Top fund manager Donald Yacktman is continuing to find the best values in high-quality companies, and has his long-term focus on companies with international exposure.

“Last quarter we wrote that many holdings had gone from ‘the exceptional to the more than acceptable,'” Yacktman’s firm states in its second-quarter letter. (Click here for a PDF copy of the letter.) “With the recent price declines, we think many of our top positions have moved back to offering exceptional potential over time.”

The letter (written by “The Yacktman Team”) says that many may find it surprising that Yacktman’s two funds have posted excellent long-term results focusing on such big, well-known firms as Coca-Cola, Pfizer, and Microsoft, which are heavily followed. “[But] we sleep well at night knowing that dominant, well capitalized companies purchased at attractive valuations should produce solid results over time, even in a world with an extreme amount of uncertainty,” it says. The firm says it is willing to look at lower quality firms — if they “project a meaningfully higher expected rate of return on the investment”. Right now, it says, “we think most of the best values are in the highest quality companies.”

Among the firm’s biggest current holdings are PepsiCo, News Corporation, Clorox, and Pfizer. “In a world where there are significant economic issues we are comfortable because we feel our funds own many businesses that can prosper in good times and bad,” the firm states. “Over the longer term, we like businesses that have international exposure. The United States represents less than 5% of the world’s population, and for most large companies, the only way to achieve sustained growth over long periods of time, is to expand around the globe.”