Since we are several weeks past the end of the first calendar quarter of the year, we are finding ourselves in the period when institutional investors are reporting their holdings in 13F filings with the Securities and Exchange Commission. One of the most recent 13Fs reveal the positions of Donald Yacktman’s Yacktman Asset Management. Monitoring 13Fs is beneficial because they reveal recent moves of the fund, and its favorite equity investments. We’ll take a look at Yacktman’s top five holdings. Highlights include: News Corp (NASDAQ:NWS), The Procter & Gamble Company (NYSE:PG), and PepsiCo, Inc. (NYSE:PEP).
This is important because..
Quantitative studies have revealed that it can benefit everyday investors by watching the hedge fund sentiment. It has been found that those who follow specific hedge fund activity can outperform the general indices by an average of 18 percentage points each year over a long term period. Learn how here.
Top three picks
News Corp (NASDAQ:NWS) represents the largest equity stake in the 13F portfolio of Yacktman Asset Management. According to its recent 13F, the fund currently holds 75,459,070 shares in News Corp (NASDAQ:NWS) Class A Common Stock, down from 79,736,235 shares at the end of last year. However, the value of the stake went up to some $2.3 billion, compared to $2.05 billion at the end of December. According to our database, there were over 60 other hedge funds invested in News Corp (NASDAQ:NWS). For the quarter ended December 31, News Corp (NASDAQ:NWS) reported EPS of $1.01 on net income attributable to stockholders of $2.38 billion. The year-to-date return of the stock is 26.15%.
The next among Donald Yacktman’s top picks is The Procter & Gamble Company (NYSE:PG), where the fund holds 26,537,423 shares, the value of the stake being $2.04 billion. In the previous filing, the fund disclosed owning 27,752,099 shares of The Procter & Gamble Company (NYSE:PG), worth about $1.9 billion. For the second quarter of FY2013 ended December 31, 2012, The Procter & Gamble Company (NYSE:PG) reported diluted net earnings per share of $1.39, up by an annual 144%. In April, the company’s Board of Directors announced an increase in quarterly dividend to $0.6015 from $0.562. At the same time The Procter & Gamble Company (NYSE:PG) adjusted its core EPS guidance for the year to $3.94-4.04 from a previous range of between $3.96 to $4.07 to show the $0.03 per share operating impact on core earnings.
PepsiCo, Inc. (NYSE:PEP) closes the top three positions in the equity portfolio of Yacktman Asset Management. In the latest round of 13F filings, the fund reported owning 23,044,812 shares of Pepsi, slightly lower than 23,006,617 shares at the end of December. The current value of the Yacktman’s stake in PepsiCo, Inc. (NYSE:PEP) amounts to $1.8 billion, which is higher compared to the previous value of $1.6 billion. The stock of PepsiCo, Inc. (NYSE:PEP) has a year-to-date return of 21.17% and is trading at a forward P/E below 18. For the first quarter of 2013, PepsiCo reported an EPS of $0.69 per share. For the whole fiscal 2013, PepsiCo, Inc. (NYSE:PEP) expects a 7% core constant currency EPS increase compared to the fiscal 2012 core EPS of $4.10.
A good choice of tech stocks
Stocks from the technology industry are doing well, the 1-year return of the industry totalling 10.07%. The last two of the top picks in the Yacktman Asset Management’s equity portfolio are companies engaged in this field, so let’s see how they have been performing as holdings in the 13F portfolio of the Donald Yacktman’s fund.
Donald Yacktman was also bullish on Microsoft Corporation (NASDAQ:MSFT), boosting its holding by 11,496,875 shares to 41,348,690 shares in the latest 13F. In this way, the value of the fund’s stake in Microsoft Corporation (NASDAQ:MSFT) also increased to $1.2 billion, from $797.9 million. Microsoft Corporation (NASDAQ:MSFT) posted a revenue of $20.49 billion for the first quarter of 2013, against $17.4 billion reported a year ago. Diluted EPS of the company increased by 20% to $0.72 per share and the stock is trading at a forward P/E below 11.0x.
