Donald Yacktman said in his fourth quarter letter that although his fund did not require market declines to put cash to work, “it is generally more difficult to find significant new investment opportunities in a rapidly rising market.” His Yacktman Focused Fund Service Class (MUTF:YAFFX) and Yactkman Fund found two new stocks meeting the firm’s low-valued criteria in the first quarter: Hengan International Group Co. Ltd. (HKG:1044) and Twenty-First Century Fox Inc (NASDAQ:FOX). It also made a substantial increase to an existing holding, Korea’s Samsung Electronics Co. Ltd. (LON:BC94) (KRX:0059935).
Though the long-term oriented Yacktman Funds fell just short of the S&P 500 (INDEXSP:.INX) for 2013, with a 27.74% return compared to 32.39% for the market, the managers are more concerned with guarding against risk. They wrote in their first quarter letter: “In the current environment, where the stock market has risen significantly since 2009, and rapidly in the last two years, we are very focused on managing risk through quality security selection and portfolio positioning.”
The Yacktman Funds have approximately $13.7 billion assets under management, and have purchased 44 stocks for the Yacktman Fund (Trades, Portfolio), and 38 in the Yacktman Focused Fund. Both of the funds are predominantly weighted in the Consumer Defensive sector.
Yacktman Funds’ New Stocks
Hengan International Group
Yacktman Funds purchased 3,203,100 shares of Hengan International Group Co. Ltd. (HKG:1044) for the Yacktman Fund, representing 0.3% of the portfolio. For the Yacktman Focused Fund, they purchase 2,727,600 shares of Hengan International Group Co., a 0.3% portfolio weighting. The stock’s price averaged HK84 in the first quarter.
Hengan International Group Co. Ltd. (HKG:1044) is engaged in the manufacturing, distribution and sale of personal hygiene products, food and snack products and skin care products in the People’s Republic of China, Hong Kong and certain overseas markets.
Hengan International Group Co. Ltd. (HKG:1044) has a market cap of $103.01 billion; its shares were traded at around HK83.25 with a P/E ratio of 29.40 and P/S ratio of 5.17. The dividend yield of Hengan International Group Co. Ltd. stocks is 2.15%. Hengan International Group Co. Ltd. had an annual average earnings growth of 33.40% over the past 10 years. GuruFocus rated Hengan International Group Co. Ltd. the business predictability rank of 5-star.
Twenty-First Century Fox Inc. (FOX)
Yacktman Funds also purchased 991,550 shares of Twenty-First Century Fox Inc (NASDAQ:FOX) for the Yacktman Fund, representing 0.28% of that portfolio. For the Yacktman Focused Fund (Trades, Portfolio), they bought 976,550 shares of Twenty-First Century Fox Inc., a 0.32% portfolio holding. T
The stock’s price averaged $32 in the first quarter. Yacktman Funds already held positions in the A-share class of Twenty-First Century Fox Inc (NASDAQ:FOXA) stock since third quarter 2013.
Twenty-First Century Fox Inc. is a Delaware corporation, incorporated in Nov. 12, 2004. Twenty-First Century Fox Inc. has a market cap of $69.42 billion; its shares were traded at around $30.76 with a P/E ratio of 15.10 and P/S ratio of 2.40. The dividend yield of Twenty-First Century Fox Inc. stocks is 0.80%.
Yacktman Funds’ increased position
Samsung Electronics
The Yacktman Funds increased their Yacktman Focused Fund position in Samsung Electronics Co. Ltd. (LON:BC94) (KRX:0059935) by 1,902.92%, buying an additional 215,981 shares for the holding started in the previous quarter. The holding represents 2.4% of the Yactkman Focused Fund. In the Yacktman Fund, they increased the holding by 1,591.23%, adding 221,551 shares to the holding also began in the previous quarter. It represents 2% of the fund. The stock’s share price averaged 990,934 won.
Samsung Electronics Co. Ltd. (LON:BC94) (KRX:0059935) was incorporated under the laws of the Republic of Korea in 1969. It trades with a P/E ratio of 14.19. The dividend yield of Samsung Electronics Co. Ltd. stocks is 1.09%.
