Yacktman Asset Management

#### I. Institutional Overview Donald Yacktman and his team at Yacktman Asset Management have long been regarded as paragons of the value investing discipline. As we dissect the 13F filing for the period ending **December 31, 2025 (Q4 2025)**, we are looking at a portfolio that manages approximately **$7.14 billion** in reported assets. This scale places Yacktman in the upper echelon of boutique value shops, where the focus is not on tracking an index but on the rigorous selection of individual businesses that exhibit high returns on capital, strong competitive moats, and, most importantly, are available at a "reasonable" price. The psychological portrait of Yacktman Asset Management this quarter is one of **calculated caution and tactical consolidation**. With **72 holdings**, the portfolio might seem diversified at first glance, but a closer look at the concentration levels reveals a high-conviction strategy. The top 10 holdings alone account for a significant portion of the total AUM, suggesting that while the firm keeps a "tail" of smaller positions for observation or diversification, its "ballast" is concentrated in a few dozen names they know intimately. Analyzing the scale trend, the reported value of **$7,143,813,208** represents the firm's footprint in a market that, by late 2025, has faced numerous macroeconomic crosscurrents. The fact that the firm maintains a portfolio of 72 stocks—a relatively stable number for them—indicates that they are not in a "panic selling" mode, nor are they "spraying and praying" with new capital. Instead, the data shows a very deliberate trimming of existing winners and a pivot toward liquidity and broad-market hedges. The "Yacktman Way" has historically favored companies with "sticky" products—things people buy regardless of the economic climate. This quarter’s data reinforces that identity. However, there is a subtle shift. The reduction in almost all top-tier holdings suggests the firm believes valuations in their core "quality" names may have reached a temporary ceiling. When a value manager trims their favorite names, it is rarely a sign of lost faith in the business; rather, it is a disciplined response to the narrowing "margin of safety." In summary, the institutional portrait for Q4 2025 is that of a **disciplined veteran preparing for volatility**. By reducing exposure to individual high-flyers and increasing positions in broad market ETFs and liquid instruments, Yacktman is signaling that the current market environment requires a more defensive posture. They are prioritizing the preservation of capital and the accumulation of "dry powder" over aggressive growth chasing. This is a firm that is comfortable sitting on the sidelines or moving into defensive shells when the risk-reward symmetry of individual stocks becomes unfavorable. #### II. Sector Allocation Analysis The sector allocation of Yacktman Asset Management provides a window into their macro-level thinking. By categorizing their $7.14B portfolio into specific industries, we can see where they are finding value and where they are retreating. | Sector | Weight (%) | Trend/Sentiment | | :--- | :--- | :--- | | **Consumer Staples** | 19.63 | Core Defensive Anchor | | **Communication Services** | 17.66 | Growth-Value Hybrid | | **Energy** | 15.32 | Inflation/Cyclical Hedge | | **Industrials** | 11.45 | Quality Cyclicals | | **Financials** | 10.78 | Interest Rate Sensitivity | | **Technology** | 10.66 | Selective Growth | | **Healthcare** | 6.53 | Defensive Growth | | **Materials** | 4.02 | Commodity Exposure | | **Consumer Discretionary** | 2.02 | Minimal Exposure | | **Utilities** | 1.93 | Defensive Yield | **2.1 Concentration and Macro Judgment** The top three sectors—**Consumer Staples (19.63%)**, **Communication Services (17.66%)**, and **Energy (15.32%)**—collectively represent **52.61%** of the total portfolio. This concentration level is moderate but telling. It shows a firm that is heavily anchored in "necessity" businesses (Staples and Energy) while maintaining a significant bet on the platforms that control modern information flow (Communication Services). The dominance of **Consumer Staples** is the hallmark of the Yacktman philosophy. With nearly 20% of the portfolio in this sector, the firm is betting on the pricing power of global brands like **PEP (PepsiCo)** and **PG (Procter & Gamble)**. In an environment where inflation might be persistent or consumer spending might be cooling, these companies act as a "ballast," providing steady dividends and earnings stability. **2.2 The Shift in Communication Services and Technology** At **17.66%**, Communication Services is the second-largest allocation. This is largely driven by massive positions in **Alphabet (GOOG)** and **Fox Corporation (FOX)**. This sector serves as a bridge between traditional value and modern growth. However, the firm’s decision to trim **FOXA** by over 20% and **WBD (Warner Bros. Discovery)** by over 75% suggests a cooling of sentiment toward the "content wars" and a preference for platform-based dominance over debt-heavy media conglomerates. **Technology**, at **10.66%**, is surprisingly low for a modern institutional portfolio but high for a "pure" value shop. This is almost entirely concentrated in **Microsoft (MSFT)** and **Cognizant (CTSH)**. The firm is not chasing the latest AI startups; they are holding the "toll booths" of the digital economy. **2.3 Energy: The Inflation Hedge** The **15.32%** allocation to Energy is a significant macro statement. Led by **CNQ (Canadian Natural Resources)**, this allocation suggests that Yacktman views the energy sector not just as a cyclical play, but as a fundamental necessity with a favorable supply-demand outlook. Even with a 10% reduction in CNQ this quarter, it remains the #1 holding, indicating that the firm still sees Energy as a premier source of free cash flow in the current economic cycle. **2.4 Financials and Industrials: The Economic Pulse** The combined **22.23%** in Financials and Industrials shows that Yacktman is not entirely defensive. They maintain exposure to the "plumbing" of the economy through **SCHW (Charles Schwab)** and the logistics/infrastructure space through **UHAL.B (U-Haul)** and **RS (Reliance, Inc.)**. However, the reduction in **State Street (STT)** and **Wells Fargo (WFC)** indicates a selective retreat from traditional banking in favor of specialized financial services. **2.5 Macroeconomic Inference** Based on this allocation, we can infer that Yacktman Asset Management is positioned for a **"Stagflationary" or "Low Growth" environment**. The heavy weight in Staples and Energy suggests a need for protection against rising costs and a slowing consumer. The reduction in high-beta tech and debt-heavy media suggests a move away from "cheap money" beneficiaries. They are favoring companies with "fortress balance sheets" and the ability to generate cash regardless of the Federal Reserve's interest rate path. #### III. Top 10 Holdings Deep Dive The top 10 holdings of Yacktman Asset Management represent the "conviction core" of the firm. In Q4 2025, a striking trend emerges: **every single one of the top 10 holdings was reduced.** This is a rare and powerful signal of institutional profit-taking or a broad-based move toward liquidity. **Table 3.1: Top 10 Holdings Detail** | Rank | Ticker | Company Name | Market Value | Weight (%) | Qtr Change | Weight Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 1 | CNQ | Canadian Natural Resources | $635.55M | 8.90 | -10.20% | -0.31 | | 2 | MSFT | Microsoft Corporation | $466.13M | 6.52 | -6.24% | -0.82 | | 3 | SCHW | The Charles Schwab Corp. | $393.30M | 5.51 | -6.15% | -0.01 | | 4 | FOX | Fox ---