01 Nov 2010 Yacktman - Q3 2010 Commentary ( Portfolio )
News Corp appreciated solidly during the quarter, though we think it remains extremely undervalued. Cable content has continued to deliver strong results, and for both the quarter and the year that segment grew pre-tax profits by more than 30%. Cable networks now represent approximately 50% of total pre-tax profits for News Corp. The company is currently negotiating for higher fees for its cable channels and The Fox Network, which we think could lead to a substantial increase in profits.

We added to our holdings in healthcare equipment companies during the quarter. Our medical device positions include Johnson & Johnson, CR Bard, Becton Dickinson, Stryker, and Covidien in both funds and a small position in Medtronic in The Yacktman Fund. These stocks have generally been under pressure due to concerns about the changes in the American healthcare system as well as a medical device excise tax that is due to begin in 2013. The medical device companies we own sell products that are necessary for treating an aging population around the world and generally posted solid growth through the recession. All of the companies sell at low multiples to cash flow and earnings.