TORONTO – Donald Yacktman, whose $19 billion mutual fund firm has outperformed peers by picking undervalued stocks, is leading a rush of investors betting Research In Motion and its BlackBerry smartphone can recover.
Yacktman Asset Management bought 12.2 million RIM shares last quarter, doubling the firms stake to about $252 million, according to data compiled by Bloomberg. Yacktman sees value in the BlackBerrys 80 million users worldwide, its physical keyboard and the promise of a new operating system, even as the phones U.S. market share drops to less than 2 percent from 8.5 percent a year ago.
People do like to use the keyboard, and there is a big embedded base, Yacktman said in a telephone interview from Austin, Texas. This company could be worth a lot more.
His increased investment may have made Yacktman $30 million to $54 million as of last Tuesdays close, given he bought the stock between the quarterly highs and lows of $6.31 and $8.29.
Yacktman doesnt disclose the exact day on which he buys or sells a stock. RIM has climbed 70 percent since Sept. 24, when the most recent rally began.
Yacktman relies more than peers on picking individual stocks rather than indexes, a strategy that helped his firm outperform other mutual funds in the longest economic slump since the Great Depression. The $7.1 billion Yacktman Focused Fund has returned 12 percent over the past five years, putting it in the top 1 percent of comparable funds, data compiled by Bloomberg show.
The first BlackBerry 10 phones will go on sale in February, following a delay of more than a year. The lack of new models has made it harder for RIM to compete with Apples iPhone and devices that run Googles Android. RIM accounted for just 1.6 percent of U.S. smartphone sales during the 10-week period ended Oct. 28, research firm Kantar Worldpanel ComTech reported last week. That compares with 48 percent for Apple and 47 percent for Android.
Yacktmans firm increased its RIM stake to 4.5 percent by the end of last quarter, making it the fifth-largest shareholder, according to data compiled by Bloomberg. Fairfax Financial Holdings, founded by RIM board member Prem Watsa, is the biggest investor.