The Yacktman Fund (Trades, Portfolio), part of Austin, Texas-based Yacktman Asset Management (Trades, Portfolio), disclosed in a portfolio update filing that its top five trades during the first quarter included boosts to its holdings in Pioneer Natural Resources Co. (PXD, Financial) and Charles Schwab Corp. (SCHW, Financial), the closure of its positions in U.S. Bancorp (USB, Financial) and Continental AG (XTER:CON, Financial) and a reduction to its holding in Weatherford International PLC (WFRD, Financial).
Managed by Stephen Yacktman and Jason Subotky, the fund seeks long-term capital appreciation by investing in growth stocks at low prices. The fund looks for three key criteria: good business, shareholder-oriented management and low purchase price.
As of March, the fund’s $7.20 billion equity portfolio contains 58 stocks with a quarterly turnover of 2%. The top four sectors in terms of weight are communication services, consumer defensive, energy and technology, representing 27.13%, 17.06%, 16.03% and 14.52% of the equity portfolio.
Investors should be aware that portfolio updates for mutual funds do not necessarily provide a complete picture of a guru’s holdings. The data is sourced from the quarterly updates on the website of the fund(s) in question. This usually consists of long equity positions in U.S. and foreign stocks. All numbers are as of the quarter’s end only; it is possible the guru may have already made changes to the positions after the quarter ended. However, even this limited data can provide valuable information.
Pioneer Natural Resources
The fund added 450,000 shares of Pioneer Natural Resources (PXD, Financial), expanding the position by 121.62% and its equity portfolio by 1.28%.
Shares of Pioneer Natural Resources averaged $214.93 during the first quarter; the stock is fairly valued based on its price-to-GF Value ratio of 0.97 as of Tuesday.
The Irving, Texas-based energy exploration and production company has a GF Score of 86 out of 100 based on a growth rank of 9 out of 10, a profitability rank of 8 out of 10, a financial strength rank of 7 out of 10, a GF Value rank of 5 out of 10 and a momentum rank of 4 out of 10.
Pioneer Natural Resources’ high profitability rank is driven by several positive investing signs, which include a high Piotroski F-score of 7 out of 9 and an operating margin that has increased by approximately 18.8% per year on average over the past five years and outperforms approximately 82% of global competitors.
Other gurus with holdings in Pioneer Natural Resources include PRIMECAP Management (Trades, Portfolio) and Barrow, Hanley, Mewhinney & Strauss.
Charles Schwab
The fund added 1.025 million shares of Charles Schwab (SCHW, Financial), boosting the position by 43.16% and its equity portfolio by 0.74%.
Shares of Charles Schwab averaged $73.23 during the first quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.65 as of Tuesday.
The Westlake, Texas-based brokerage and wealth management company has a GF Score of 84 out of 100 based on a GF Value rank of 10 out of 10, a growth rank of 9 out of 10, a profitability rank of 7 out of 10 and a rank of 4 out of 10 for momentum and financial strength.
Charles Schwab’s high profitability rank is driven by several positive investing signs, which include a five-star business predictability rank and a return on equity that outperforms approximately 82% of global competitors.
Other gurus with holdings in Charles Schwab include Dodge & Cox, Ken Fisher (Trades, Portfolio)’s Fisher Investments and Al Gore (Trades, Portfolio)’s Generation Investment Management.
Charles Schwab’s insiders purchased 135,844 shares across 12 transactions over the past three months.
U.S. Bancorp
The fund sold all 2.8 million shares of U.S. Bancorp (USB, Financial), trimming 1.73% of its equity portfolio.
Shares of U.S. Bancorp averaged $44.54 during the first quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.59 as of Tuesday.
The Minneapolis-based bank has a GF Score of 76 out of 100 based on a GF Value rank of 8 out of 10, a growth rank of 7 out of 10, a profitability rank of 6 out of 10, a momentum rank of 4 out of 10 and a financial strength rank of 3 out of 10.
U.S. Bancorp’s profitability ranks 6 out of 10 on the back of returns on equity outperforming approximately 59% of global competitors despite having a GuruFocus business predictability rank of four stars out of five.
Gurus with holdings in U.S. Bancorp include Chris Davis (Trades, Portfolio)’ Davis Selected Advisors and First Eagle Investment (Trades, Portfolio).
Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) sold 71,117,379 shares of U.S. Bancorp during the fourth quarter of 2022, slicing 91.42% of the position.
Continental
The fund sold all 600,000 shares of Continental (XTER:CON, Financial), paring 0.51% of its equity portfolio.
Shares of Continental averaged 67.37 euros ($73.91) during the first quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.72 as of Tuesday.
The German auto tires and supplies company has a GF Score of 73 out of 100 based on a GF Value rank of 10 out of 10, a momentum rank of 9 out of 10, a profitability rank of 6 out of 10, a financial strength rank of 5 out of 10 and a growth rank of 2 out of 10.
Continental’s low growth rank is driven by several warning signs, which include a three-year revenue decline rate of 4%, which underperforms approximately 72% of global competitors.
Weatherford International
The fund sold 650,000 shares of Weatherford International (WFRD, Financial), trimming 19.4% of the position and 0.47% of its equity portfolio.
Shares of Weatherford International averaged $58.57 during the first quarter; the stock is significantly overvalued based on its price-to-GF Value ratio of 2.26 as of Tuesday.
The Houston-based diversified oilfield services company has a GF Score of 50 out of 100 based on a growth rank of 7 out of 10, a GF Value rank of 1 out of 10 and a rank of 5 out of 10 for financial strength and profitability. However, there is not enough data to compute a momentum rank and thus, the GF Score may give an incomplete picture of the stock’s potential.
