, founder of Yacktman Asset Management Co., bought two new stocks
in the fourth quarter: Dell (
) and IBM (
). Yacktman bought 14,912,159 shares of Dell at the average price
of $10 per share in the fourth quarter. Previously, he held a
position beginning in 2008, which he closed out in 2011.
Dell's stock has leapt 33 percent year to date, as talk
circulated and was later confirmed that the company would be
taken private while it transforms from a PC maker to services
provider. The deal was announced on Tuesday and is valued at $24
billion. It would also leave Dell with $15 billion in additional
According to the announcement, the company's founder and CEO,
Michel Dell, in partnership with private equity firm Silver Lake,
are acquiring the company for $13.65 per share in cash. The price
represented a 37 percent premium over the average closing price
for the previous 90 days.
Yacktman also bought a fractional amount of a recent
buy, IBM. Yacktman paid $195 each for 2,800 shares of the
company, whose price is near a 10-year high at $199 per share on
IBM has been growing revenue at a 5.5 percent rate over the past
five years, EBITDA at 11.3 percent, free cash flow at 13.4
percent and book value at 2.6 percent.
In 2011, it produced almost $107 billion in revenue, and $15.9
billion in earnings.
in his annual letter praised IBM CEOs Lou Gerstner and Sam
Palmisano for rescuing the company from the brink of bankruptcy
20 years ago and making it into a successful business today.
"Their financial management was equally brilliant," to their
"extraordinary" operational accomplishments, Buffett said,
"particularly in recent years as the company's financial
flexibility improved. Indeed, I can think of no major company
that has had better financial management, a skill that has
materially increased the gains enjoyed by IBM shareholders."
He was also impressed that the company consistently met its
five-year business goals, and believe it will do the same for its
2015 road map.
Currently IBM has a P/E ratio of 9.1, P/B ratio of 2.3 and P/S
ratio of 0.4.
has 63 stocks in the Yacktman Asset Management Co. portfolio,
which is valued at $16.68. See more of his fourth quarter updates
in the portfolio here. Also check out the undervalued stocks, top
growth companies and high yield stocks of Donald Yacktman.About
GuruFocus: GuruFocus.com tracks the stocks picks and portfolio
holdings of the world's best investors. This value investing site
offers stock screeners and valuation tools. And publishes daily
articles tracking the latest moves of the world's best investors.
GuruFocus also provides promising stock ideas in 3 monthly
newsletters sent to