The 5 most profitable titles


Brian Yacktman, our next Value Investing Live guest, is the President and Chief Investment Officer of YCG LLC, which he founded in 2007 in Austin, TX. YCG is an active management company that has seen its assets grow from $ 1 million to nearly $ 1.3 billion as of September 30, 2021, while achieving unmatched performance since its inception. YCG offers separate account management and is the advisor to the YCG Enhanced Fund (YCGEX).

YCG seeks to invest in global champions, believing that the key to successful investing is to compound capital at high rates of return for long periods of time. Based on this strategy, the company owns five participations which generated an estimated total gain of over 100%. These holdings include The Estée Lauder Companies Inc. (EL, financial), Nike Inc. (NKE, Financial), Equifax Inc. (EFX, financial), Mastercard Inc. (MY, financial) and MSCI Inc. (MSCI, Financial).

Estee Lauder

The firm Estée Lauder (EL, Financial) was first created in the first quarter of 2017 with the purchase of 43,670 shares. The holding flourished to 121,325 shares at the start of 2020, but has slowly been reduced to 93,263 shares. The company maintained an average price paid per share of $ 133.38 and the holding company achieved a respectable estimated total gain of 149.38%.

Estée Lauder is the world leader in the global prestige beauty market, present in the categories of skin care (58% of sales for fiscal year 2021), make-up (26%), perfumes (12%) and hair care (4%), with popular brands such as Estée Lauder, Clinique, MAC, La Mer, Jo Malone, Aveda, Bobbi Brown, Too Faced, Origins, Dr. Jart + and The Ordinary. The company operates in 150 countries, with 23% of FY2021 revenue coming from the Americas, 43% from Europe, the Middle East and Africa, and 34% from Asia-Pacific.

On November 9, the stock was trading at $ 346.89 per share with a market cap of $ 124.94 billion. According to the GF Value Line, the stock is trading at a significantly overvalued rating.

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GuruFocus gives the company a financial strength rating of 5 out of 10, a profitability rating of 9 out of 10, and a valuation rating of 1 out of 10. There are currently two serious warning signs for more growing assets. fast as revenues and a declining gross. margin. Despite the warning signs, the company’s stellar profitability rank is supported by operating and net margins that beat at least 89% of industry competitors.

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The other main guru shareholders of Estée Lauder (EL, financial) include

Baillie Gifford (professions, portfolio),

Spiros Segalas (Trades, Portfolio), Pioneer Investments,

Daniel loeb (trades, portfolio) and

Ray dalio (trades, portfolio).

Nike

A long-term stake in Nike (NKE, Financial) has also done exceptionally well in the company’s portfolio. The holding was established in 2015 and has seen steady additions until 2018. Over the past three years, the holding has slowly shrunk to 331,721 shares and the company has maintained an average purchase price of 59.02 $ per share. Overall, the company’s sixth-largest stake has an estimated total gain of 155.18%.

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Nike is the world’s largest sportswear and footwear brand. It designs, develops and markets sports clothing, footwear, equipment and accessories in six major categories: running, basketball, soccer, training, sportswear and Jordan. The shoe generates about two-thirds of its sales. Nike brands include Nike, Jordan and Converse (casual shoes). Nike sells its products around the world and subcontracts its production to more than 300 factories in more than 30 countries. Nike was founded in 1964 and is headquartered in Beaverton, Oregon.

As of November 9, the stock was trading at $ 172.94 per share with a market cap of $ 273.22 billion. The stock is trading at a significantly overvalued rating according to the GF Value Line.

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GuruFocus gives the company a financial strength rating of 6 out of 10, a profitability rating of 9 out of 10 and a valuation rating of 1 out of 10. There are currently two serious warning signs for more growing assets. faster than revenues and operating decline. margin. The company’s cash flow was hit in 2020, but quickly hit a 10-year high this year.

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Nike (NKE, Financial) the shares are also held by

Ken fisher (professions, portfolio),

Frank sands (Trades, Portfolio), Pioneer Investments,

Spiros Segalas (trades, portfolio) and

Jim simons (businesses, portfolio) ‘Renaissance Technologies.

Equifax

One of the company’s smaller holdings, Equifax (EFX, Financial) also performed well in the equity portfolio. It has been living in the wallet since late 2013 and has seen small changes sporadically over the years. An average price paid per share of $ 67.60 is well below the company’s current share price and has given YCG an impressive gain of 228.57%.

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With Experian (LSE: EXPN, financial) and TransUnion (UTR, Financial), Equifax is one of the major credit bureaus in the United States. Equifax credit reports provide credit histories on millions of consumers, and the company’s services are essential to lenders’ credit decisions. Additionally, about a third of its revenue comes from Workforce Solutions, which provide income verification and human resources services to employers. Equifax generates over 20% of its revenue outside of the United States.

The stock was trading at $ 288.33 per share with a market cap of $ 35.23 billion on November 9. The stock has been given a considerably overrated rating by the GF Value Line.

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GuruFocus gives the company a financial strength rating of 4 out of 10, a profitability rating of 7 out of 10 and a valuation rating of 1 out of 10. There are currently two serious warning signs for more growing assets. fast as revenues and a declining gross. margin. The company’s cash-to-debt ratio of 0.37 ranks lower than 67.97% of industry competitors thanks to the increase in debt over the past two years.

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Al gore (Trades, Portfolio), Simons’ firm, Pioneer Investments,

Tom gayner (trades, portfolio) and

Robert olstein (Trades, Portfolio) also maintain positions in Equifax (EFX, Financial).

MasterCard

The company’s Mastercard (MY, Financial), its fourth-largest position, comes just ahead of Equifax as the second-most profitable position. The 173,898 shares were purchased at an average price of $ 83.32 over the past eight years of ownership. Since 2016, the holding company has slowly shrunk despite several small additions. With an estimated total gain of 234.78%, the stake recorded exceptional performance in YCG’s equity portfolio.

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Mastercard is the second largest payment processor in the world, processing $ 4.8 trillion in purchase transactions in 2020. Mastercard operates in more than 200 countries and processes transactions in more than 150 currencies.

On November 9, the stock was trading at $ 344.36 per share with a market cap of $ 336.87 billion. According to the GF Value Line, the stock trades at fair value.

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GuruFocus gives the company a financial strength rating of 5 out of 10, a profitability rating of 9 out of 10, and a review rating of 1 out of 10. There is currently a serious warning sign that assets are growing more. quickly as income. The company’s revenue and net profit were down until 2019, but were hit in 2020 during the pandemic.

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Mastercard (MY, Financial) the shares are also held by

Chuck akre (professions, portfolio),

Warren Buffett (professions, portfolio),

Ken fisher (Trades, Portefeuille), Pioneer Investments and

Tom russo (trades, portfolio).

MSCI

The MSCI (MSCI, financial). Over the past eight years of ownership, the company has consistently sold stocks alongside rising stock prices. The holding currently consists of 108,259 shares which were purchased at an average price of $ 49.68.

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MSCI describes its mission as enabling investors to build better portfolios for a better world. MSCI’s largest and most profitable segment is its index segment, where it provides benchmarking to asset managers and asset owners. In addition, it claims more than $ 1,000 billion in exchange-traded fund assets linked to the MSCI indices. The MSCI Analysis segment provides portfolio management and risk management analysis software to asset managers and asset owners.

As of November 9, the stock was trading at $ 651.30 per share with a market cap of $ 53.79 billion. According to the GF Value Line, the stock is trading at a significantly overvalued rating.

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GuruFocus gives the company a financial strength rating of 4 out of 10, a profitability rating of 9 out of 10 and a review rating of 1 out of 10. There are currently no serious warning signs for the company. business. Return on invested capital has increased steadily over the past six years and can easily support the weighted average cost of capital.

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The main gurus shareholders of MSCI (MSCI, financial) include

Ron baron (professions, portfolio),

Ken fisher (Trades, Portfolio), Pioneer Investments,

Tom gayner (trades, portfolio) and

Mario gabelli (trades, portfolio).

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