Here's What This 704% Gainer Has Been Buying and Selling

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Every quarter, many money managers have to disclose what they've bought and sold, via "13F" filings. Their latest moves can shine a bright light on smart stock picks.

Today, let's look at investing giant Donald Yacktman, who founded Yacktman Asset Management in 1992. He isn't as well-known as investors such as Buffett, Soros, Berkowitz, and the like, but his track record is right up there with them. Yacktman is a value investor, aiming to achieve the highest possible risk-adjusted long-term return on his investments. The company's flagship Yacktman Fund gained 704% since its 1992 inception (as of the end of March, 2013), compared with 473% for the S&P 500 during the same period. (Annualized, that's 10.6% vs. 8.8%.

The company's reportable stock portfolio totaled $19.5 billion in value as of March 31, 2013.

Interesting developments
So what does Yacktman's latest quarterly 13F filing tell us? Here are a few interesting details:

The biggest new holding is specialty chemical company Sigma-Aldrich (UNKNOWN: SIAL.DL  ) , which recently hit a 52-week high, and also upped its dividend by 7.5%. The company has been growing at a modest rate, but generating substantial free cash flow. Its fortunes are tied to R&D spending at biotech and pharmaceutical companies that buy its offerings, and management is optimistic about emerging markets' growing interest in life-sciences research, too.

Among holdings in which Yacktman Asset Management increased its stake was freight and shipping specialist C. H. Robinson Worldwide (NASDAQ: CHRW  ) . In the company's recently reported first quarter, revenue surged 17%, but earnings per share shrank a bit. The biggest gain came from ocean shipping, where revenue rose 170%. In discussing results and the trucking market, management described a very fragmented marketplace, with thousands of small competitors. It also pointed out the company's relatively solid performance in recent difficult years.

Yacktman Asset Management reduced its stake in companies such as Western Union (NYSE: WU  ) and BlackBerry (NASDAQ: BBRY  ) . Western Union has been threatened by the new options people have for transferring money, such as eBay's PayPal service. It recently reported shrinking quarterly revenue and earnings, but continues to generate gobs of cash. It has been a solid dividend payer with that money, more than doubling its payout over the past three years, and has also been buying back shares.

BlackBerry has been struggling for years now, competing with iDevices and Android smartphones. Many have written it off, worried about factors such as production cuts, but others see rays of hope in emerging market sales, and its upcoming inexpensive smartphones. Most agree that the stock is risky, but some still view it as intriguingly priced.

Finally, Yacktman's biggest closed positions included H&R Block and Medtronic. Other closed positions of interest include United Parcel Service (NYSE: UPS  ) . UPS is trading near a 52-week high, and recently yielded 2.9%. Its fortunes are tied to the continued growth of e-commerce, which is growing well, despite the recent move toward increased taxation of online purchases. The stock doesn't appear to be a screaming bargain at recent levels, though, with its P/E ratio near 100, and its forward P/E above its five-year average.

We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. Therefore, 13-F forms can be great places to find intriguing candidates for our portfolios.

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Read/Post Comments (3) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 10, 2013, at 4:00 AM, PurpleBlue wrote:

    Very purposely misleading article. Fails to mention that Yacktman owns $68.6 Million in shares of Blackberry between his two major funds.

    I noted he only owned $275,000 TSLA in another fund. Apparently he is much higher on BBRY vs TSLA and we've seen what TSLA has done the past 3 weeks.

  • Report this Comment On May 10, 2013, at 9:34 AM, Oril wrote:

    Reducing ones position in an undervalued stock like Blackberry which has huge upside potential may not have been that smart a move.

    Not sure this article was intended as a slam against Blackberry or Yacktman but it seems rather pointless as they both seem to be doing well.

  • Report this Comment On May 10, 2013, at 9:42 AM, cbglobal wrote:

    Yachtman had doubled down on his 5.9 million shares of BBRY he already had for around $7; then resold them at $15-18. So he still have the same long term holding of BBRY that he had before. He just did a short term trade. So BBRY is still one of his largest holdings.

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