Yacktman Says Microsoft `Dirt Cheap,' Viacom, ConocoPhillips Attractive

Donald Yacktman, whose $2.3 billion Yacktman Fund has outperformed 97 percent of funds with similar objectives over the past five years, said he likes shares of Microsoft Corp., Viacom Inc. and ConocoPhillips.

Microsoft “is dirt-cheap,” Yacktman, whose fund has posted an annualized return of 7.2 percent since mid-2005, said today in an interview on Bloomberg Television. “The wind continues to blow to a large degree at their back.”

The world’s largest software maker has fallen 17 percent since its 2010 peak on April 22 while the Standard & Poor’s 500 Index has dropped 8.9 percent. The Redmond, Washington-based company posted record fourth-quarter revenue on July 23 after the most successful debut of its flagship operating system. The stock rose 0.3 percent to $26.03 at 4 p.m. New York time today.

Viacom, which has the Jersey Shore reality TV series on its network, “is still relatively cheap,” said the founder of Yacktman Asset Management Co. “The real pieces of this company are the stable pieces of Nickelodeon, Comedy Central and MTV. In total the viewership at Viacom represents about 20 percent of cable TV so that’s a huge share.”

Viacom, based in New York and controlled by Chairman Sumner Redstone, has gained 11 percent this year. The Class B shares gained 0.2 percent to $32.94 today.

ConocoPhillips, the U.S. oil company which is in the middle of a $10 billion asset-sale program, “is a very cheap stock,” Yacktman said. “Once the economy heats up, I think we’re going to see oil prices heading north.”

The company, which plans to sell its entire 20 percent stake in Russia’s OAO Lukoil, has fallen 8.6 percent since May 3. The stock rose 1.2 percent to $54.56 today.

To contact the reporter on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net.

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