Mason Hawkins

Mason Hawkins

Last Update: 06-10-2016

Number of Stocks: 28
Number of New Stocks: 2

Total Value: $10,361 Mil
Q/Q Turnover: 4%

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

Mason Hawkins Watch

  • Southeastern Asset Management Comments on CONSOL Energy

    CONSOL Energy (NYSE:CNX) (+43%; +1.3%), the Appalachian coal and natural gas company that was among top detractors in 2015, added meaningfully to first quarter results. Management adjusted to lower commodity prices by adopting significant cost controls and expects positive free cash flow (FCF) in 2016. Early in the quarter, CONSOL announced it was lowering capex by more than 50% from previous guidance. The company also reduced operating expenses, effectively decreasing its Debt/ Operating Cash Flow ratio from 3.8 to 3.6. As we continued our constructive dialogue with management regarding asset monetization, CONSOL announced the addition of three new board members, two of whom we suggested. Additionally, Will Thorndike, whom we previously recommended as a board member, replaced Brett Harvey as Chairman. Shortly thereafter, CONSOL sold its Buchanan mine and other met coal assets for $420 million to a private equity-backed firm. The sale was accretive to the value of CONSOL, and management is pursuing additional asset sales.


    From Southeastern Asset Management's Q1 2016 shareholder letter.

      


  • Southeastern Asset Management Comments on Scripps Networks

    Scripps Networks (NASDAQ:SNI) (+19%; +1.4%), the media company that owns cable channels, including HGTV, The Food Network, DIY Network, Cooking Channel, Travel Channel, and Great American Country, reported a strong quarter with all six networks adding new viewers as millennial growth continued. Advertising revenue grew at a mid-single digit rate. The company’s advertising is better than most competitors, with more exposure to stable categories than others have. Affiliate fee revenue growth is expected to grow at a mid-to-high-single digit rate, and programming cost growth should continue to decelerate. Part of the stock’s discount is related to its international expansion opportunity which has not produced profits yet but has created startup costs and noncash amortization. The company purchased the remaining 35% of The Travel Channel that it did not own and sold its 7.25% stake in Fox Sports South & Southeast.


    From Southeastern Asset Management's Q1 2016 shareholder letter.

      


  • Southeastern Asset Management Comments on Wynn Resorts

    Wynn Resorts (NASDAQ:WYNN) (+36%; +2.7%), the luxury gaming and hotel operator with prime real estate in Las Vegas, Macau, and Boston, was the largest contributor in the quarter. Wynn preannounced positive results to enable management to buy more stock. CEO Steve Wynn demonstrated his confidence in the business by purchasing nearly one million shares, bringing his total stake in the company to 12%. Wynn Las Vegas reported better-than-expected 4Q results. Although pressure continued in Macau’s lower margin VIP segment, mass gaming revenues in Macau stabilized, and year-over-year gross gaming revenue comps in February were the strongest in almost two years. Wynn remains well below our appraisal and offers a compelling long-term opportunity for significant growth with a proven owner-operator at the helm. The value of properties in the development pipeline is not yet reflected in the stock price. The opening of Wynn Palace in Macau later in 2016 could spark additional stock appreciation as capital expenditures (capex) ends and revenues begin.


    From Southeastern Asset Management's Q1 2016 shareholder letter.

      


  • Southeastern Asset Management's Longleaf Partners Fund 1st Quarter Letter

    Longleaf Partners Fund posted a formidable 4.34% return in the first quarter, exceeding the S&P 500 Index’s 1.35%. A number of our stocks had double-digit gains, including several of our most undervalued businesses coming out of 2015. Most of our companies generated solid operating results, and management activity helped drive higher appraisals. Our two biggest positions declined slightly, and their portfolio weights made them among the notable detractors to our strong gains. Our investment cases and our high conviction for these companies remain unchanged. Not only were our absolute returns well beyond our goal of inflation plus 10%, but our relative results also benefitted from our lack of exposure to health care, which was among the top performing index sectors in 2015 but was the S&P 500’s worst performing sector in the quarter.


    Stock prices in the first quarter embodied Ben Graham’s description of “Mr. Market,” whose manic short-term swings are driven by investor emotions. The market fell -10.3% at its February 11 low point but then rallied over 13% by the end of March, a 2300 basis point swing. While economic and political uncertainties fostered the volatility, our appraisals proved much more stable, highlighting the importance of anchoring investment decisions to the long-term cash flows and underlying asset values of each company.

      


  • The Art of Piggybacking

    Piggybacking has been a topic that has been discussed frequently these days. Fellow writer the Science of Hitting’s recent article is quite illuminating and definitely worth reading. Inspired by him, I wrote this article to share my observations and thoughts on this subject.


    When I first started investing, I piggybacked many gurus and very frequently. I remember the days when I saw David Einhorn (Trades, Portfolio) or Mason Hawkins (Trades, Portfolio) initiating a position in a stock, and within a few hours I became an owner that the same stock. When I saw Exco (NYSE:XCO) was bought by Prem Watsa (Trades, Portfolio), Howard Marks (Trades, Portfolio) and Wilbur Ross (Trades, Portfolio), I put a good amount of money in it without even finishing up reading the 10-K.

      


  • Mason Hawkins Boosts Stake in Consol Energy

    Guru Mason Hawkins (Trades, Portfolio) boosted his stake in Consol Energy Inc. (NYSE:CNX) by nearly 15% with the purchase of 6,827,800 shares on Jan. 4.


    Hawkins now owns 52,835,737 shares of Consol Energy. It is the largest holding in his portfolio.

      


  • Mason Hawkins Trims Position in Everest Re Group

    Guru Mason Hawkins (Trades, Portfolio) has over 40 years of experience in the investment industry. Hawkins has similar investment philosophies to Benjamin Graham and Philip Fisher. Hawkins looks for businesses with good management, good people and companies that sell for deep discounts significantly less than their intrinsic value that provide a margin of safety.


    Hawkins founded Southeastern Asset Management in 1975 and is the chairman and CEO for the company. Prior to founding Southeastern Asset Management, Hawkins graduated from the University of Florida in 1970 and later went on to attend the University of Georgia where he received his MBA in finance.

      


  • Mason Hawkins Sells 3 Stakes in Portfolio

    Mason Hawkins (Trades, Portfolio), chairman and CEO of Southeastern Asset Management since 1975, made his largest fourth-quarter transactions in the form of divestitures. The guru sold three existing stakes in his portfolio in the quarter.


    Hawkins sold his 19,933,835-share stake in Loews Corp. (NYSE:L), a New York-based conglomerate involved in insurance, hotels, oil drilling and pipeline transport, for an average price of $37.29 per share. The deal had a -6.08% impact on Hawkins’ portfolio.

      


  • Longleaf Partners Comments on Mineral Resources

    Mineral Resources (ASX:MIN) returned -51% during 2015 driven largely by the collapse of iron ore prices. The crushing services business maintained steady volumes and strong margins but was not enough to appease market concerns of continued iron ore price declines. The company surprised the market with its ability to reduce costs in the iron ore mining business at a pace that maintained positive cash flow margins. During the fourth quarter, the company announced a A$30million stock buyback, (4% of outstanding shares), higher EBITDA guidance, and a new EPC (engineering, procurement, and construction) contract for a crushing plant for Rio Tinto’s Nammuldi mine. The company continued to take costs out of its mining operations to ensure that every ton of iron ore produced is sold at positive cash flow margins.

      


  • Longleaf Partners Comments on Genting Berhad

    Genting Berhad (XKLX:3182) was one of the largest detractors for the year, declining 53%. Malaysia macro/FX was a big headwind, and the company’s development of its sizable oil and gas assets is likely to be delayed given the weakness in energy prices. The company’s Singapore duopoly casino, publicly listed Genting Singapore, is led by CEO Hee Teck Tan and was down after reporting four quarters of unusually poor hold (2.0%–2.5%) in its gaming business, as well as some equity investment write-downs. Since opening the casino, the cumulative win rate at Genting Singapore has been close to the theoretical average of 2.85%, and we believe win rates should normalize over time. In the quarter we added Genting Singapore in addition to our Genting Berhad position. The stock’s deep discount was largely due to a slowdown in Chinese VIP visitors as a result of the Chinese anti-corruption campaign. Genting’s core mass market business has been steady and more than justifies our appraisal. The duopoly position in the stable Singapore jurisdiction represents a significant sustainable competitive advantage. The simple P/E multiple misses the sizable cash and investment portfolio on the balance sheet and minimal maintenance capex requirement (capex is much lower than depreciation). The company engaged in a value-accretive share buyback in recent months.

      


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