Mason Hawkins

Mason Hawkins

Last Update: 2014-03-07

Number of Stocks: 33
Number of New Stocks: 3

Total Value: $20,427 Mil
Q/Q Turnover: 4%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Mason Hawkins Watch

  • Mason Hawkins' Longleaf Partners Comments on Level 3

    Level 3 (LVLT) was a detractor in the first half, with price falling 9%. The stock declined in the first quarter after reporting lower-than-expected operating income and 2013 guidance. However, the price rebounded 2% in the second quarter after former COO Jeff Storey was appointed the new CEO. We believe he has the right set of skills and experience to deliver solid revenue growth and cash flow.

    From Mason Hawkins' semi-annual 2013 report.  


  • Mason Hawkins' Longleaf Partners Comments on Guinness Peat Group

    Guinness Peat Group (GPG) declined 29% in the quarter and for the first half, making it the largest detractor over both periods. The company announced in May that the UK regulator had not yet settled its open pension inquiry as to how much financial support GPG must provide to three pension schemes, although management had already put aside funds to cover previously estimated support. The stock declined as capital returns were suspended until the inquiry is completed. GPG continues to sell its noncore assets outside of Coats, the world's leading industrial thread and textile crafts business. Directors at the company bought shares personally after the price decline.

    From Longleaf Partners' semi-annual 2013 report.  


  • Mason Hawkins' Top Second Quarter Portfolio Changes

    Mason Hawkins has been chairman and chief executive officer of Southeastern Asset Management since 1975. He and his partners manage the Longleaf Partners Funds. Hawkins has been receiving a lot of press recently as he’s teamed up with Carl Icahn in the fight for Dell.

    Over the second quarter, Hawkins bought one new stock bringing his total number of stocks owned to 36. His portfolio is currently valued at over $20 billion.  


  • Mason Hawkins Comments on Melco International

    Macau gaming company Melco International (HKSE:00200) was the top contributor to performance in the second quarter and for the first half, returning 10% and 50% respectively. Melco had strong visitor growth and increased margins in its Macau casinos as the more profitable mass market continued to outgrow VIP guests. The company completed the successful IPO of its Philippines business in the quarter. We trimmed the position as price appreciated, but the stock remains well below our appraisal.

    From Mason Hawkins' semi-annual 2013 report.  


  • Mason Hawkins Comments on Lamar Advertising

    We also sold Lamar Advertising (LAMR) as it reached our appraisal. We bought Lamar in 2011 at an average cost of $26, trimmed the position as it grew, and fully sold it in the second quarter at an average price of $48 per share. Lamar's strong outdoor advertising positions in its markets helped revenue growth as the economy recovered. Management's effective cost control and decision to explore converting to a REIT also caused the stock's move to value.

    From Mason Hawkins' semi-annual 2013 report.  


  • Mason Hawkins Comments on Madison Square Garden

    We sold two positions. Madison Square Garden (MSG)'s share price approached our appraisal, helping to make it a large contributor year-to-date. We made 114% on the investment during the two years that we held it. The company's multi-year arena renovation has been successful, and the increased value of the television rights for the Knicks and Rangers became clearer.

    From Mason Hawkins' semi-annual 2013 report.  


  • Mason Hawkins Comments on Quicksilver

    The Fund's position in Quicksilver (KWK) declined 19% for the second quarter and 33% for the first six months of the year, making it the largest detractor for both periods. The oil and gas exploration company had positive news that it closed on an agreement to sell 25% of its Barnett Shale assets to Tokyo Gas at a price that is in line with our appraisal. Several challenges, however, weighed on the stock, including failing to refinance all of the company's debt and persistently weak natural gas liquids prices.

    From Mason Hawkins' semi-annual 2013 report.  


  • Mason Hawkins Comments on Texas Industries

    The Fund's largest holding, Texas Industries (TXI), continued to add meaningfully to performance and is the largest contributor YTD with its 28% gain. The Dallas-based cement and aggregates company has had large volume growth and improved pricing in Texas, with demand exceeding capacity in some local markets. As we mentioned in the first quarter, the company is bringing additional capacity on line to capture the incremental demand and has additional upside potential when a recovery in California generates additional earnings.

    From Mason Hawkins' semi annual 2013 report.  


  • Mason Hawkins Comments on Saks

    Saks (SKS), which we purchased in the market decline in 2011, gained 19% for the second quarter and 30% for the first half of the year, making it the largest contributor in the quarter and the second largest YTD. Although the luxury retailer's highend shoppers are sensitive to large stock market downswings, they are less vulnerable to the challenges of high unemployment and slower economic growth that affect most consumers. During the second quarter, Saks' price rose sharply on news that the company had hired Goldman Sachs to explore strategic alternatives, including a sale of the company. In addition, investment in store renovation and the online retail business began to show positive results.

    From Mason Hawkins' semi-annual 2013 report.  


  • Mason Hawkins Comments on Cemex

    Toward the end of the second quarter, we repurchased a small position in Cemex (CX) convertible bonds, which we sold earlier in the year after tightening spreads and a rising equity price pushed the price to our appraisal. More recently, the converts became attractive when investors broadly fled emerging markets, the peso weakened, and the Mexican government paused infrastructure spending. Longer term, we believe Mexico public improvements will increase, and Cemex also will benefit from recovery in the U.S.

    From Mason Hawkins' semi-annual 2013 letter.  


  • Mason Hawkins Comments on Consol Energy

    The Fund's largest detractor in the quarter was Consol Energy (CNX), which fell 19% as lower coal prices and regulatory uncertainty punished all coal producers. The weak quarter also made CNX the largest performance detractor for the YTD with a 15% decline. Slowing Chinese demand has reverberated into worldwide price compression in met coal, which is used to make steel and is less than 15% of our CNX appraisal. Thermal coal used for power generation comprises much more of CNX's output and value. Less than 5% of the thermal coal CNX sold in 2012 went to power plants that are at risk of shutting down in the near term based on regulatory actions. Importantly, half of Consol's value is tied to its natural gas assets in the Utica and Marcellus shale plays, which arguably benefit if coal faces increased environmental regulation. The company also owns a port in Baltimore.

    From Mason Hawkins' semi-annual 2013 report.  


  • Mason Hawkins Comments on Chesapeake

    Our participation in overhauling the Chesapeake (CHK) board last year is paying off. The stock has gained 23% YTD and is the Fund's largest holding. During the second quarter, Doug Lawler, who was formerly a Senior Vice President and on the Executive Committee at Anadarko Petroleum, became CEO of CHK. His compensation aligns his interests with shareholders. He is committed to increasing oil production, lowering operating costs, and reducing debt to extract value from CHK's strong set of assets.

    From Mason Hawkins' semi-annual 2013 report.  


  • Mason Hawkins Comments on Dell

    Over the last six months, our Dell (DELL) position remained a top contributor with the underlying stock appreciating 33%. In the recent quarter, the stock was a detractor, declining 6% as uncertainty increased over the outcome of the proposed management buyout. We continued to work with Carl Icahn to propose a better alternative for shareholders. Given his structure, flexibility, and capital, Icahn was in the best position to lead the development of an outcome that provided an attractive payout but allowed shareholders to remain owners and benefit from the company's transformation. We sold approximately half of our Dell shares to Icahn to enable him to construct a compelling alternative. Subsequent to quarterend, the Dell Board has extended the vote on the buyout offer three times as it became obvious that shareholders would not approve the deal. Prior to the third postponement, Michael Dell and Silver Lake increased their offer to $13.75 and included a special dividend of 13 cents plus the normal third quarter 8 cent dividend. Southeastern continues to oppose the offer and will work with Icahn Enterprises to ensure that Dell has the right leadership who will focus the company on its profitable and growing enterprise business while allowing long-term shareholders to participate in its long-term success.

    From Mason Hawkins' semi-annual 2013 report.  


  • Mason Hawkins Comments on AON

    Aon (AON) also performed well in the quarter and first half, adding 5% and 16% respectively. As the world's largest insurance broker, the Risk Solutions group grows with global economic recovery as insurance pricing and risk coverage increase. In addition, fiduciary income should rise as interest rates move up. CEO Greg Case and his team continue to improve the Human Resources segment, which has been hampered by various issues including European weakness. By repurchasing $300 million in shares at discounts to our appraisal, management built value per share over the period.

    From Mason Hawkins' semi-annual 2013 report.  


  • Mason Hawkins Comments on Berkshire Hathaway

    Berkshire Hathaway (BRK)(BRK.A)(BRK.B), which we purchased for the second time in our history in 2012, rose 7% in the quarter and has advanced 25% YTD. The price rose earlier this year when BRK announced its joint acquisition of Heinz with 3G Capital. During the recent quarter, the company's various operating businesses reported solid results. In insurance, GEICO profitably grew at faster rates than its peers, and a lack of catastrophes benefitted reinsurance. In the rail segment, BNSF increased units and price with particularly strong transportation of petroleum and consumer products. The company's utilities had rate increases and higher natural gas volumes due to a colder winter. Additionally, BRK announced the acquisition of NV Energy, a Nevada utility.

    From Mason Hawkins' semi-annual 2013 report.  


  • Mason Hawkins Comments on DirecTV

    Three holdings have been among the largest positive contributors for both the quarter and the first half. DIRECTV (DTV) advanced 9% over the last three months and has risen 23% YTD. We have owned DTV for over eight years as its value has grown along with its price. CEO Mike White is one of our "all-star" partners. He and his team have grown ARPU (average revenue per user) for the company's 20 million U.S. satellite subscribers even as the industry has matured. Management has also made high-return investments in Latin America where subscribers have grown rapidly, making this geographic segment almost half of our DTV appraisal. Management consistently has returned capital to owners through repurchasing undervalued shares, including $1.4 billion in the second quarter.

    From Mason Hawkin's semi-annual report 2013.  


  • Longleaf Partners June 2013 Semi-Annual Report



  • Mason Hawkins' Longleaf Shareholder Letter Second Quarter 2013

    The relative underperformance in the quarter came as much from what we did not own as from price moves in our names. The financial sector, specifically banks and life insurers whose leverage is too risky for our appetite, drove a large portion of return in U.S. and global indices as interest rates bumped up. Our cash position built during the first quarter with sales of businesses approaching our appraisals and dampened our performance relative to the rising indices. Various individual holdings detracted from second quarter returns, and most of those were retreats from recent strong rallies. No common denominator impacted our primary performance detractors.

    Any single quarter usually indicates little about our long-term results. Rarely in Southeastern's 38 years have our 1, 5, and 10 year returns simultaneously lagged the benchmark, but currently the Partners Fund is in such a period. Longleaf International faced this same challenge within the last twelve months before its relative returns improved. While absolute returns are our primary focus, underperforming the market over these periods is disappointing and unacceptable, but not unprecedented. When we had a similarly tough stretch in 2000, the Partners and Small-Cap Funds fell behind their benchmarks for 1, 5, and 10 year periods by a much wider margin than today's Partners Fund lag. Then and now, the combination of a few stock-specific challenges and an extreme market environment that rewarded a narrow segment of stocks caused our underperformance. In 2000, the high-flying growth and Internet stocks selling at nosebleed multiples propelled the market, while we owned high quality businesses that sold at attractive discounts because they were part of the "old economy." A few troubled visible names also hurt our performance (Waste Management, Host Marriott, SafetyKleen). During the last five years, higher yielding, stable "safe stocks" became overvalued and led the market in an environment plagued by fear and volatility. We own steeply discounted, more cyclical companies with high quality assets and/or entrenched competitive advantages. A few troubled, visible names have caused a large portion of our longer term underperformance both in the U.S. (Dell, Chesapeake, Level 3) and outside the U.S. (HRT). Within five years of the 2000 period, the Partners and Small-Cap Funds had dramatically outperformed their indices with 5 and 10 year numbers far higher than their benchmarks. Today, we believe our absolute and relative return opportunity for the next five and ten years is equally as bright across all four Longleaf Funds for several reasons.  


  • Mega Positions of Bidder Mason Hawkins – DELL Shareholders Vote on $24.4 Billion Buyout

    On the eve of the Dell (DELL) shareholder’s voting results, let’s take a look at the current mega position holdings of low-key activist investor, Mason Hawkins, a bidder in the Dell takeover.

    As of June 10, 2013, the updated portfolio of Mason Hawkins, Chairman of Southeastern Asset Management, lists 37 stocks, none of them new, with a total value of $22.24 billion and a 4% quarter-over-quarter turnover.  


  • Mason Hawkins Cuts Holdings in Saks, DineEquity and Service Corp.

    Mason Hawkins of Southeastern Asset Management and Longleaf Partners had a busy day yesterday; the guru made decreases in several of his holdings. As of March 31, Hawkins’ Southeastern portfolio contained 37 stocks and was valued at over $22 billion.

      


Add Notes, Comments or Ask Questions

User Comments

No comment yet



Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide