Donald Yacktman: ‘We’re Dumpster Divers’ [VIDEO]

Donald Yacktman: ‘We’re Dumpster Divers’ [VIDEO]
Image source: YouTube Video Screenshot
Donald Yacktman: 'We're Dumpster Divers' [VIDEO]
Source: YouTube Video Screenshot

Don Yacktman of Yacktman Asset Management says three stocks could be worth a look in the event of a market pullback. Donald Yacktman was recently on CNBC talking about market valuations, top holdings, and ‘dumpster divers’. The video and a computer generated transcript can be found below:

He comes in at about 6 minutes in the this video:

don yacktman has one of the best returns in the last decade making it the top performing category in its category. don, good to have you back. welcome back to the half. thanks. good to be on. i’m sure y been listening to some of the conversation here, give us your view of the markets as you sit there right now. it’s the end of the quarter, we are looking at earnings staring at us coming into next week. well, i’m a very, very long-term horizon guy. we just think very different. we are not traders, we are investors, we look at for and risk adjusters of return. if you want a big picture, you would just say that those things tend to be priced ultimately against a 30-year bond, the u.s. bond and the u.s. bond i think is overpriced having a range between, what, 275 and 325? but on a relative basis, some of the very large, very profitable companies, i just think, look, on a relative basis, they are probably the cheapest thing there. i think six of our ten largest holdings have dividend yields between 26 and 33, somewhere in there, and i can’t understand why anybody would put treasury over them? we are showing you list of the top holdings, which inluds proctor and cisco, pepsico, sysco, we want to give people an idea with laszlo and you, what would your top picks, if the market pulls back a little bit, what would you go for here? two things. we are in an awkward period. we have a policy of not revealing our quarterly holdings until about 15 days after the end of the quarter. so the only thing you can rely on in looking at our stuff is the end of the year. the good news is we have a very low turnover rate. and we rank them in order of our risk adjusted rates of return prenchs. so the largest holdings at the end of the year would represent at the end of the year our best feelings, and those things don’t tend to change very rapidly. so, i mean, the top three at the end of the year were proctor, newscorps and pepsi. i know you like apollo, i know you like microsoft, for example, and so you would urge people, if there’s a pullback in any of these names specifically or the market a large, to load up on these stocks? you like them and why? well, let me use a little bit of a discussion here. we have two holdings in our portfolio that have a loss. and those would be of any consequence. hewlett-packard which has had a big run and apollo which has not had a big run. if you look at our portfolio, if you are a patient investor, you like to look at things near their lows, not near their highs. and apollo fits that category. i’m not telling peo they should rush out and buy it, but i think with a package of those things, at the end of the year we had small holdings in hewlett and small earnings in apple and rim, some of those just popped dramatic any the first quarter. the average stock fluctuates about 50% from its to high on the annual basis. some of those stocks have fluctuated, like rim has fluctuated over 100% within the last six months. so stocks fluctuate. and we just have a totally different view which we analyze companies. we think, as my associate jason says, you know, it’s almost always about the price. so we like — we are — my son steve puts it, we are dumpster divers. we like to buy a lot of things that are out of favor, but just because the storm comes through and shakes the fruit tree and knocks some stuff on the ground, it may be easier to examine, but it doesn’t mean you should eat everything that’s on the ground. understood. we have to run, but i want to ask you about dell. what do you think should happen? what are you in favor of at this point? the best price. and i think i love competition. we are seeing competition now for dell. and it’s a wonderful thing if you’re a shareholder. i mean, you’re not going to tell me whether you blik blackstone icon over the michael dell and silver lake deal? i know you have an opinion. tell me which one is going to give me the highest price. all right. we’ll find out. we’ll have you back on. don, good to have you. up next on the half, from tech

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i’m sure y been listening to some of the conversation here, give us your view of the markets as you sit there right now. it’s the end of the quarter, we are looking at earnings staring at us coming into next week. well, i’m a very, very long-term horizon guy. we just think very different. we are not traders, we areinvestors, we look at for and risk adjusters of return. if you want a big picture, you would just say that those things tend to be priced ultimately against a 30-year bond, the u.s. bond and the u.s. bond i think is overpriced having a range between, what, 275 and 325? but on a relative basis, some of the very large, very profitable companies, i just think, look, on a relative basis, they are probably the cheapest thing there. i think six of our ten largest holdings have dividend yields between 26 and 33, somewhere in there, and i can’t understand why anybody would put treasury over them? we are showing you list of the top holdings, which inluds proctor and cisco, pepsico, sysco, we want to give people an idea with laszlo and you, what would your top picks, if the market pulls back a little bit, what would you go for here? two things. we are in an awkward period. we have a policy of not revealing our quarterly holdings until about 15 days after the end of the quarter. so the only thing you can relyon in looking at our stuff is the end of the year. the good news is we have a very low turnover rate. and we rank them in order of our risk adjusted rates of return prenchs. so the largest holdings at the end of the year would represent at the end of the year our best feelings, and those things don’t tend to change very rapidly. so, i mean, the top three at the end of the year were proctor, newscorps and pepsi. i know you like apollo, i know you like microsoft, for example, and so you would urge people, if there’s a pullback in any of these names specifically or the market a large, to load up on these stocks? you like them and why? well, let me use a little bit of a discussion here. we have two holdings in our portfolio that have a loss. and those would be of any consequence. hewlett-packard which has had a big run and apollo which has not had a big run. if you look at our portfolio, if you are a patient investor, you like to look at things near their lows, not near their highs. and apollo fits that category. i’m not telling peo they should rush out and buy it, buti think with a package of those things, at the end of the year we had small holdings in hewlett and small earnings in apple andrim, some of those just popped dramatic any the first quarter.the average stock fluctuates about 50% from its to high on the annual basis. some of those stocks have fluctuated, like rim has fluctuated over 100% within the last six months. so stocks fluctuate. and we just have a totally different view which we analyze companies. we think, as my associate jason says, you know, it’s almost always about the price. so we like — we are — my son steve puts it, we are dumpster divers. we like to buy a lot of things that are out of favor, but just because the storm comes through and shakes the fruit tree and knocks some stuff on the ground, it may be easier to examine, but it doesn’t mean you should eat everything that’s on the ground. understood.

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