Portfolio Managers Alex Fitch and Mike Nicolas discuss how the firm defines value investing, its idea generation and research process, and how to estimate mid-cycle earnings, among other topics during an interview on “The JRo Show.”
The holdings mentioned comprise the following percentages of equities and equivalents as of 01/31/2024:
| Security | Oakmark Fund | Oakmark Select | Oakmark Equity and Income |
|---|---|---|---|
| Alphabet Cl A | 3.2% | 6.6% | 2.9% |
| Amazon.com | 1.2% | 0% | 1.4% |
| American Express | 2.4% | 3.6% | 0% |
| CBRE Group Cl A | 2.1% | 7.2% | 0% |
| Charles Schwab | 2.0% | 5.2% | 1.3% |
| First Citizens Bcshs Cl A | 1.4% | 6.1% | 0% |
| Lithia Motors | 0% | 6.3% | 1.4% |
| Masco | 1.7% | 0% | 1.4% |
| Meta Platforms Cl A | 1.3% | 0% | 0% |
| Salesforce | 1.8% | 4.0% | 0% |
Portfolio holdings are not intended as recommendations of individual stocks and are subject to change. The Funds disclaim any obligation to advise shareholders of such changes. Information about portfolio holdings does not represent a recommendation or an endorsement to Fund shareholders or other members of the public to buy or sell any security contained in the Funds’ portfolios. Portfolio holdings are current to the date listed but are subject to change any time. There are no assurances that the securities will remain in the Funds’ portfolios after the date listed or that the securities that were previously sold may not be repurchased.
Access the full list of holdings for the Oakmark Fund here.
Access the full list of holdings for the Oakmark Select Fund here.
Access the full list of holdings for the Oakmark Equity and Income Fund here.
The information, data, analyses, and opinions presented herein (including current investment themes, the portfolio managers’ research and investment process, and portfolio characteristics) are for informational purposes only and represent the investments and views of the portfolio managers and Harris Associates L.P. as of the date written and are subject to change and may change based on market and other conditions and without notice. This content is not a recommendation of or an offer to buy or sell a security and is not warranted to be correct, complete or accurate.
Certain comments herein are based on current expectations and are considered “forward-looking statements”. These forward looking statements reflect assumptions and analyses made by the portfolio managers and Harris Associates L.P. based on their experience and perception of historical trends, current conditions, expected future developments, and other factors they believe are relevant. Actual future results are subject to a number of investment and other risks and may prove to be different from expectations. Readers are cautioned not to place undue reliance on the forward-looking statements.
The price to earnings ratio (“P/E”) compares a company’s current share price to its per-share earnings. It may also be known as the “price multiple” or “earnings multiple”, and gives a general indication of how expensive or cheap a stock is. Investors should not base investment decisions on any single attribute or characteristic data point.
Dividend Yield is a stock’s expected annual dividend divided by the stock’s price at the indicated date, expressed as a percentage.
EBIT is a measure of a firm’s profit that includes all expenses except interest and income tax expenses. It is the difference between operating revenues and operating expenses.
GAAP (generally accepted accounting principles).
The Oakmark Fund’s portfolio tends to be invested in a relatively small number of stocks. As a result, the appreciation or depreciation of any one security held by the Fund will have a greater impact on the Fund’s net asset value than it would if the Fund invested in a larger number of securities. Although that strategy has the potential to generate attractive returns over time, it also increases the Fund’s volatility.
Because the Oakmark Select Fund is non-diversified, the performance of each holding will have a greater impact on the Fund’s total return, and may make the Fund’s returns more volatile than a more diversified fund.
Oakmark Select Fund: The stocks of medium-sized companies tend to be more volatile than those of large companies and have underperformed the stocks of small and large companies during some periods.
The Oakmark Equity and Income Fund invests in medium- and lower-quality debt securities that have higher yield potential but present greater investment and credit risk than higher-quality securities. These risks may result in greater share price volatility. An economic downturn could severely disrupt the market in medium or lower grade debt securities and adversely affect the value of outstanding bonds and the ability of the issuers to repay principal and interest.
The Oakmark Equity and Income Fund’s portfolio tends to be invested in a relatively small number of stocks. As a result, the appreciation or depreciation of any one security held by the Fund will have a greater impact on the Fund’s net asset value than it would if the Fund invested in a larger number of securities. Although that strategy has the potential to generate attractive returns over time, it also increases the Fund’s volatility.
Oakmark Equity and Income Fund: The stocks of medium-sized companies tend to be more volatile than those of large companies and have underperformed the stocks of small and large companies during some periods.
Investing in value stocks presents the risk that value stocks may fall out of favor with investors and underperform growth stocks during given periods.
