An Unlikely Tech Stock Fan

Donald Yacktman, who for more than a decade has posted one of the best track records of any mutual fund manager, is finding big value in an area he once shunned: tech stocks. “If someone had told me 10 years ago that these stocks would be in my portfolio, I would have laughed,” Yacktman, who avoided tech stocks during the Internet bubble of the late 1990s, tells BusinessWeek in reference to two of his funds’ biggest holdings, Microsoft and Cisco Systems. Yacktman keys on firms with strong, predictable cash flows, and shares that trade for less than he estimates those cash flows […]

Yacktman: Big Blue Chips As Cheap As He’s Ever Seen

Top fund manager Donald Yacktman says that in his 40-plus-year investment career, he has “never seen so many large, profitable businesses selling on a relative basis to other things as cheaply as they do today.” Yacktman recently told Bloomberg that PepsiCo and News Corp. are two of the most attractive large-caps he’s finding right now. He also talks about his broader strategy, and his firm’s long-term time horizon. (Yacktman’s interview begins around the 5-minute mark of the clip.)

Why Bad News Can Be Good News

Many investors run from a stock when it makes short-term negative headlines. But in this recent interview with Bloomberg about News Corp., one of his biggest holdings, top fund manager Donald Yacktman offers an interesting take on how a value investor like himself deals with short-term bad news. In the case of News Corp., for example, Yacktman says recent events have generated bad publicity, but haven’t had that big of an impact on the firm’s ability to generate profits. The stock’s decline has thus actually made it more attractive to him, he says. [youtube=http://www.youtube.com/watch?v=QGS6YBsc7Uo]

Top Managers Shun Bank Stocks

While it’s now more than two-and-a-half years since the collapse of Lehman Brothers and the worst of the financial crisis, several top investors are still avoiding bank stocks. “We find it hard to believe the banks have cured all their bad asset problems, and they aren’t transparent enough for us to understand the risks,” Clyde McGregor, whose Oakmark Equity and Income Fund has beaten 99% of peers over the past decade, tells Bloomberg. “Can you still make money in banks? Maybe. But we can build a portfolio that doesn’t demand owning them.” McGregor says a big part of the problem […]

Yacktman Managers Talk Strategy, Mindset, and Value

In an extensive interview with GuruFocus.com, Donald Yacktman, Stephen Yacktman, and Jason Subotky of the top-performing Yacktman Funds talk about their investment strategy, and where they’re finding value right now. “The most important decision is the purchase price relative to the value of the investment,” the managers say when asked what the most important indicator they look at is. “The value of an investment is a function of the future cash flows generated from the current assets and the reinvestment of those cash flows by either the investor (reinvesting the dividends) or the management. The quality of the cash flows […]