The AI stock crash on November 5 has once again reminded investors to stop chasing the hype and go back to the basics. The Nasdaq entered a correction. AI stocks fell on fears that Democrats will limit new data centers, after the midterm elections.
For months, wise investors kept warning that the AI bubble could burst, and many said it might happen after the midterm elections. We warned about it too, just two days before the November 5 crash, and pointed investors to Warren Buffett’s picks in our list of the 10 best Warren Buffett stocks with upside potential. Check the Buffett list here.
It is time to look at another legendary value investor, Donald Yacktman. He founded Yacktman Asset Management in 1992, and Morningstar named him Portfolio Manager of the Year in 1991. His son Stephen Yacktman now leads the firm as chief investment officer. AMG Yacktman Fund (YACKX) returned 25.07% over the 12 months through October 31, 2026, and it has returned 10.84% a year since its launch in July 1992.
Yacktman looks for three things: a good business, good management and a good price. The price comes first, because he says no investor admits to buying overpriced stocks. He likes companies that need little capital and sell products people buy in any economy, since those companies earn high returns on the assets they own. He also studies what management does with the company’s cash, because past behavior is the best guide to future behavior. He stopped trying to predict interest rates and the economy, and he focuses on great businesses at good prices.
Yacktman has company among veteran value investors. Mario Gabelli built his record by finding a company’s private market value and the catalysts that could unlock it. We ranked the top holdings of his fund in our list of the 10 best stocks to buy according to billionaire Mario Gabelli’s fund. See the full Gabelli list here.
Methodology
To compile our list of 10 value stocks Donald Yacktman’s investment firm is buying, we examined Yacktman Asset Management’s third-quarter 2026 13F portfolio, which disclosed approximately $8.38 billion in holdings across 75 securities as of September 30. We focused on the firm’s 30 largest holdings and selected 10 established companies outside the AI-focused investment theme in which it increased its share count during the quarter. We prioritized businesses with positive earnings, relatively modest forward price-to-earnings (P/E) ratios, and positive projected earnings-per-share (EPS) growth for the next fiscal year. We used valuation estimates available around late October and early November 2026, rather than valuations at the time of the purchases. The stocks are ranked in ascending order of Yacktman Asset Management’s reported stake value as of September 30, 2026, with the largest holding appearing at number one.
You can see the top 5 stocks in our video by clicking the image below.
10. Northrop Grumman Corporation (NYSE: NOC)
Yacktman Asset Management’s Stake Value: $96.22 Million
Forward P/E Ratio: 18.13x
Estimated Next-Year EPS Growth: 0.48%
Northrop Grumman Corporation (NYSE: NOC) is a major American defense contractor specializing in aerospace systems, military aircraft, missile defense, space technology, and advanced weapons systems. The company generates substantial revenue from long-term government contracts, particularly with the US Department of Defense. Its established position in military aerospace and national security programs provides a degree of revenue visibility that is uncommon in many other industries.
According to the third-quarter 2026 portfolio data, Yacktman Asset Management held 199,021 shares of Northrop Grumman worth approximately $96.22 million as of September 30. The investment firm increased its position by 0.76% during the quarter.
Northrop Grumman builds the B-21 bomber and the Sentinel missile for the US Air Force. Both programs are moving from development into production, which keeps work flowing for years. The company’s backlog stands at a record and is more than twice its annual sales. In its recent quarterly results, sales at the Aeronautics segment grew 14% from the same quarter a year earlier. Management expects 2027 sales to grow 5% to 7%.
Democrats won both chambers of Congress in the midterm elections and will control appropriations starting in January. They could use spending talks to hold down President Trump’s proposed increase in defense spending, Capital Economics said. Northrop shares fell as much as 5.3% the day after the election. The B-21 and Sentinel are multiyear commitments that are hard to reverse, but late budgets can still delay new contracts and production increases. Fixed-price contracts made up about half of Northrop’s 2025 sales, and the company pays when costs rise on them. It took a loss charge on the B-21 in 2025 and charges on two other programs earlier in 2026. Any of these could pressure Northrop Grumman shares.
Northrop raised its 2026 forecast and the stock still fell on cost worries at the GEM 63XL rocket motor and SiAW missile programs, so click to read why.
9. Sysco Corporation (NYSE: SYY)
Yacktman Asset Management’s Stake Value: $102.34 Million
Forward P/E Ratio: 14.62x
Estimated Next-Year EPS Growth: 9.5%
Sysco Corporation (NYSE: SYY) is one of the largest foodservice distributors in North America, supplying restaurants, hospitals, educational institutions, hotels, and other commercial customers. Its extensive distribution infrastructure, purchasing scale, and established customer relationships make it a major participant in the foodservice industry. The company operates in an essential but competitive market where profitability depends on sales volumes, distribution efficiency, and cost management.
Yacktman Asset Management held 1,312,701 shares of Sysco valued at approximately $102.34 million at the end of September 2026. The firm increased its share count by 1.48% during the third quarter. D.E. Shaw is a major Sysco shareholder and sees value in the company’s AI plans and the Restaurant Depot deal, so see the full D.E. Shaw thesis here.
Sysco is using AI to plan delivery routes so its trucks carry more cases per mile driven. In pilot regions, pieces delivered per mile rose 2% to 4%, and management is rolling the tool out across all US locations in fiscal 2027. The Jetro Restaurant Depot deal adds a cash-and-carry business, and management expects it to add to earnings in the first year after closing. Management recently reaffirmed its outlook for 9% to 11% growth in adjusted earnings per share in fiscal 2027.
8. Lockheed Martin Corporation (NYSE: LMT)
Yacktman Asset Management’s Stake Value: $110.54 Million
Forward P/E Ratio: 19.00x
Estimated Next-Year EPS Growth: 8.52%
Lockheed Martin Corporation (NYSE: LMT) is one of the world’s largest defense contractors, manufacturing military aircraft, missiles, helicopters, and space systems. Its major programs include the F-35 fighter jet and missile defense systems used by the US military and allied governments. The company’s long-term contracts and specialized defense technologies create substantial barriers to entry, although its performance remains tied to government spending, program execution, and procurement decisions.
Lockheed shares recently fell after Democrats won both chambers of Congress, which could make it harder to pass the defense spending increase the president wants. Costs on the F-35 Lot 20 contract have begun to exceed the funding the government has authorized, and the company says its results will suffer if more funding does not come. In the recently reported quarter, Aeronautics margin fell to 9.0% from 9.4% a year earlier. The stock trades at about 18.5 times forward earnings, a bit above its 5-year average of 17.9. Any of these could pressure Lockheed Martin shares.
At the end of the third quarter, Yacktman Asset Management owned 217,071 shares of Lockheed Martin valued at approximately $110.54 million. The firm increased its position by 0.33% during the quarter. Matrix Asset Advisors explained in its third-quarter 2026 investor letter why it was selling Lockheed Martin after strong performance, so read the full letter here.
7. Armstrong World Industries, Inc. (NYSE: AWI)
Yacktman Asset Management’s Stake Value: $122.92 Million
Forward P/E Ratio: 17.79x
Estimated Next-Year EPS Growth: 13.7%
Armstrong World Industries, Inc. (NYSE: AWI) manufactures ceiling systems, specialty walls, and architectural products used in commercial buildings, schools, hospitals, and other facilities. The company operates primarily in the North American building products market, where its established distribution channels, product offerings, and relationships with architects and contractors support its competitive position.
In its recently reported quarter, sales grew 12% from a year earlier, and Architectural Specialties grew 16% organically. Management raised its 2026 sales growth outlook to 10% to 11% from 9% to 11%, and it expects Architectural Specialties sales to grow 18% to 19% in 2026. Data center projects are a big driver of that demand, and the core ceiling business is raising prices, with average prices up 6% in the recently reported quarter from a year earlier.
Costs are rising fast. Management said freight and raw material inflation is the highest since 2022, and tariffs add to the pressure. It cut its 2026 adjusted EBITDA growth outlook to 8% to 10% from 9% to 12%. Free cash flow fell 13% in the recently reported quarter from a year earlier. The Parallel acquisition is also ramping slower than planned. If inflation keeps climbing, it could pressure Armstrong World Industries shares.
Yacktman Asset Management owned 759,082 shares of Armstrong World Industries worth approximately $122.92 million as of September 30, 2026. The firm increased its stake by 0.55% during the quarter. The London Company Small-Mid Cap Strategy highlighted Armstrong World Industries in its first-quarter 2026 investor letter as the company’s growth initiatives regained traction, so read their thesis here.
6. Tyson Foods, Inc. (NYSE: TSN)
Yacktman Asset Management’s Stake Value: $132.34 Million
Forward P/E Ratio: 14.59x
Estimated Next-Year EPS Growth: 9.6%
Tyson Foods, Inc. (NYSE: TSN) is one of America’s largest food producers, with operations spanning chicken, beef, pork, and prepared foods. Its portfolio includes well-known brands such as Tyson, Jimmy Dean, Hillshire Farm, and Ball Park. The company’s established brands, processing facilities, and distribution relationships give it a significant position in the US protein market, although earnings are sensitive to livestock supplies, feed costs, and commodity prices.
According to the third-quarter portfolio disclosure, Yacktman Asset Management held 2,618,960 shares of Tyson Foods worth approximately $132.34 million. The firm increased its position by 1.55% during the quarter.
Tyson is facing some headwinds in the beef segment. It buys cattle from ranchers and turns them into beef. Cattle are scarce, so ranchers charge more for each animal. Beef prices have risen too, but not enough to cover that cost, so the beef business still loses money. Fewer cattle also leaves Tyson’s plants with less to process. In September, Tyson cut its fiscal 2026 outlook because of beef, and it now expects revenue to grow only 1.5% to 2.0%. Tyson reports its next quarterly results soon, and any further beef losses could pressure Tyson Foods shares.
Tyson cut its fiscal 2026 profit forecast twice in less than a month because of the cattle shortage, yet chicken, prepared foods and the beef restructuring could still support a recovery, so click to see the recovery case.
5. Elevance Health, Inc. (NYSE: ELV)
Yacktman Asset Management’s Stake Value: $133.06 Million
Forward P/E Ratio: 14.9x
Estimated Next-Year EPS Growth: 3.9%
Elevance Health, Inc. (NYSE: ELV) is one of the largest health insurance and healthcare services companies in the United States. It operates health plans under the Anthem brand and provides pharmacy benefit management, behavioral health, and other healthcare services through its Carelon businesses. Its scale and diversified operations provide a substantial position in the US healthcare market, although medical cost trends and changes in government insurance programs can significantly affect profitability.
Yacktman Asset Management held 342,222 shares of Elevance Health valued at approximately $133.06 million at the end of September. The investment firm increased its holdings by 0.66% in the third quarter.
Elevance Health rose after Democrats won both chambers of Congress in the Nov. 3 midterm elections. Bulls believe the win helps because Elevance sells health plans in Medicaid and the Obamacare marketplace. A Democratic Congress could delay the Medicaid cuts passed in 2025 and extend the subsidies that help people afford Obamacare plans. Both would help Elevance keep members.
The overall bull case goes beyond the election. Elevance is one of the largest health insurers in the US, and its profits are recovering after a weak start to 2026. In its recently reported quarterly results, medical costs took a smaller share of premiums than in the same quarter a year earlier.
Seth Klarman’s Baupost Group holds Elevance Health, which ranks third on our list of his value stock picks for 2026, so check the full breakdown here.
4. Ingredion Incorporated (NYSE: INGR)
Yacktman Asset Management’s Stake Value: $142.71 Million
Forward P/E Ratio: 8.20x
Estimated Next-Year EPS Growth: 7.4%
Ingredion Incorporated (NYSE: INGR) supplies ingredients used in food, beverages, pharmaceuticals, and other consumer products. Its products include starches, sweeteners, and specialty ingredients used by manufacturers around the world. The company’s established customer relationships and broad ingredients portfolio provide exposure to recurring demand from food and beverage producers, although profitability can fluctuate with raw material costs, product mix, and manufacturing expenses.
In its recently reported quarterly results, the company missed analyst estimates. In that quarter, revenue fell 1.6% from the same quarter a year earlier, and the company gave a full-year 2026 profit outlook below what analysts expected.
Bulls still like the stock because its customers include store brands, such as a supermarket’s own cereal or soda. When shoppers have less money and switch from name brands to cheaper store brands, those store brands still need Ingredion’s ingredients, so its sales hold up. Store brands make up 15% to 20% of its US business, and 40% to 45% in Europe.
According to its September 30 portfolio, Yacktman Asset Management owned 1,489,551 shares of Ingredion worth approximately $142.71 million. The firm increased its stake by 1.23% during the quarter. Ingredion is one of the best undervalued defensive stocks for 2026, and Benchmark started coverage earlier this year with a Buy rating, so check the rating details here.
3. The Walt Disney Company (NYSE: DIS)
Yacktman Asset Management’s Stake Value: $145.64 Million
Forward P/E Ratio: 15.22x
Estimated Next-Year EPS Growth: 8.11%
The Walt Disney Company (NYSE: DIS) is a global entertainment company with operations spanning theme parks, streaming services, film production, television, and consumer products. Its portfolio of entertainment franchises includes Disney, Pixar, Marvel, and Star Wars. These brands support multiple revenue streams, including theatrical releases, streaming, merchandise, and theme park attractions, although the decline of traditional television and substantial content investments remain challenges.
Bulls believe Disney is in a stronger position than its stock price shows, because the company is getting leaner while its main growth engine keeps expanding. The new CEO is cutting costs across the company, including about 1,700 job cuts, and those savings should lift profit margins in the coming quarters.
The growth engine is Disney’s parks and cruise business. It has launched two new ships over the past year and plans five more by 2030. Guests book these trips years in advance and spend heavily on them, so the business grows steadily as capacity grows.
At the end of the third quarter, Yacktman Asset Management held 1,388,410 shares of Disney valued at approximately $145.64 million. The firm increased its position by 0.90% during the quarter. Trump’s portfolio added Disney in three recent buys, and the stock ranks first on our list of the top 10 stocks in Trump’s latest portfolio, so click to see if it is time to buy.
2. Broadridge Financial Solutions, Inc. (NYSE: BR)
Yacktman Asset Management’s Stake Value: $150.15 Million
Forward P/E Ratio: 16.91x
Estimated Next-Year EPS Growth: 9.9%
Broadridge Financial Solutions, Inc. (NYSE: BR) provides investor communications, proxy processing, trading technology, and other infrastructure services to financial institutions. Its clients include banks, brokerages, asset managers, and public companies. The company’s technology and communications platforms are deeply integrated into financial industry operations, supporting recurring revenue and relatively high customer switching costs.
Broadridge Financial Solutions, Inc. provides investor communications and trade processing systems to banks, brokers and asset managers. In its recently reported quarter, recurring revenue rose 11% in constant currency from the same quarter a year earlier, and the company reaffirmed its fiscal 2027 adjusted EPS growth target of 8% to 12%. Adjusted EPS grew 3% in that quarter from a year earlier, because the year-earlier quarter had record event-driven revenue.
Bulls see a long runway because Broadridge is moving into tokenization. It will provide the governance layer for the New York Stock Exchange’s planned tokenized equity marketplace, and it signed a governance deal with Kraken. If trading moves onto new platforms, issuers will still need governance and transfer agency services.
Yacktman Asset Management held 932,042 shares of Broadridge valued at approximately $150.15 million as of September 30, 2026. The investment firm increased its position by 6.09% during the quarter, one of the larger percentage additions among the ten companies on this list.
SouthernSun Asset Management said in its second-quarter 2026 investor letter that Broadridge fell on concerns about AI disruption and tokenized equities, so open the full letter here.
1. PepsiCo, Inc. (NASDAQ: PEP)
Yacktman Asset Management’s Stake Value: $265.74 Million
Forward P/E Ratio: 15.91x
Estimated Next-Year EPS Growth: 2.56%
PepsiCo, Inc. (NASDAQ: PEP) is one of the world’s largest food and beverage companies, with brands including Pepsi, Gatorade, Lay’s, Doritos, Quaker, and Cheetos. PepsiCo’s forward P/E ratio of approximately 15.91x and estimated next-year EPS growth of 2.56% suggest a mature business trading at a relatively moderate earnings valuation, rather than a high-growth investment. Its globally established brands and recurring consumer demand are among the characteristics that may appeal to investors seeking established businesses outside the AI sector.
PepsiCo has raised its dividend for at least 50 years in a row, and its free cash flow per share has moved back above the dividend payment.
The company is also adding healthier brands such as Poppi, Siete and Quaker, which helps it keep up with changing eating habits. Bulls expect earnings to recover as the cost cuts show up in profits and the new brands grow.
PepsiCo was the largest holding among the ten stocks selected for this article. Yacktman Asset Management owned 2,097,084 shares of the company worth approximately $265.74 million as of September 30, representing 3.17% of its reported portfolio. The investment firm increased its PepsiCo position by 1.17% during the third quarter of 2026.
PepsiCo’s dividend looks strong, but one of our recent pieces argues the stock still needs a turnaround, so see the full argument here.
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