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Value Investing Guru Donald Yacktman Propelled to Strong Q1 by Top Picks

#4. The Coca-Cola Co (NYSE:KO)

 – Shares Owned by Value-Oriented Yacktman (as of December 31): 19.92 Million

 – Value of Yacktman’s Holding (as of December 31): $855.68 Million

 – Q1 Return: 8.8%

Mr. Yacktman and his team reduced their firm’s exposure to The Coca-Cola Co (NYSE:KO) by 4.97 million shares during the December quarter. The 19.92 million-share stake owned by Yacktman Asset Management was worth $855.68 million at year-end. The shares of the world’s largest beverage company have recently touched a new all-time high, after gaining 12% over the past 12 months despite Coca-Cola’s top-line results being on a decline for the past several years, mainly due to currency exchange headwinds. The company’s consolidated net operating revenue declined to $44.29 billion in 2015 from $46.00 billion in 2014 and $46.85 billion in 2013. The impact of foreign currency fluctuations contributed to decreasing the 2015 top-line figure by roughly 7%. Meanwhile, the owner of four of the world’s top five non-alcoholic sparkling beverage brands sold 29.2 billion units of its products (a unit case equals 24 eight-ounce servings) in 2015, up from 28.6 billion in 2014 and 28.2 billion in 2013. More importantly, analysts believe that Coca-Cola’s bottom-line growth will accelerate in the coming years as foreign currency headwinds are easing. There were 51 hedge funds tracked by Insider Monkey with long positions in the beverage company at the end of 2015, which had accumulated nearly 11% of its outstanding shares. Ray Carroll’s Breton Hill Capital upped its stake in Coca-Cola by 27% during the first quarter of 2016 to 11,695 shares.

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#3. Twenty-First Century Fox Inc. (NASDAQ:FOXA)

 – Shares Owned by Value-Oriented Yacktman (as of December 31): 38.67 Million

 – Value of Yacktman’s Holding (as of December 31): $1.05 Billion

 – Q1 Return: 3.2%

The Texas-based hedge fund owned 38.67 million shares of Twenty-First Century Fox Inc. (NASDAQ:FOXA) at the end of December, after cutting its stake in the company by 1.94 million shares during the quarter. The year-end stake was valued at $1.05 billion on December 31 and constituted almost 8% of Mr. Yacktman’s equity portfolio. The diversified global media and entertainment company’s revenue for the six months that ended December 31 was $13.45 billion, down from $15.94 billion reported for the same period of the prior year. The decrease mainly reflects the sale of the Direct Broadcast Satellite Television (DBS) businesses in November 2014. The DBS segment consisted of operations related to Sky Italia and Sky Deutschland AG. Excluding the DBS businesses, Twenty-First Century’s revenue for the six months that ended December 31 decreased by 3% year-over-year due to lower content revenue. The hedge fund sentiment towards Fox dropped in the fourth quarter of 2015 as the number of funds invested in the company decreased to 50 from 56 quarter-over-quarter. While it gained just 3.2% in the first quarter, a strong second quarter has pushed the stock to gains of almost 10% in value since the beginning of 2016. Jeffrey Ubben’s ValueAct Capital was the owner of 47.33 million shares of Twenty-First Century Fox Inc. (NASDAQ:FOXA) at the end of December.

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