Donald Yacktman, whose $19 billion mutual-fund firm has outperformed 99 percent of its peers over the past five years, says he's cut his stake again in BlackBerry because it's too expensive given its prospects.
Yacktman Asset Management Co. sold 6.23 million shares in the quarter ended March 31, slashing its stake to 5.83 million shares, valued at $92.1 million as of Wednesday’s closing price, according to data compiled by Bloomberg. The Austin, Texas-based firm sold 11.4 million shares in the fourth quarter, following a third quarter of buying.
"When it got down to $7, it just looked like a good deal and at that price we were willing to invest a lot of money," Yacktman said in a phone interview. "When the stock was at $13, $14, it changed the matrix, so we reduced our holding dramatically."
Shares of the company, formerly known as Research In Motion Ltd., have climbed 80 percent in the past six months on optimism that its new lineup of phones can pull it out of a sales slump and win back market share lost to Apple Inc.'s iPhone and Samsung Electronics Co.'s lineup. BlackBerry shipped 1 million units of its new flagship Z10 phone last quarter, in line with analyst expectations.
After Yacktman's comments Thursday, the shares fell 0.6 percent to $15.70, reversing intraday gains.
The company has been dogged by reports about lackluster demand for the Z10 in recent weeks. The Waterloo, Ontario-based company has asked Canadian and U.S. regulators to investigate one analyst report that the Z10 was facing unusually high rates of customer returns.
"A company like BlackBerry -- where the outcomes, particularly the long-term outcomes, are so cloudy -- you leave a lot of latitude there," Yacktman said.
Yacktman relies more than peers on picking individual stocks rather than indexes, a strategy that helped his firm outperform other mutual funds during the economic slump. The Yacktman Focused Fund, with $9.2 billion in assets, has returned 14 percent over the past five years, putting it in the top 1 percent of comparable funds, data compiled by Bloomberg show.
Success with the new BlackBerry 10 operating system is probably the last chance the company has to avoid a sale or breakup of the company, Yacktman said.
"It’s third and long to some degree, but they might throw the touchdown pass," he said, using a football analogy. "If the attempt doesn’t work, they’ll probably end up punting and end up part of something else."
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