STT - Tracking Yacktman Asset Management Portfolio - Q1 2023 Update

2023-05-11 21:53:21 ET

Summary

• Yacktman's 13F equity portfolio value increased from $10.04B to $10.11B this quarter.
• Yacktman Asset Management increased Charles Schwab, EOG Resources, and Pioneer Natural Resources, while decreasing Weatherford International and U.S. Bancorp.
• Yacktman’s largest five stakes are at ~27% 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 13F Form filed on 5/8/2023. Please visit our Tracking Yacktman Asset Management series to get an idea of their investment philosophy and our previous update for the fund's moves during Q4 2022.

This quarter, Yacktman Asset Management's ( YACKX ) ( YAFFX ) ( YASSX ) 13F portfolio value increased from $10.04B to $10.11B. The number of holdings remained steady at 68. The largest holding is Canadian Natural Resources at 8.33% of the 13F portfolio. Largest five individual stock positions are Canadian Natural Resources, Microsoft, PepsiCo Inc., Alphabet, and Procter & Gamble. Together they account for ~27% of the 13F portfolio. The firm currently holds around ~11% cash. The portfolio is concentrated with recent 13F reports showing around 65 individual positions. 44 of their stakes are significantly large (over ~0.5% of the 13F portfolio each) and they are the focus of this article.

Note: Four of their top holdings in their flagship Yacktman Fund are not in the 13F report as they are not US listed 13F securities - Bollore SE ( OTCPK:BOIVF ), Samsung Electronics ( OTCPK:SSNLF ) Preferred, Brenntag SE ( OTCPK:BNTGY ), and Associated British Foods plc ( OTCPK:ASBFY ). The fund has generated alpha since their 1992 inception (10.25% annualized compared to 9.52% for the S&P 500 index).

Stake Increases:

Canadian Natural Resources ( CNQ ): CNQ is currently the largest position at 8.33% of the portfolio. It was purchased in Q1 2021 at prices between $22.50 and $32.50. There was a ~90% stake increase in the next quarter at prices between $29.40 and $38. That was followed with a ~30% increase in Q3 2021 at prices between $30.40 and $36.50. The stock currently trades at $55.71. There was a ~10% trimming in the last two quarters while this quarter saw a marginal increase.

Alphabet Inc. ( GOOG ): The 4.25% stake in GOOG was established in Q1 2019 at prices between ~$51 and ~$62 and it now goes for ~$117. Q1 2020 saw a roughly one-third stake increase at prices between ~$53 and ~$77. The last several quarters have seen only minor adjustments.

U-Haul Holding Company ( UHAL ): The ~4% of the portfolio UHAL position saw a ~50% stake increase during Q1 & Q3 2020 at prices between ~$24.20 and $38.40. Q2 2021 saw another ~75% stake increase at prices between ~$52.70 and ~$63.20. That was followed with a ~60% stake increase in Q1 2022 at prices between ~$55.70 and ~$72.60. The stock currently trades at $61.61. The last four quarters have seen minor increases.

Note: the prices quoted above are adjusted for the 10-for-1 stock-split last November.

Fox Corp. ( FOX ) ( FOXA ): The FOX stake 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 a collar and one-third of one-share of new Fox for each share of Twenty First Century Fox. The last three quarters of 2019 had seen a ~42% stake increase at prices between $30 and $39. Q1 2020 saw another ~55% stake increase at prices between $20 and $38.60. There was a ~38% reduction over the two quarters through Q1 2021 at prices between ~$25 and ~$41.50. The stock currently trades at $28.16, and the stake is at 3.59%. The last two years have seen only minor adjustments.

Charles Schwab ( SCHW ): The 3.26% of the portfolio stake in SCHW was first purchased in Q4 2020 at prices between $37 and $53. The stock is now at $47.73. There was a ~20% stake increase last quarter at prices between ~$67 and ~$83. That was followed with a ~47% stake increase this quarter at prices between ~$52 and ~$86.

Cognizant Technology ( CTSH ): The 3.23% portfolio stake in CTSH saw a stake doubling in Q2 2019 at prices between $56.75 and $74.60. There was a ~60% stake increase in Q1 2020 at prices between $42 and $71.50. That was followed with a roughly one-third increase in Q3 2021 at prices between $66.50 and $78. The stock currently trades at ~$62. The last six quarters have seen only minor adjustments.

News Corp. ( NWSA ): The ~3% portfolio position was built in 2019 at prices between $12.50 and $14.60. Q1 2020 also saw a ~30% stake increase at prices between $8.20 and $15. There was a ~25% selling in Q1 2021 at prices between $18 and $27.30. The stock currently trades at $16.74. The last two years have seen only minor adjustments. They have a ~4% ownership stake in the business.

EOG Resources ( EOG ), Devon Energy ( DVN ), Diamondback Energy ( FANG ), and Pioneer Natural Resources ( PXD ): These four positions were established in Q3 2022. EOG is a 1.92% of the portfolio position purchased at prices between ~$95 and ~$127 and the stock currently trades above that range at ~$111. The 1.49% DVN stake was established at prices between ~$51 and ~$74 and it is now at $47.26. FANG is a 1.93% of the portfolio stake purchased at prices between ~$107 and ~$135 and the stock is now at ~$128. The 2.56% PXD position was established at prices between ~$205 and ~$263 and it now goes for ~$207. This quarter saw a ~75% stake increase at prices between ~$182 and ~$242. The stakes in EOG, DVN, and FANG saw minor increases in the last two quarters.

ConocoPhillips ( COP ): The 1.76% COP stake was primarily built during Q3 2022 at prices between ~$82 and ~$118. The stock is now at ~$100. The last two quarters saw minor increases.

Tyson Foods ( TSN ): TSN is a 1.76% of the portfolio stake established in Q4 2020 at prices between $56.50 and $70 and the stock currently trades at $49.34. The last nine quarters have seen only minor adjustments.

Univar Solutions ( UNVR ): UNVR is a small 0.69% of the portfolio stake established last quarter at prices between ~$23 and ~$34 and the stock currently trade at $35.52. There was a minor ~2% stake increase this quarter.

Armstrong World Industries ( AWI ), Embecta Corp. ( EMBC ), Elevance Health ( ELV ), previously Anthem Inc. , eBay Inc. ( EBAY ), L3Harris Tech. ( LHX ), and Warner Bros. Discovery ( WBD ) : These small (less than ~2% of the portfolio each) stakes were increased during the quarter.

Note: Embecta was Becton, Dickinson and Company's ( BDX ) diabetes care business. It was spun off last April. Shareholders of BDX received one share of Embecta for every five shares held.

Stake Decreases:

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. ~20M shares were added in 2011 at prices between $24 and $28.50. The six years through 2019 saw the position reduced by ~95% at prices between $36 and $190. Q2 2020 also saw a ~17% selling at prices between $152 and $204. There was a ~15% stake increase in Q1 2021 at prices between $212 and $245. Since then, there have only been minor adjustments. The stock currently trades at ~$310 and the large (top three) stake is at 5.48% of the portfolio.

PepsiCo, Inc. ( PEP ): PEP is currently the third largest 13F stake at 4.62% of the portfolio. It was built over multiple years with the bulk established 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. The last three quarters of 2019 had also seen another ~40% selling at prices between $121 and $140. That was followed with a ~25% reduction in Q1 2020 at prices between $104 and $147. Q2 2021 saw a one-third increase at prices between ~$141 and ~$149 while in the last two quarters there was a ~40% selling at prices between ~$162 and ~$186. The stock currently trades at ~$195. There was marginal trimming this quarter.

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 stake 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 through Q3 2016 saw a 50% reduction at prices between $72 and $90. The six quarters through Q1 2020 had seen another ~80% selling at prices between $80 and $128. The stock currently trades at ~$154 and the stake is now at 3.94% of the portfolio. There was a ~8% trimming this quarter.

Booking Holdings ( BKNG ): BKNG is a 3.81% of the portfolio position purchased in Q1 2019 at prices between $1650 and $1935. Q2 2020 saw a ~20% reduction at prices between $1231 and $1841. The stock currently trades at ~$2657. The last eleven quarters have seen only minor adjustments.

Reliance Steel & Aluminum ( RS ): RS is a 3.18% of the portfolio position established in Q4 2021 at prices between ~$141 and ~$167 and the stock currently trades well above that range at ~$239. There was a ~20% stake increase in Q1 2022 at prices between ~$149 and ~$195. The last four quarters saw marginal trimming.

Johnson & Johnson ( JNJ ): JNJ is a 3.11% of the 13F portfolio position that has been in the portfolio since their first 13F filing in Q1 1999. The bulk of the original position was purchased in 2011 in the low 60s price-range. 2015-18 saw a combined ~45% reduction at prices between $91 and $147. The three quarters through Q2 2020 saw another ~50% selling at prices between $111 and $156. The stock currently trades at ~$161. The last several quarters have seen minor trimming.

State Street Corporation ( STT ): The 2.61% STT stake saw a ~150% increase in Q4 2018 at prices between $60 and $87. Q3 2019 saw another ~63% stake increase at prices between $49 and $61. There was a ~20% selling over the three quarters through Q2 2020. The stock currently trades at $67.73. The last eleven quarters have seen only minor adjustments.

Weatherford International plc ( WFRD ): WFRD is a 2.36% of the portfolio position. Weatherford filed for Chapter 11 bankruptcy protection in July 2019 and emerged that December. Yacktman Asset Management had both debt and equity in the business. The stock got relisted in Nasdaq in June 2021. Shares started trading at $15.75 and currently go for $58.92. There was a ~20% selling this quarter at prices between ~$47 and ~$69.

Note: Yacktman's ownership stake in WFRD is ~5.6%.

Ingredion Inc. ( INGR ): The 2.28% INGR stake was purchased in Q3 2020 at prices between $75 and $90 and increased by ~170% next quarter at prices between $69 and $82. The stock currently trades well above those ranges at ~$110. The last four quarters have seen minor trimming.

Berkshire Hathaway ( BRK.A ) ( BRK.B ): Berkshire position saw a huge stake build-up in Q1 2021 at prices between $222 and $264. It is now a significant ~2.4% of the portfolio position. The stock currently trades at ~$323. The last several quarters saw only minor adjustments.

U.S. Bancorp ( USB ): The USB position has been in the portfolio for over 15 years. The majority of the original stake was purchased in 2011 in the low-20s price-range. The stock currently trades at ~$29. 2015 saw a ~50% reduction in the low-40s price range. Q4 2016 saw another ~25% selling at prices between $42.50 and $52.50. The stake was reduced to a minutely small position this quarter at prices between ~$33 and ~$50.

Bank of New York Mellon ( BK ), Cisco Systems ( CSCO ), Coca-Cola Company ( KO ), Colgate-Palmolive ( CL ), Comcast Corporation ( CMCSA ), Goldman Sachs ( GS ), Lockheed Martin ( LMT ), Northrop Grumman ( NOC ), Oracle Corporation ( ORCL ), Sysco Corporation ( SYY ), Walt Disney ( DIS ), and Wells Fargo ( WFC ): These small (less than ~2% of the portfolio each) stakes were reduced during the quarter.

Note: Yacktman is known to shy away from investing in banks but has held significant stakes in banks since the financial crisis: The Bank of New York Mellon (1.70%), Wells Fargo (0.96%), and State Street Bank (2.61%) are the current holdings. The stake in U.S. Bancorp was almost sold out this quarter.

The spreadsheet below highlights changes to Yacktman's 13F stock holdings in Q1 2023:

For further details see: