Mason Hawkins

Mason Hawkins

Last Update: 2014-08-14

Number of Stocks: 27
Number of New Stocks: 1

Total Value: $18,812 Mil
Q/Q Turnover: 2%

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

Mason Hawkins Watch

  • Quality and High Conviction - Mason Hawkins in Review

    As of Sept. 30, 2013, the Longleaf Partners Fund, advised by Mason Hawkins’s Southeastern Asset Management, averaged an annual return of 24.13% over one year.

    In his third quarter 2013 letter to Longleaf shareholders, value investor Mason Hawkins offered a condensed summary on the quality of his selected companies: "The businesses we own should be able to deliver higher free cash flow over the next three years, thereby building intrinsic values. First, a number of our holdings that are headquartered in more developed markets such as Abbott, Cheung Kong, DirecTV, Lafarge, Mondelez, Philips, and Vodafone have large portions of their revenues in faster growing geographies. Second, the strength of our companies’ competitive positions and/or brands is enabling many to increase top line via pricing increases including Abbott, Cemex, DirecTV, Everest Re, FedEx, Ferrovial, Lafarge, Loews, Martin Marietta, Melco, Mondelez, News Corp, Scripps Networks, Texas Industries, Travelers, Washington Post, Vail, and Vulcan. Third, a number of our management teams are continuing to extract costs from their businesses to address slower growth and gain increased efficiencies. Material cost reductions are occurring at Abbott, Aon, Bank of New York Mellon, Cemex, Chesapeake, FedEx, Guinness Peat, Hochtief, Lafarge, Legg Mason, Level 3, Mondelez, Nitori, Philips, TNT Express, Washington Post, and Wendy’s. Fourth, in contrast to oft-stated concerns about peak margins, operating margins across our holdings are approximately one-third less than the overall market’s margins, with most of our companies operating closer to their 10-year average margins than their peaks."  

  • Mason Hawkins's Longleaf Partners Comments on DIRECTV

    The Fund had only three detractors in the quarter: Mosaic, Abbott Labs, and DIRECTV (DTV), with only Mosaic negatively impacting YTD results. We bought and exited Mosaic during the third quarter. Our case changed quickly with the potash industry drama that caused prices to drop. Abbott was down 4% in the quarter following FX headwinds, concerns over tougher rules for device approval in Europe, and issues at a dairy supplier leading to a meaningful product recall in the baby formula division in China. DIRECTV slipped 3% on increased subscriber churn amidst a challenged Brazilian economy. DIRECTV Latin America remains well positioned to benefit from rising pay-TV penetration in the region, and the mature U.S. business continues to generate higher ARPU (average revenue per user).

    From Mason Hawkins' Longleaf Partners Fund third quarter 2013 commentary.  

  • Mason Hawkins' Longleaf Partners Comments on Aon

    For the YTD, Aon (AON), the world's largest insurance broker and a leading benefits management firm, was among the Fund's largest contributors as the company's lower tax rate and increasing cash flow helped drive a 35% return. Higher interest rates will increase fiduciary income and help close the gap in the underfunded pension. Although nascent, Aon's healthcare exchange for corporate employees is gaining critical mass, most recently adding Walgreen Co in the third quarter. We applaud Greg Case and his team for their customer- focused, shareholder-oriented leadership.

    From Mason Hawkins' Longleaf Partners Fund third quarter 2013 commentary.  

  • Mason Hawkins's Longleaf Partners Comments on CONSOL Energy

    Other strong performers in the quarter included Level 3, up 27%, and CONSOL Energy (CNX), up 25%. At Level 3, since taking over as CEO in April, Jeff Storey has implemented the necessary steps to grow top line and increase cash flow by reducing costs and focusing on higher margin enterprise customers. Brett Harvey, CEO at CONSOL indicated that management is exploring the sale of assets and could potentially split the company into various parts: natural gas, coal, and infrastructure. Even with meaningful recent stock gains, both companies remain among our most discounted names.

    From Mason Hawkins' Longleaf Partners Fund third quarter 2013 commentary.  

  • Mason Hawkins' Longleaf Partners Comments on FedEx

    FedEx (FDX) gained 25% over the last nine months after delivering 16% in the third quarter. The stock increase reflects some degree of confidence that management will execute planned cost cuts at the Express air delivery segment to adjust to the migration of more traffic onto ships and trucks due to high oil prices. While the stock has been volatile over the past year, our appraisal of the company has steadily grown, driven by the Ground segment. Subsequent to quarter-end, FedEx announced a share repurchase plan of 11% of the company.

    From Mason Hawkins' Longleaf Partners Fund third quarter 2013 commentary.  

  • Mason Hawkins' Longleaf Partners Fund Management Discussion - Third Quarter 2013

    Longleaf Partners Fund delivered a substantial 9.8% in the third quarter, taking the Fund’s year-to-date  

  • Mason Hawkins Discusses Strong Returns in Q3 Shareholder Letter

    Longleaf Partners Chairman and Chief Executive Officer Mason Hawkins and President and Chief Investment Officer Staley Cates discuss holdings Level 3 (LVLT), Chesapeak Energy (CHK), Vodafone (VOD), Washington Post (WPO), Dell (DELL) and others in their third quarter letter to shareholders. The firm delivered one of its strongest quarters for returns in its history in the third quarter. Read the letter here.  

  • Mason Hawkins Buys 12% of News Corp

    While still embroiled in a fraught relationship with Dell (DELL), Mason Hawkins’ Southeastern Management has taken a major position in Rupert Murdoch’s company, News Corp. (NWS), according to GuruFocus Real Time Picks. Hawkins acquired an 11.9% stake in the company, amounting to 23,767,700 shares in aggregate.

    Hawkins first disclosed he was purchasing News Corp. shares in his semi-annual report, released Aug. 14.  

  • Activist Mason Hawkins Reduces Oil & Gas, Aggregates and More

    The updated portfolio of low-key activist investor Mason Hawkins, chairman of Southeastern Asset Management, lists 36 stocks, one of them new, with a total value of $20.34 billion and a 3% quarter-over-quarter turnover. His portfolio is currently weighted with the top three sectors: financial services at 31.4%, communication services at 14.5% and energy at 13.7%.

    Here are four of Mason Hawkins’s recent reductions made since June 30, 2013. Catch Guru Hawkins’s second quarter portfolio changes here.  

  • Mason Hawkins' Longleaf Partners Comments on Everest RE

    Bermuda-based reinsurer Everest RE (RE)'s 14% year-to-date (YTD) return made it a top performer in the first half. The company improved its earnings and operations, remained disciplined in its underwriting, and saw pricing strength in the half. Management also made significant repurchases of the undervalued stock.

    From Mason Hawkins' semi-annual 2013 report.  

  • Mason Hawkins' Longleaf Partners Comments on News Corp

    We purchased News Corp (NWS), another company we have owned previously. As the company split out the U.S. Fox entertainment business, we had the opportunity to own the remaining strongly financed, premier media assets around the world at an attractive discount.

    From Mason Hawkins' semi-annual 2013 report.  

  • 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.  

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