, who engineers the long-term-focused
s, has updated his first quarter portfolio. Unsurprisingly for an
investor who thinks in half and full decades, his
featured low turnover of 5%, with two new stocks introduced:
Sigma Aldrich Corporation (
) and CH Robinson Worldwide Inc. (
returned 11.5% last year, compared to the S&P 500 Index's
16%, with its portfolio of what managers deem "extremely high
quality companies." The fund is still on track ahead of the
benchmark over the past 10 years with a 10.63% average annual
return compared to the index's 7.1%. It is the top-performing
mutual fund in its category for the past decade.
Donald Yacktman focuses on forward risk-adjusted rates of return
as well as price in his stock analysis. His team's best ideas are
concentrated in his largest positions, while less attractive
ideas take smaller fractions of investment capital. The two new
holdings have relatively small and medium-sized weightings within
Largest New Buy: CH Robinson Worldwide Inc. (
CH Robinson Worldwide's stock price declined for five straight
quarters in 2011 and 2012, and increased slightly when Yacktman
purchased in the first quarter. He bought 1.75 million shares at
an average price of $61. The position size represents 1.22% of
CH Robinson is a third party logistics provider, offering freight
transportation and logistics, outsource solutions, information
services and produce sourcing throughout North America, South
America, Europe, Asia and Australia. At $9.47 billion, the
company has the largest market cap of competitors in its sector.
CHRW shares have moved just over 2% in the last five years,
including a sharp 20% drop in February of the first quarter of
2013, when Yacktman initiated a position. On Feb. 5, when the
decline began, the company announced its financial results for
the quarter and full year ended Dec. 31, 2013.
CHRW announced a year-over-year fourth quarter and full-year
increase in revenue of 15.7%, to $2.97 billion, and 9.9%, to
$11.36 billion, respectively. Net income also increased 134.8%,
to $256.39 million, and 37.6%, to $593.8 million, in the same
Adjusted earnings missed expectations, however, causing the share
The company acquired Poland-based Apreo Logistics S.A. and
Chicago-based Phoenix International Freight Services Ltd. in the
fourth quarter. It also divested its payment services business,
T-Chek Systems, during the quarter. The recent acquisitions added
substantially to the company's financial results.
CHRW pays a dividend yield of 2.3%, close to a 10-year high. Its
P/E ratio of 16.4 is nearing its 10-year low, and its P/B ratio
of 6.49 is nearing its three-year low. The P/S ratio is 0.86.
Sigma-Aldrich Corporation (
Yacktman purchased 564,100 shares of Sigma-Aldrich Corp., equal
to 0.52% of his portfolio, at an average price of $77 in the
fourth quarter. SIAL's Friday share price of $76.41 is
approaching its 10-year high, possibly in part explaining why it
accounts for a modicum of Yacktman's portfolio.
Sigma-Aldrich is a life science and high technology company
creating buichemical and organic chemical products used in an
array of scientific fields and pharmaceuticals. It operates in 40
Over the last five years the company grew at the average annual
rate of 6.2% in revenue, 9.3% in EBITDA, 8.4% in free cash flow
and 17.2% in book value.
In 2012, Sigma-Aldrich sales were $2.6 billion, a 5% increase
from the previous year. Organic sales increased 3%, and
acquisitions contributed 5% to sales growth, as it offset weaker
demand in academic and pharma, and SAFC Hitech pricing challenges
during the year. Net income was $460 million, or $3.80 per
diluted share, increased slightly from $457 million, or $3.78 per
diluted share, the previous year. It was the 38
consecutive year of EPS growth for the company.
In 2012, the Asia Pacific and Latin America regions led its
global sales growth, while organic sales in China increased by
double digits from the previous quarter. North American sales
Sigma-Aldrich is expecting organic sales growth in the low-to-mid
single-digit range for 2013, and EPS, excluding any restructuring
or special charges, in the range of $4.10 to $4.20.
The company's dividend yield is 1.1%, just short of its two-year
high. Its P/B of 3.61 is close to its lowest level in a year,
while it's P/S of 3.5% is near its highest point in 10 years. The
company also has a P/E of 20.
See Donald Yacktman's portfolio here. Also check out the
Undervalued Stocks, Top Growth Companies, and High Yield stocks
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