Tracking Yacktman Asset Management Portfolio – Q4 2022 Update (MUTF:YACKX)

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 1/26/2023. 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 Q3 2022.

This quarter, Yacktman Asset Management’s (MUTF:YACKX) (MUTF:YAFFX) (MUTF:YASSX) 13F portfolio value increased ~9% from $9.17B to $10.04B. The number of holdings increased from 67 to 68. The largest holding is Canadian Natural Resources (CNQ) at 8.39% of the 13F portfolio. Largest five individual stock positions are Canadian Natural Resources, PepsiCo Inc. (PEP), Microsoft (MSFT), Procter & Gamble (PG), and U-Haul Holding Company (UHAL). Together they account for ~26% 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: Three 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, and Brenntag SE (OTCPK:BNTGY). The fund has generated alpha since their 1992 inception (10.25% annualized compared to 9.57% for the S&P 500 index).

New Stakes:

Univar Solutions (UNVR): UNVR is a small 0.62% of the portfolio stake established during the quarter at prices between ~$23 and ~$34 and the stock currently trades near the top of that range at $33.77.

Stake Increases:

U-Haul Holding Company: 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 $65.59. Last three quarters have seen minor increases.

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

Charles Schwab (SCHW): Most of the 3.55% of the portfolio stake in SCHW was purchased in Q4 2020 at prices between $37 and $53. The stock is now well above that range at $75.50. There was a ~20% stake increase this quarter at prices between ~$67 and ~$83.

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. 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 $31.41, and the stake is at 3.27%. Last seven quarters have seen only minor adjustments.

News Corp (NWSA): The 3.15% 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 $20.17. Last seven quarters have seen only minor adjustments. They have a ~4% ownership stake in the business.

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% of the portfolio position. The stock currently trades at ~$307. Last five quarters had seen only minor adjustments. There was minor trimming this quarter.

ConocoPhillips (COP): The ~2% COP stake was primarily built last quarter at prices between ~$82 and ~$118. The stock is now above that range at ~$121. There was a marginal increase this quarter.

U.S. Bancorp (USB): The ~2% USB position has been in the portfolio for over 15 years. Majority of the original stake was purchased in 2011 in the low-20s price range. The stock currently trades at $48.80. 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. Since then, the activity has been minor.

EOG Resources (EOG), Devon Energy (DVN), Diamondback Energy (FANG), and Pioneer Natural Resources (PXD): These four positions were established last quarter. EOG is a 1.93% of the portfolio position purchased at prices between ~$95 and ~$127 and the stock currently trades above that range at ~$132. The 1.72% DVN stake was established at prices between ~$51 and ~$74 and it is now at ~$62. FANG is a 1.80% of the portfolio stake purchased at prices between ~$107 and ~$135 and the stock is now well above that range at ~$145. The 1.65% PXD position was established at prices between ~$205 and ~$263 and it now goes for ~$230. All four stakes saw minor increases this quarter.

Tyson Foods (TSN): TSN is a 1.83% of the portfolio stake established in Q4 2020 at prices between $56.50 and $70 and the stock currently trades at $64.10. Last two years have seen only minor adjustments.

Armstrong World Industries (AWI), Bank of New York Mellon (BK), Colgate-Palmolive (CL), eBay Inc. (EBAY), Elevance Health (ELV) previously Anthem Inc., Embecta Corp. (EMBC), Goldman Sachs (GS), Warner Bros. Discovery (WBD), and Wells Fargo (WFC): 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:

Canadian Natural Resources: CNQ is currently the largest position at 8.39% of the portfolio. It was purchased in Q1 2021 at prices between $22.50 and $32.50. There was a ~90% stake increase 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 $60.43. There was a ~10% trimming over the last two quarters.

PepsiCo Inc.: PEP is currently the second-largest 13F stake at 4.66% 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. Last three quarters of 2019 had also seen another ~40% selling at prices between $121 and $140. That was followed by 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 ~$170.

Microsoft Corporation: 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 thru 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 ~$243 and the large (top three) stake is at 4.60% of the portfolio.

Procter & Gamble: 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 thru Q3 2016 saw a 50% reduction at prices between $72 and $90. The six quarters thru Q1 2020 had seen another ~80% selling at prices between $80 and $128. The stock currently trades at ~$141 and the stake is now at 4.41% of the portfolio. Last several quarters have seen minor trimming.

Alphabet Inc. (GOOG): The 3.65% stake in GOOG was established in Q1 2019 at prices between ~$51 and ~$62 and it now goes for ~$98. Q1 2020 saw a roughly one-third stake increase at prices between ~$53 and ~$77. Last several quarters have seen only minor adjustments.

Johnson & Johnson (JNJ): JNJ is a 3.65% 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 had seen a combined ~45% reduction at prices between $91 and $147. The three quarters thru Q2 2020 had seen another ~50% selling at prices between $111 and $156. The stock currently trades at ~$162. Last several quarters have seen minor trimming.

Booking Holdings (BKNG): BKNG is a ~3% 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 ~$2437. Last ten quarters have seen only minor adjustments.

Cognizant Technology (CTSH): The ~3% 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 $65.27. Last five quarters have seen only minor adjustments.

State Street Corporation: The 2.71% 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 thru Q2 2020. The stock currently trades at $90.15. Last ten quarters have seen only minor adjustments.

Reliance Steel & Aluminum (RS): RS is 2.53% of the portfolio position established in Q4 2021 at prices between ~$141 and ~$167 and the stock currently trades at ~$222. There was a ~20% stake increase in Q1 2022 at prices between ~$149 and ~$195. Last three quarters saw marginal trimming.

Weatherford International plc (WFRD): WFRD is 2.50% 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 ~$55.

Note: Yacktman’s ownership stake in WFRD is ~6.5%.

Ingredion Inc. (INGR): The 2.25% 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 at ~$101. Last three quarters have seen minor trimming.

L3Harris Tech. (LHX), and Northrop Grumman (NOC): These two stakes were established in Q1 2021. The 1.35% LHX stake was established at prices between $172 and $203 and the stock currently trades at ~$212. The 2.23% NOC stake was established at prices between $287 and $324 and it is now well above that range at ~$439. Both stakes saw a ~5% trimming this quarter.

Coca-Cola Company: 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 six quarters thru Q3 2016 saw a ~57% reduction at prices between $38 and $47. The three quarters thru Q1 2020 saw another ~50% selling at prices between $37.50 and $60. There was a similar reduction last quarter at prices between ~$56 and ~$65. The stock currently trades at $60.64, and the position is at 1.65% of the portfolio. This quarter saw marginal trimming.

Sysco Corporation (SYY): SYY is 1.15% 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. Q1 2020 saw a ~60% stake increase at prices between $31 and $85.There was a ~25% selling over the three quarters through Q2 2022 at prices between ~$68 and ~$90. That was followed by a ~63% reduction in the last two quarters at prices between ~$71 and ~$88. The stock currently trades at $78.10.

Cisco Systems (CSCO), Comcast Corporation (CMCSA), First Hawaiian Bank (FHB), Lockheed Martin (LMT), Oracle Corporation (ORCL), and Walt Disney (DIS): 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 three banks since the financial crisis: The Bank of New York Mellon (1.73%), U.S. Bancorp (2.07%), and Wells Fargo (1.07%). Also, a 2.71% stake in State Street was added in 2018 and a small 0.49% stake in First Hawaiian Bank was added in 2020.

The spreadsheet below highlights changes to Yacktman’s 13F stock holdings in Q4 2022:

Source: John Vincent. Data constructed from Yacktman Asset Management’s 13F filings for Q3 2022 and Q4 2022.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.