4 2018 at prices between $60 and $87. This quarter saw another ~63% stake increase at prices between $49 and $61. The stock currently trades at $73.10.Cognizant Technology (CTSH): The ~2% portfolio stake in CTSH saw a stake doubling last quarter at prices between $56.75 and $74.60. The stock currently trades at $62.86. There was a marginal increase this quarter.Note: Similarly sized ~1% portfolio stakes in the Indian outsourcers Cognizant and Infosys were established in Q2 2017 and were kept relatively steady since. Last quarter saw the CTSH stake doubled and INFY position reduced. The INFY position was eliminated this quarter. For investors attempting to follow, CTSH is a good option to consider for further research.The Bank of New York Mellon (BK): The ~2% 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 $49.20. The position was reduced by ~30% in Q4 2016 at prices between $39 and $49. Since then, the activity has been minor.News Corp (NWSA): The minutely small NWSA stake as of last quarter was built up to a ~2% portfolio position this quarter at prices between $12.75 and $14.55. The stock currently trades near the low end of that range at $12.90. For investors attempting to follow, NWSA is a good option to consider for further research.Wells Fargo (WFC): WFC is a 1.25% 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 $54.10.Amerco (UHAL): The small ~0.85% UHAL position saw a ~25% increase in Q4 2018 at prices between $319 and $355. That was followed with a ~8% stake increase in Q1 2019. The stock is now at $387. Last two quarters have seen only minor adjustments.Stake Decreases:PepsiCo Inc. (PEP): The ~10% 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 two quarters have also seen another ~23% selling at prices between $120 and $140. The stock currently trades at ~$133. Yacktman is harvesting gains.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.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 four quarters have seen another ~60% selling at prices between $80 and $125. The stock currently trades at ~$120 and it is their second-largest position at 9.74% of the portfolio.Note: The two-thirds reduction over the last year was prompted by the large shift in valuation. From early May last year, P&G appreciated ~75% compared to ~10% for the S&P 500 index – such variance in a stable large-cap stock is unusual.Johnson & Johnson (JNJ): JNJ is a large (top three) 7.34% 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 ~$133. 2015-18 had seen a combined ~45% reduction at prices between $91 and $147. There was a marginal trimming over the last two quarters.Walt Disney (DIS): The position came about as a result 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 ~$138 and it is a large (top five) stake at 6.90%. There was minor trimming over the last two quarters.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 $52.21 and the position is at 6.75% of the portfolio. The six quarters thru Q3 2016 had seen a ~57% reduction at prices between $38 and $47. This quarter saw another ~23% selling at prices between $51 and $56.Oracle Corporation (ORCL): The large 5.43% 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 $56.49. Last two quarters have also seen a ~15% selling at prices between $50 and $60. Yacktman is harvesting gains.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 5.23% of the portfolio stake was established in 2011 when ~20M shares were added at prices between $24 and $28.50. Last five years saw the position reduced by ~88% at prices between $36 and $115. The stock currently trades at ~$146. YTD has seen another ~20% selling at prices between $97 and $141. Yacktman is harvesting long-term gains from this position.Sysco Corporation (SYY): SYY is a 3.94% 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 $80.40. There was marginal trimming in the last three quarters.US Bancorp (USB): The 3.22% 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 $58.90. 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.Cisco Systems (CSCO): CSCO is a 2.73% 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 eleven quarters at prices between $30 and $58. The stock currently trades at $48.83. Yacktman is harvesting gains from this position.Alphabet Inc. (GOOG): The 2.72% stake in GOOG was established in Q1 2019 at prices between $1015 and $1230 and it now goes for $1311. Last quarter saw a minor increase while this quarter there was a marginal trimming.Anthem Inc. (ANTM) previously Wellpoint Inc.: ANTM is a 2.18% of the 13F portfolio position purchased in 2012 at prices between $55 and $74. The stake has seen some selling over the years. 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 saw a ~18% selling at prices between $184 and $235. The stock currently trades at ~$282. Last few quarters have seen minor trimming.Exxon Mobil (XOM): XOM is a ~2% of the portfolio stake first purchased in 2007. The bulk of the position was acquired in 2013 in the low-90s price-range. The stock currently trades well below that range at $70.77. Q4 2015 saw a ~30% reduction at prices between $74 and $87 and that was followed with a ~15% reduction in Q2 2016 at prices between $82 and $94. Q4 2016 also saw another ~20% selling at prices between $83 and $88.50. The six quarters thru Q2 2018 had seen a combined ~12% reduction at prices between $72.50 and $91. Since then, the activity has been minor.ConocoPhillips (COP): COP is a long-term 1.56% position first purchased in 2007. It saw marginal trimming over the last two quarters.Comcast Corporation (CMCSA): CMCSA is a ~1% of the 13F portfolio position first purchased in 2008. The bulk of the original stake was purchased in 2009 at a cost-basis around $7.50. 2014 saw a ~40% reduction at prices between $26.50 and $30.50. Next year saw a further two-thirds reduction at prices between $26.50 and $32. The three quarters thru Q2 2017 also saw a combined ~50% selling at prices between $30 and $42. The stock currently trades at $45.19. Last few quarters have seen only minor activity.Note: The prices quoted above are adjusted for the 2-for-1 stock-split in Q1 2017.Kept Steady:Colgate-Palmolive (CL): The very small 1.14% CL position was kept steady during the quarter.Goldman Sachs (GS): GS is a 0.65% stake that saw a ~150% stake increase in Q4 2018 at prices between $156 and $232. Q1 2019 saw an about-turn: ~30% selling at prices between $167 and $203. The stock is now at ~$223.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 (2.01%), US Bancorp (3.22%), and Wells Fargo (1.25%). Q4 2018 also saw a 3.13% 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 Spark Networks (LOV), Unilever NV (UN), ARCOSA Inc. (ACA), Altria Group (MO), America’s Car-Mart (CRMT), Berkshire Hathaway (BRK.A)(BRK.B), 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 Q3 2019:"