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Showing posts with label Donald Yacktman. Show all posts
Showing posts with label Donald Yacktman. Show all posts

Apple vs. Microsoft: What’s the Smart Money Think?

The following article was written by our guest autor Indider Monkey. Apple (AAPL) versus Microsoft (MSFT). It is a clichĂ©d contest debated by everyone from tech bloggers to university professors. If you follow the equity markets, we’re willing to bet you’ve taken a side once or twice, or at least thought about it. So instead of picking favorites using the same old tired P/E or earnings growth metrics, we are going to give you some information that’s a bit more useful.

We’re talking about hedge fund sentiment.

At Insider Monkey, our goal is to help you understand how to parse down the vast hedge fund industry into insight you can use. Our empirical research on hedge funds has allowed us to hone our small-cap strategy into a market-beating machine. In its first year ended last month, this strategy returned 47.6%, outpacing the S&P 500 by more than 29 percentage points.

The crowd’s pick: Apple

We track a little over 500 of the best and brightest hedge funds in existence (out of around 8,000 total), and in the Apple-Microsoft debate, the consensus filings are intriguing. According to the final numbers from last quarter, Apple was the third most popular stock among the money managers we track, with 122 hedge funds invested. Ninety-two elite hedge funds were long Microsoft at this time.

Relatively speaking, Google (GOOG) was a much more well-liked tech stock last quarter with a whopping 157 hedgies, but both Microsoft and Apple finished in this measure’s top 10, easily outpacing peers like Nokia (NOK) or Intel (INTC). This overarching form of analysis isn’t the only way to compare the duo, though.

Einhorn’s pick: Apple

Within the aggregate data, there are quite a few interesting cases of noteworthy hedge fund managers choosing between the two based on a variety of factors. David Einhorn, for example, chose to go with Apple while closing out of Microsoft last quarter. His rational was explained in his Q2 2013 shareholder letter, in which Greenlight Capital wrote, “Windows 8 appears to be a flop, and a decade of mismanagement has put Microsoft at risk of becoming a shrinking company.” Apple, meanwhile, is still Einhorn’s No. 1 stock pick, accounting for just over 16% of his $5.3 billion equity portfolio.

Yacktman’s pick: Microsoft

One hedge fund manager who feels precisely the opposite is Donald Yacktman. At the Value Investing Congress on Monday, Yacktman—who’s particularly skilled at finding opportunities in the large cap space—said Apple isn’t as cheap as most think, reasoning that it can’t sustain its high profit margins.

Yacktman remarked his "hat's off to Steve Jobs, he hit 4 home runs in a row," to those in attendance, but in response to a question posed by an audience member on why he holds Microsoft but not Apple stock, his response was interesting. Essentially, Yacktman said that Microsoft's profit margins are protected, i.e. there aren't competing viable operating systems or Office products, while Apple's margins are not. Assuming Samsung's smartphones are close substitutes to Apple's iPhone, Cupertino is theoretically more vulnerable to a shift in consumer preferences and/or a prolonged lack of innovation.

Ubben’s pick: Microsoft

Behind the next proverbial door we’ll take a look at Jeff Ubben of ValueAct Capital, an activist investor who has a longer-term focus than many of his corporate raider peers. Ubben and ValueAct took a huge stake in Microsoft back in April, and the position represents close to $2 billion on the books.  In the eyes of most analysts familiar with the matter, it’s widely understood that Ubben’s aim is for Microsoft to concentrate on cultivating its Azure platform to become the top dog of cloud computing.

Ubben was also at the VIC in New York, and his statements on Microsoft echoed those of Yacktman. According to CNNMoney, the crux of his bullish thesis—in addition to the recently approved buyback and dividend boost—is that Microsoft can rely on its enterprise contract staple for the long term. Apple and its peers, on the other hand, “have to run faster every year to keep up,” Ubben said.

Final thoughts

At the end of the day, it’s up to each individual investor to make up his or her own mind about the Apple-Microsoft debate. The elite hedge fund crowd is leaning toward Apple, and Einhorn is sticking with his guns now that Tim Cook and management have shown their shareholders the money.

Apple’s apparently cheap valuation can be called into question, though, if you’re in Yacktman’s camp with regard to margin pressures. Or, if you’re like Ubben and are more confident in Microsoft’s cloud opportunity and existing strengths in enterprise computing, it’s reasonable to feel like the company represents a safer investment than Apple. Either way, the world’s richest investors are split on the matter, and this is a debate that doesn’t look like it will be decided any time soon.

Disclosure: none

The Best Yielding Stock Buys Of Donald Yacktman’s - Yacktman Focused Q4-2011 Fund Portfolio

Best Dividend Stock Increases Of Donald Yacktman - Yacktman Focused Q4-2011 Fund By Dividend Yield – Stock Capital, Investment. Here is a current overview of the best yielding stocks that Donald Yacktman bought last quarter for his fund “Yacktman Focused”. In total, he manages 39 stocks with a total portfolio worth of USD 3,821,410,000. These are the best yielding buys and stock holding increases:

Donald Yacktman - Yacktman Focused Q4-2011 Fund Portfolio

Donald Yacktman - Yacktman Focused Q4-2011 Fund Investing Strategies By Dividend Yield – Stock Capital, Investment. Here is a current portfolio update of Donald Yacktman’s - Yacktman Focused - portfolio movements as of Q4/2011 (December 31, 2011). In total, he has 39 stocks with a total portfolio worth of USD 3,821,410,000.

Strategy:
Yacktman Asset Management Co. is an investment advisory firm that has served long-term oriented investors since 1992. The organization is 100% internally owned and is investment adviser to The Yacktman Fund and The Yacktman Focused Fund as well as separate accounts for taxable and tax-exempt organizations.

The firm seeks to be objective, patient, and diligent in its investment approach. Yacktman Asset Management selects individual securities, analyzing investments from the bottom-up.

Donald Yacktman - Yacktman Focused’s fund positions as of Q4/2011 with actual share movements:

Sym - Stock
Portfolio Weight
Recent activity
Reported Price*
PEP - PepsiCo Inc.
12.5
Add 14.29%
$66.35
NWSA - News Corp.
12.09
Add 5.24%
$17.84
PG - Procter & Gamble
9.95
Add 8.57%
$66.71
MSFT - Microsoft Corp.
7.74
Add 24.59%
$25.96
BCR - Bard (C.R.) Inc.
4.92
Add 140.44%
$85.50
CSCO - Cisco Systems
4.78
Add 5.21%
$18.08
SYY - Sysco Corp.
3.84
Add 8.70%
$29.33
KO - Coca Cola Co.
3.59
0
$69.97
PFE - Pfizer Inc.
3.17
0
$21.64
USB - U.S. Bancorp
2.83
0
$27.05
VIA.B - Viacom Inc.
2.73
Add 21.05%
$45.41
JNJ - Johnson & Johnson
2.57
0
$65.58
AVP - Avon Products
2.42
Add 171.79%
$17.47
SYK - Stryker Corp.
2.41
Add 37.04%
$49.71
COP - ConocoPhillips
2.21
Add 9.43%
$72.87
HPQ - Hewlett-Packard
2.16
0
$25.76
APOL - Apollo Group
1.69
0
$53.87
CLX - Clorox Co.
1.65
Add 18.75%
$66.56
HRB - Block H&R
1.62
0
$16.33
WMT - Wal-Mart Stores
1.56
0
$59.76
BDX - Becton Dickinson
1.51
Add 67.39%
$74.72
CMCSA - Comcast Corp.
1.42
0
$23.56
GLW - Corning Inc.
1.29
Add 15.15%
$12.98
XOM - Exxon Mobil Corp.
1.22
0
$84.76
RIMM - Research In Motion Ltd.
1.2
Add 200.00%
$14.50
BK - Bank of New York
1.17
Add 25.00%
$19.91
COV - Covidien Plc.
0.94
Add 60.00%
$45.01
UNH - United Health Group Inc.
0.7
0
$50.68
GS - Goldman Sachs Group
0.59
Buy
$90.43
STT - State Street Corp.
0.58
Buy
$40.31
TYIDF - Toyota Industries Corp.
0.57
0
$27.23
NTRS - Northern Trust Corp.
0.57
Buy
$39.66
TSS - Total System Services
0.51
0
$19.56
CL - Colgate-Palmolive
0.48
0
$92.39
LINTA - Liberty Media Interactive
0.36
0
$16.22
PDCO - Patterson Cos. Inc.
0.33
Add 115.00%
$29.52
TBBK - The Bancorp Inc.
0.06
0
$7.23
REXI - Resource America Inc.
0.03
0
$4.76
NWS - News Corp. CL B
0.01
Buy
$18.16





Related Stock Ticker:
PEP, NWSA, PG, MSFT, BBCR, CSCO, SYY, KO, PFE, USB, VIA.B, JNJ, AVP, SYK, COP, HPQ, APOL, CLX, HRB, WMT, BDX, CMCSA, GLW, XOM, RIMM, BK, COV, UNH, GS, STT, TYIDF, TSS, CL, NTRS, LINTA, PDCO, TBBK, REXI, NWS

Donald Yacktman - Yacktman Focused Q3-2011 Fund Portfolio

Donald Yacktman - Yacktman Focused Q3-2011 Fund Investing Strategies By Dividend Yield – Stock Capital, Investment. Here is a current portfolio update of Donald Yacktman’s - Yacktman Focused - portfolio movements as of Q3/2011 (September 30, 2011). In total, he has 36 stocks with a total portfolio worth of USD 2,972,676,000.

Donald Yacktman - Yacktman Focused’s fund positions as of Q3/2011 with actual share movements:





Related Stock Ticker:
PEP, NWSA, PG, MSFT, CSCO, KO, SYY, PFE, JNJ, USB, BCR, VIA.B, HPQ, COP, SYK, CLX, WMT, HRB, APOL, CMCSA, GLW, XOM, AVP, BK, BDX, UNH, TYIDF, COV, RIMM, CL, TSS, LANC, LINTA, PDCO, TBBK, REXI