Simply put - 74.3% in Technology, Health Care, and Consumer Goods and Services - $22.4B
Sector Allocation
As a diversified top-down investor, Grantham’s sector allocation probably carries more information than that of a concentrated bottom-up investor such as Bruce Berkowitz, Mohnish Pabrai. As of December 31, 2009, Grantham’s top sectors are Technology (24.6%), Health Care (22.8%), Consumer Goods (15.8%) and Consumer Services (11.1%). See table below:
| Industry | 2009-09-30 | 2009-12-31 |
|---|---|---|
| Technology | 23% | 24.6% |
| Financials | 5.2% | 5.9% |
| Utilities | 0.6% | 0.6% |
| Telecommunications | 2.9% | 2.9% |
| Consumer Services | 11.4% | 11.1% |
| Health Care | 23.4% | 22.8% |
| Consumer Goods | 17.1% | 15.8% |
| Industrials | 3.9% | 3.8% |
| Basic Materials | 1.2% | 1.6% |
| Oil & Gas | 9.3% | 8.8% |
Top Holdings
So what he means by “high quality stocks”? His top holdings may shine light on the question:
No. 1: Johnson & Johnson (JNJ), Weightings: 5.52% - 25,835,685 Shares> Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. Johnson & Johnson has a market cap of $175.06 billion; its shares were traded at around $63.45 with a P/E ratio of 13.7 and P/S ratio of 2.8. The dividend yield of Johnson & Johnson stocks is 3.1%. Johnson & Johnson had an annual average earning growth of 12.5% over the past 10 years. GuruFocus rated Johnson & Johnson the business predictability rank of 5-star.
Grantham increased his JNJ holding slightly during 4Q09.
No. 2: Microsoft Corp. (MSFT), Weightings: 5.27% - 52,120,871 Shares Microsoft develops, manufactures, licenses, and supports a wide range of software products for a multitude of computing devices. Microsoft Corp. has a market cap of $254.21 billion; its shares were traded at around $28.63 with a P/E ratio of 15.2 and P/S ratio of 4.3. The dividend yield of Microsoft Corp. stocks is 1.8%. Microsoft Corp. had an annual average earning growth of 10% over the past 10 years.
Grantham sold a very small percentage of his MSFT shares during 4Q09 (from 53.26 million shares to 52.12 million shares).
No. 3: Oracle Corp. (ORCL), Weightings: 5.05% - 62,059,737 Shares Oracle Corporation is one of the world's suppliers of software for information management. Oracle Corp. has a market cap of $124.13 billion; its shares were traded at around $24.77 with a P/E ratio of 17.2 and P/S ratio of 5.3. The dividend yield of Oracle Corp. stocks is 0.8%. Oracle Corp. had an annual average earning growth of 18.2% over the past 10 years. GuruFocus rated Oracle Corp. the business predictability rank of 3-star.
Grantham upped his holding in ORCL from 54.8 million shares to 62.1 million shares.
No. 4: WalMart Stores Inc. (WMT), Weightings: 4.88% - 27,512,308 Shares Wal-Mart Stores, Inc. is the world's largest retailer. Walmart Stores Inc. has a market cap of $205.45 billion; its shares were traded at around $53.92 with a P/E ratio of 14.7 and P/S ratio of 0.5. The dividend yield of Walmart Stores Inc. stocks is 2%. Walmart Stores Inc. had an annual average earning growth of 13.3% over the past 10 years. GuruFocus rated Walmart Stores Inc. the business predictability rank of 5-star.
Grantham increased his holding in WMT from 26.4 million to 27.5 million.
No. 5: Pfizer Inc (PFE), Weightings: 4.45% - 73,677,015 Shares Pfizer Inc is a research-based, global pharmaceutical company. Pfizer Inc has a market cap of $143.72 billion; its shares were traded at around $17.81 with a P/E ratio of 8.9 and P/S ratio of 2.9. The dividend yield of Pfizer Inc stocks is 4.1%. Pfizer Inc had an annual average earning growth of 11% over the past 10 years.
Grantham increased his position in PFE from 70.6 million shares to 73.7 million shares.
No. 6: The CocaCola Company (KO), Weightings: 4.08% - 21,549,930 Shares The Coca-Cola Company is the world's largest beverage company and is the producer and marketer of soft drinks. The Cocacola Company has a market cap of $127.82 billion; its shares were traded at around $55.16 with a P/E ratio of 18.1 and P/S ratio of 4.1. The dividend yield of The Cocacola Company stocks is 3%. The Cocacola Company had an annual average earning growth of 5.3% over the past 10 years. GuruFocus rated The Cocacola Company the business predictability rank of 2.5-star.
Grantham sold a tiny portion (0.25 million shares) of his KO shares.
Comments
Despite the fact Grantham owns a very diversified portfolio, his top holdings are very heavily weighted. As of December 31, 2009, he has filled his portfolio with blue chips in Technology, Health Care, Consumer Services, and Consumer Goods.
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