10 Best Value Stocks Legendary Investor Donald Yacktman Was Buying Before AI Crash Fahad Saleem Mon, November 9, 2026 at 9:20 AM EST 10 min read ^IXIC +2.35% NOC +1.80% SYY +1.52% LMT +2.08% AWI +2.93% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
The AI stock crash on November 5 has once again reminded investors to stop chasing the hype and go back to the basics. The Nasdaq entered a correction. AI stocks fell on fears that Democrats will limit new data centers, after the midterm elections.
For months, wise investors kept warning that the AI bubble could burst, and many said it might happen after the midterm elections. We warned about it too, just two days before the November 5 crash, and pointed investors to Warren Buffett's picks in our list of the 10 best Warren Buffett stocks with upside potential. Check the Buffett list here.
It is time to look at another legendary value investor, Donald Yacktman. He founded Yacktman Asset Management in 1992, and Morningstar named him Portfolio Manager of the Year in 1991. His son Stephen Yacktman now leads the firm as chief investment officer. AMG Yacktman Fund (YACKX) returned 25.07% over the 12 months through October 31, 2026, and it has returned 10.84% a year since its launch in July 1992.
Yacktman looks for three things: a good business, good management and a good price. The price comes first, because he says no investor admits to buying overpriced stocks. He likes companies that need little capital and sell products people buy in any economy, since those companies earn high returns on the assets they own. He also studies what management does with the company's cash, because past behavior is the best guide to future behavior. He stopped trying to predict interest rates and the economy, and he focuses on great businesses at good prices.
Yacktman has company among veteran value investors. Mario Gabelli built his record by finding a company's private market value and the catalysts that could unlock it. We ranked the top holdings of his fund in our list of the 10 best stocks to buy according to billionaire Mario Gabelli's fund. See the full Gabelli list here.
To compile our list of 10 value stocks Donald Yacktman's investment firm is buying, we examined Yacktman Asset Management's third-quarter 2026 13F portfolio, which disclosed approximately $8.38 billion in holdings across 75 securities as of September 30. We focused on the firm's 30 largest holdings and selected 10 established companies outside the AI-focused investment theme in which it increased its share count during the quarter. We prioritized businesses with positive earnings, relatively modest forward price-to-earnings (P/E) ratios, and positive projected earnings-per-share (EPS) growth for the next fiscal year. We used valuation estimates available around late October and early November 2026, rather than valuations at the time of the purchases. The stocks are ranked in ascending order of Yacktman Asset Management's reported stake value as of September 30, 2026, with the largest holding appearing at number one.
Yacktman Asset Management's Stake Value: $96.22 Million
Forward P/E Ratio: 18.13x
Estimated Next-Year EPS Growth: 0.48%
Northrop Grumman Corporation (NYSE: NOC) is a major American defense contractor specializing in aerospace systems, military aircraft, missile defense, space technology, and advanced weapons systems. The company generates substantial revenue from long-term government contracts, particularly with the US Department of Defense. Its established position in military aerospace and national security programs provides a degree of revenue visibility that is uncommon in many other industries.
According to the third-quarter 2026 portfolio data, Yacktman Asset Management held 199,021 shares of Northrop Grumman worth approximately $96.22 million as of September 30. The investment firm increased its position by 0.76% during the quarter.
Northrop Grumman (NYSE:NOC) builds the B-21 bomber and the Sentinel missile for the US Air Force. Both programs are moving from development into production, which keeps work flowing for years. The company's backlog stands at a record and is more than twice its annual sales. In its recent quarterly results, sales at the Aeronautics segment grew 14% from the same quarter a year earlier. Management expects 2027 sales to grow 5% to 7%.
Democrats won both chambers of Congress in the midterm elections and will control appropriations starting in January. They could use spending talks to hold down President Trump's proposed increase in defense spending, Capital Economics said. Northrop shares fell as much as 5.3% the day after the election. The B-21 and Sentinel are multiyear commitments that are hard to reverse, but late budgets can still delay new contracts and production increases. Fixed-price contracts made up about half of Northrop's 2025 sales, and the company pays when costs rise on them. It took a loss charge on the B-21 in 2025 and charges on two other programs earlier in 2026. Any of these could pressure Northrop Grumman (NYSE:NOC) shares.
Northrop raised its 2026 forecast and the stock still fell on cost worries at the GEM 63XL rocket motor and SiAW missile programs, so click to read why.
Yacktman Asset Management's Stake Value: $102.34 Million
Forward P/E Ratio: 14.62x
Estimated Next-Year EPS Growth: 9.5%
Sysco Corporation (NYSE: SYY) is one of the largest foodservice distributors in North America, supplying restaurants, hospitals, educational institutions, hotels, and other commercial customers. Its extensive distribution infrastructure, purchasing scale, and established customer relationships make it a major participant in the foodservice industry. The company operates in an essential but competitive market where profitability depends on sales volumes, distribution efficiency, and cost management.
Yacktman Asset Management held 1,312,701 shares of Sysco valued at approximately $102.34 million at the end of September 2026. The firm increased its share count by 1.48% during the third quarter. D.E. Shaw is a major Sysco shareholder and sees value in the company's AI plans and the Restaurant Depot deal, so see the full D.E. Shaw thesis here.
Sysco is using AI to plan delivery routes so its trucks carry more cases per mile driven. In pilot regions, pieces delivered per mile rose 2% to 4%, and management is rolling the tool out across all US locations in fiscal 2027. The Jetro Restaurant Depot deal adds a cash-and-carry business, and management expects it to add to earnings in the first year after closing. Management recently reaffirmed its outlook for 9% to 11% growth in adjusted earnings per share in fiscal 2027.
Yacktman Asset Management's Stake Value: $110.54 Million
Forward P/E Ratio: 19.00x
Estimated Next-Year EPS Growth: 8.52%
Lockheed Martin Corporation (NYSE: LMT) is one of the world's largest defense contractors, manufacturing military aircraft, missiles, helicopters, and space systems. Its major programs include the F-35 fighter jet and missile defense systems used by the US military and allied governments. The company's long-term contracts and specialized defense technologies create substantial barriers to entry, although its performance remains tied to government spending, program execution, and procurement decisions.
Lockheed shares recently fell after Democrats won both chambers of Congress, which could make it harder to pass the defense spending increase the president wants. Costs on the F-35 Lot 20 contract have begun to exceed the funding the government has authorized, and the company says its results will suffer if more funding does not come. In the recently reported quarter, Aeronautics margin fell to 9.0% from 9.4% a year earlier. The stock trades at about 18.5 times forward earnings, a bit above its 5-year average of 17.9. Any of these could pressure Lockheed Martin (NYSE:LMT) shares.
At the end of the third quarter, Yacktman Asset Management owned 217,071 shares of Lockheed Martin valued at approximately $110.54 million. The firm increased its position by 0.33% during the quarter. Matrix Asset Advisors explained in its third-quarter 2026 investor letter why it was selling Lockheed Martin after strong performance, so read the full letter here.
Yacktman Asset Management's Stake Value: $122.92 Million
Forward P/E Ratio: 17.79x
Estimated Next-Year EPS Growth: 13.7%
Armstrong World Industries, Inc. (NYSE: AWI) manufactures ceiling systems, specialty walls, and architectural products used in commercial buildings, schools, hospitals, and other facilities. The company operates primarily in the North American building products market, where its established distribution channels, product offerings, and relationships with architects and contractors support its competitive position.
In its recently reported quarter, sales grew 12% from a year earlier, and Architectural Specialties grew 16% organically. Management raised its 2026 sales growth outlook to 10% to 11% from 9% to 11%, and it expects Architectural Specialties sales to grow 18% to 19% in 2026. Data center projects are a big driver of that demand, and the core ceiling business is raising prices, with average prices up 6% in the recently reported quarter from a year earlier.
Costs are rising fast. Management said freight and raw material inflation is the highest since 2022, and tariffs add to the pressure. It cut its 2026 adjusted EBITDA growth outlook to 8% to 10% from 9% to 12%. Free cash flow fell 13% in the recently reported quarter from a year earlier. The Parallel acquisition is also ramping slower than planned. If inflation keeps climbing, it could pressure Armstrong World Industries (NYSE:AWI) shares.
Yacktman Asset Management owned 759,082 shares of Armstrong World Industries worth approximately $122.92 million as of September 30, 2026. The firm increased its stake by 0.55% during the quarter. The London Company Small-Mid Cap Strategy highlighted Armstrong World Industries in its first-quarter 2026 investor letter as the company's growth initiatives regained traction, so read their thesis here.
Yacktman Asset Management's Stake Value: $132.34 Million
Forward P/E Ratio: 14.59x
Estimated Next-Year EPS Growth: 9.6%
Tyson Foods, Inc. (NYSE: TSN) is one of America's largest food producers, with operations spanning chicken, beef, pork, and prepared foods. Its portfolio includes well-known brands such as Tyson, Jimmy Dean, Hillshire Farm, and Ball Park. The company's established brands, processing facilities, and distribution relationships give it a significant position in the US protein market, although earnings are sensitive to livestock supplies, feed costs, and commodity prices.
According to the third-quarter portfolio disclosure, Yacktman Asset Management held 2,618,960 shares of Tyson Foods worth approximately $132.34 million. The firm increased its position by 1.55% during the quarter.
Tyson is facing some headwinds in the beef segment. It buys cattle from ranchers and turns them into beef. Cattle are scarce, so ranchers charge more for each animal. Beef prices have risen too, but not enough to cover that cost, so the beef business still loses money. Fewer cattle also leaves Tyson's plants with less to process. In September, Tyson cut its fiscal 2026 outlook because of beef, and it now expects revenue to grow only 1.5% to 2.0%. Tyson reports its next quarterly results soon, and any further beef losses could pressure Tyson Foods (NYSE:TSN) shares.
Tyson cut its fiscal 2026 profit forecast twice in less than a month because of the cattle shortage, yet chicken, prepared foods and the beef restructuring could still support a recovery, so click to see the recovery case.
Click the image below to watch our video featuring the rest of the top 5 stocks in this list. Prefer reading? You can also click here to read the full article featuring the top 5 stocks.
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This article is originally published at Insider Monkey.
