In this article we present the list of 10 Stocks Donald Yacktman is Selling in 2022. Click to skip ahead and see the 5 Stocks Donald Yacktman is Selling in 2022.
Huntsman Corporation (NYSE:HUN), Oracle Corporation (NYSE:ORCL), and Cisco Systems, Inc. (NASDAQ:CSCO) were a few of the prominent stocks that value investing legend Donald Yacktman was selling shares of during the first quarter.
Donald Yacktman is partner and portfolio manager of Yacktman Asset Management LP, the successor to Yacktman Asset Management Co., which he founded in 1992. The firm employs rigorous independent fundamental research when seeking out investment opportunities and takes a disciplined approach to price, ensuring the fund buys securities at rates that offer the best possibility for attractive returns.
Donald Yacktman has had multiple periods of prolonged market success during his 30+ year investing career, as evidenced by him winning Morningstar’s Fund Manager of the Decade in 2009. He’s also won portfolio manager of the year awards multiple times from different organizations. Yacktman’s flagship fund averaged annual returns of 10.5% between 2000 and 2010.
In the first quarter of 2022, Yacktman Asset Management’s 13F portfolio contained assets valued at $11.2 billion, virtually unchanged from a quarter earlier. Given its focus on holding stocks for the long-term, the fund had a characteristically minimal amount of portfolio turnover during the quarter. It added just one new stock to its holdings, which replaced a lone stock that was unloaded.
As it has been for the last two decades, the fund’s 13F portfolio was most heavily exposed to consumer staples stocks, though with the lowest rate of exposure to them in over 20 years. The fund also had double-digit percentage exposure to communications, finance, tech, and energy stocks, with record exposure to the latter.
In this article we’ll take a look at which stocks the notoriously long-term focused Yacktman was selling during the first quarter of 2022.
Donald Yacktman of Yacktman Asset Management
Our Methodology
The following data is gathered from Yacktman Asset Management’s latest 13F filing with the SEC. We follow hedge funds like Yacktman Asset Management because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.
All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q1 2022 reporting period.
10 Stocks Donald Yacktman is Selling in 2022
10. The Procter & Gamble Company (NYSE:PG)
Value of Yacktman Asset Management‘s 13F Position: $471 million
Number of Hedge Fund Shareholders (as of March 31): 72
Huntsman Corporation (NYSE:HUN), Oracle Corporation (NYSE:ORCL), and Cisco Systems, Inc. (NASDAQ:CSCO) aren’t the only prominent stocks that Donald Yacktman was selling early in 2022. He also unloaded 5% of his stake in The Procter & Gamble Company (NYSE:PG), selling off 130,230 shares. PG shares fell by 6% during Q1.
Among the funds tracked by Insider Monkey’s database, ownership of The Procter & Gamble Company (NYSE:PG) fell by 17% during 2021. Despite $3.2 billion in inflation-related headwinds across several segments of its business operations, including higher shipping and commodity costs, The Procter & Gamble Company (NYSE:PG) recently maintained its full-year earnings outlook. The dividend king also grew organic revenue across all 10 of its product categories in the company’s Q3 of its fiscal year 2022.
9. PepsiCo, Inc. (NYSE:PEP)
Value of Yacktman Asset Management‘s 13F Position: $715 million
Number of Hedge Fund Shareholders (as of March 31): 64
Donald Yacktman also sold off 5% of his stake in PepsiCo, Inc. (NYSE:PEP) during the first quarter of the year, disposing of 181,032 shares of the food and beverage giant. Pepsi nonetheless remains Yacktman’s second-largest 13F holding as of March 31.
After a decade of tepid sales growth, PepsiCo, Inc. (NYSE:PEP) has been a big beneficiary of the pandemic, growing sales by 12.9% in 2021. While sales growth is expected to slip to 6% this year, that would still be triple the company’s compound annual growth rate between 2011 and 2020. Pepsi was able to increase consumption of its products by 5% in Q4 even as it hiked prices by an average of 7%.
With inflation and uncertainty abounding in the market, the ClearBridge Investments Large Cap Value Strategy likes the stability that PepsiCo, Inc. (NYSE:PEP)’s provides to its portfolio, saying this about the company in its Q4 2021 investor letter:
“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year. After a strong year for equities, we sought to bolster more defensive areas of the portfolio and added to PepsiCo, increasing our exposure to a high-quality and stable name.”
8. Anthem, Inc. (NYSE:ANTM)
Value of Yacktman Asset Management‘s 13F Position: $190 million
Number of Hedge Fund Shareholders (as of March 31): 70
Yacktman Asset Management trimmed its Anthem, Inc. (NYSE:ANTM) holding by 5% during the first quarter of 2022, selling off a net total of 17,937 shares. Hedge fund ownership of Anthem dipped by 8% during 2021.
The largest U.S insurer in terms of medical membership with 46.8 million members, Anthem, Inc. (NYSE:ANTM) grew its adjusted earnings per share by 18% during Q1 to $8.25, an unexpectedly strong result that allowed the company to raise its full-year EPS guidance to $28.40. Anthem grew its engagement platform Sydney Health by 40% year-over-year in Q1, reaching 12 million registered users.
Anthem is also rapidly expanding its virtual primary care capabilities, reaching 5 million commercial members by the end of Q1, a figure that is expected to double by the end of the year.
The ClearBridge Investments Large Cap Value Strategy also discussed Anthem, Inc. (NYSE:ANTM) in its Q4 2021 investor letter, in which it noted having added heavily to its stake in the company throughout 2021:
“The quarter also saw strong showings from Anthem; has been operating well and is a key player in the evolution of health care insurance and delivery, providing more integrated and cost-effective solutions and receiving a tailwind from an aging population. The company tends to be volatile based on changes in medical loss ratios (MLR), though we view this volatility as a short term for business models that are able to reprice policies relatively quickly. We added significantly to the position during the year.”
7. Microsoft Corporation (NASDAQ:MSFT)
Value of Yacktman Asset Management‘s 13F Position: $599 million
Number of Hedge Fund Shareholders (as of March 31): 262
Microsoft Corporation (NASDAQ:MSFT) remained Yacktman Asset Management’s third-largest holding despite the fund selling off 104,577 MSFT shares during Q1, or about 6% of its former stake in the tech giant. Hedge fund ownership of Microsoft has soared by 150% since Q3 of 2015, with the stock now consistently ranking among the top three holdings of hedge funds every quarter.
Microsoft Corporation (NASDAQ:MSFT) has generated double digit sales growth across all three of its business segments in each of the last four quarters, headlined by Intelligent Cloud’s 26% growth in the company’s Q3 of FY 2022. Microsoft’s cloud services have been a big driver of that growth across all three segments, with cloud sales rising by 32% in the latest quarter, led by Azure’s 46% growth.
Motiwala Capital has been so impressed with Microsoft Corporation (NASDAQ:MSFT)’s performance in recent years that it added the company to its portfolio again after a long absence. It detailed some of the reasons why in its Q4 2021 investor letter:
“Microsoft (NASDAQ:MSFT) re-enters our portfolio after a long gap. MSFT sells enterprise and consumer software products as well as hardware products such as the Xbox video game console and Surface laptops. All business segments experienced double-digit revenue growth and earnings per share have compounded in the mid-double digits over the last 5 years. We believe MSFT continues this momentum in the years ahead.”
6. Cognizant Technology Solutions Corp (NASDAQ:CTSH)
Value of Yacktman Asset Management‘s 13F Position: $492 million
Number of Hedge Fund Shareholders (as of March 31): 33
Closing out the first half of the list is Cognizant Technology Solutions Corp (NASDAQ:CTSH), which Yacktman sold 419,689 shares of during the first quarter. That amounted to about 8% of the fund’s stake in the IT provider, which still ranks as its fifth-largest 13F holding. Hedge funds have been bailing on Cognizant in recent years, as ownership of CTSH fell by 43% in 2021 and is down by over 50% since the end of 2017.
One of the 15 Most Valuable IT Companies in the World, Cognizant Technology Solutions Corp (NASDAQ:CTSH) had a solid Q4 but continues to trail several of its peers in terms of growth rates. The company is expecting elevated employee churn in 2022 as it continues to suffer the worst attrition rates in the IT industry at over 30%. Cognizant was forced to hire 41,000 employees and invest 23 million hours of training time into them as a result.
That elevated employee churn is expected to weigh on Cognizant Technology Solutions Corp (NASDAQ:CTSH)’s results and shares this year, and could be why hedge funds bailed on the company in 2021 even faster than its own employees were.
Donald Yacktman has also been selling off Huntsman Corporation (NYSE:HUN), Oracle Corporation (NYSE:ORCL), and Cisco Systems, Inc. (NASDAQ:CSCO), one of which he unloaded completely during Q1. Check out all the details in the second part of this article, linked below.
Click to continue reading and see the 5 Stocks Donald Yacktman is Selling in 2022.
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Disclosure: None. 10 Stocks Donald Yacktman is Selling in 2022 is originally published at Insider Monkey.
