Microsoft Corporation (MSFT), The Coca-Cola Co (KO), More: Donald Yacktman and Insiders Love These Stocks

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Scanning through the equity holdings of Donald Yacktman‘s Yacktman Asset Management as of the latest 13F reporting period, we studied his top holdings to pinpoint those which also saw sizable insider purchases over the last half-year. While two of these companies, namely The Coca-Cola Co (NYSE:KO) and Microsoft Corporation (NASDAQ:MSFT) occupied spots in the top quarter of his equity portfolio, the other two, ConocoPhillips (NYSE:COP) and Bank of New York Mellon Corp (NYSE:BK) were found a bit lower down the list.

Donald Yacktman

Yacktman Asset Management has about $30.5 billion worth of assets under management, with the market value of its equity portfolio standing at $24.12 billion at the end of the March quarter. The consumer staples sector accounted for 40% of those holdings. Founded in 1992 by Donald Yacktman, the fund is currently being managed by his son, Stephen Yacktman, who is the Chief Investment Officer. The fund’s investing philosophy is entrenched in value investing backed by rigorous research and bottom-up stock selection.

At Insider Monkey we follow hedge funds because our research has shown that their stock picks historically managed to generate alpha even though the filings are delayed up to 45 days. We used a 60-day delay in our back tests to be on the safe side. Our research showed that the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Total Return Index by an average of 95 basis points per month between 1999 and 2012. After adjusting for risk, our calculations revealed that these stocks’ monthly alpha was 80 basis points. We have also been sharing and tracking the performance of these stocks since the end of August 2012. These stocks returned 135% over the last 2.5 years, outperforming the S&P 500 ETF by nearly 80 percentage points (see more details here).

With a holding of 38.93 million shares valued at $1.58 billion, The Coca-Cola Co (NYSE:KO) was Yacktman’s third largest position. The company has received attention from two insiders, who are also the company’s directors: Marc J. Bolland, who acquired 10,000 shares at a unit price of $42.09 in February, and Richard M. Daley, who paid $42.43 for each of the 500 shares that he purchased in the same month. The Coca-Cola Co (NYSE:KO)’s stock has become even cheaper since then amid a 3.69% depreciation year-to-date. The beverage giant’s revenues peaked in 2012 at $48 billion, and stood at $47 billion in 2013 and $46 billion in 2014. As more consumers in developed countries are becoming diet conscious, The Coca-Cola Co (NYSE:KO) is aiming to drive its growth from emerging and developing markets. According to Muhtar Kent, the company’s CEO, India and Africa stand as bright prospects in that regard. Legendary value investor Warren Buffett owns a major stake in the company through his holding company Berkshire Hathaway, amounting to 400 million shares at the end of the fourth quarter. Perhaps in an attempt to assuage the concerns of its stakeholders, The Coca-Cola Co (NYSE:KO) brought Buffett on to the stage at its annual meeting last month, with him praising the efforts of the company’s management.

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