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

June 11, 2013 | About:
Monica Wolfe

Monica Wolfe

130 followers
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.



Saks Inc. (SKS)

Hawkins decreased his holdings in Saks 32.72% yesterday. The guru sold a total of 8,452,966 shares at an average price of $14.78 per share. His sell represented a -0.56% impact to his portfolio. Hawkins still holds 17,384,749 shares of Saks, representing 11.38% of the company’s shares outstanding. The shares are trading slightly down today at $14.76.

Hawkins holding history of Saks:



Saks Inc. is a luxury retailer offering a wide assortment of distinctive fashion apparel, shoes, accessories, jewelry, cosmetics and gifts. Saks Fifth Avenue stores are principally free-standing stores in exclusive shopping destinations or anchor stores in upscale regional malls.

Financials:

Hawkins reduced his holdings in Saks as the price sits near a five-year high of $15.49.

Saks has a market cap of $2.19 billion; its shares were traded at around $14.76 with a P/E ratio of 48.54 and a P/S ratio of 0.77.

The analysis of Saks reports:

· The price is close to a five-year high.

· The P/S ratio is close to a 10-year high.

· The revenue per share has been in decline for the past five years.

Revenue for the most recent quarter was $793.2 million, up 5% from $753 million the year before. Net income, before adjustments, was $30.1 million, down from $32.7 million the previous year. Adjusted net income was $20 million.

Despite his decrease in Saks, Longleaf Partners remains the largest shareholder of Saks.

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According to the Peter Lynch Valuation, the company appears to be overvalued:

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There are seven gurus that hold stake in Saks. Click here to see the holding history for these gurus.

Service Corporation International (SCI)

Mason Hawkins decreased his holdings in SCI by -41.92%. Hawkins sold 5,789,895 shares at an average price of $17.99 per share. This sell represents a 0.47% impact to his portfolio. Hawkins still owns 8,023,327 shares of Service Corp. International, representing approximately 4.3% of the company’s shares outstanding.

This isn’t the first reduction involving Service Corp. that Hawkins has made recently. On May 10, Hawkins cut his holdings in the company 43.81%.

Mason Hawkins’ holding history of SCI:



Hawkins has been selling off shares of his stake in the company as their share price continues to expand past its previous 10-year high.

Service Corporation International is North America’s largest single provider of funeral, cremation and cemetery services. The company operates more than 1,800 funeral homes and cemeteries.

Recent Happenings at Service Corporation:

On May 29, SCI announced that the company had entered into a definitive agreement with Stewart Enterprises to acquire all of Stewart’s outstanding shares of Class A and B common stock for $13.25 per share in cash. The acquisition has an enterprise value of $1.4 billion.

The combined company is expected to have pro forma revenue of nearly $3 billion. The two companies have 2,168 locations in 48 states, eight Canadian provinces and Puerto Rico. These locations include 1,653 funeral homes and 515 cemeteries, of which 282 are combination locations.

In May, Service Corp. increased their quarterly cash dividend from $0.06 per share to $0.07 per share, representing a 17% increase. The company reported that it intends to pay regular quarterly cash dividends for the foreseeable future.

Financials:

Service Corporation International has a market cap of $3.73 billion; its shares were traded at around $17.86 with a P/E ratio of 23.90 and a P/S ratio of 1.60. The dividend yield of Service Corp. stock is 1.40%. The company had an annual average earnings growth of 11.3% over the past 10 years.

The first quarter financials for Service Corporation reports:

· Diluted earnings per share from continuing operations increased 40.0% to $0.28 in the first quarter 2013 compared to $0.20 in the prior year first quarter.

· Funeral gross profit increased by $20.1 million and funeral gross margin percentage increased to 26.0% from 23.6% due primarily to a healthy increase in funeral services performed.

· Net cash provided by operating activities increased to $154.1 million compared to $95.8 million in 2012, driven primarily by higher operating earnings and improved working capital performance.

The analysis on Service Corp. reports that operating margin has been consistently expanding, that the price and P/B ratio are at 10-year highs and that the P/E and P/S ratios are at five-year highs.

Service Corp’s P/S and P/B ratios:

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The company’s price and P/E ratio:

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According to the Peter Lynch Valuation Chart, Service Corp. appears to be overvalued:

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There are currently seven gurus that hold a stake in Service Corp. Click here to see their holding histories.

DineEquity (DIN)

Hawkins decreased his holdings in DineEquity 28.57% yesterday. The guru sold a total of 1,300,417 shares at an average price of $73.65 per share. Since his sell, the price per share has increased 1%. Hawkins still holds on to 1,498,345 shares, representing 7.81% of DineEquity’s shares outstanding.

Mason Hawkins holding history of DineEquity:



In the first quarter, Hawkins reduced his holdings in DineEquity by 10%.

DineEquity owns and operates two restaurant concepts: Applebee’s Neighborhood Grill and Bar and International House of Pancakes, or IHOP. The franchise operations segment consists of restaurants operated by Applebee's franchisees in the U.S. and restaurants operated by IHOP franchisees and area licensees in the U.S.

Recent Happenings at DineEquity:

The company declared a second quarter dividend of $0.75 per share in May.

Financials:

DineEquity has a market cap of $1.41 billion; its shares were traded at around $73.78 with a P/E ratio of 12.70 and a P/S ratio of 1.80. The dividend yield for DineEquity is at 1%.

The company’s first quarter financials reported:

· First quarter 2013 adjusted EPS (Non-GAAP) of $1.14 and GAAP EPS of $0.93.

· Free cash flow of $59.0 million.

· General and administrative expenses reduced by 14% year-over-year.

The analysis on DineEquity reports:

· The price per share revenue has been in decline for the past five years.

· The share price is currently sitting near a 10-year high of $75.38.

· The P/S ratio is near a 5-year high of 1.78.

DineEquity’s P/S and P/B ratio:

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The company’s price and P/E ratio:

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According to the Peter Lynch Valuation Chart, DineEquity currently appears to be undervalued:

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There are currently seven gurus that hold a stake in DineEquity. Click here to see their holding histories on the company.

You can see Mason Hawkins current portfolio here. Also, check out his Undervalued Stocks, High Growth Companies and Top Yielding Stocks.

Rating: 3.4/5 (7 votes)

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