Mason Hawkins Increases Holdings in CNX and DWA

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Feb 11, 2015
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Mason Hawkins (Trades, Portfolio), Founder, Chairman and Chief Executive Officer of Southeastern Asset Management increased his holdings in two positions in his portfolio of 30 stocks total, with a value currently at $18.33 billion and a quarter-over-quarter turnover rate of 12%.

When looking for businesses to invest in, Hawkins has three rules: The business must have good people working for it, the business must be strong, and lastly, the stock must be at a deeply discounted price. Sticking with these principles has earned him the Institutional Investor Lifetime Achievement Award in 2005, Equity Manager of the Year in 2007, along with other awards and nominees throughout the years.

Here are the most recent increases to his portfolio:

Consol Energy Inc (CNX)

Hawkins increased his position in CNX up ~47% at an average price of $32.90. He now owns 32,758,559 shares.

Consol Energy was incorporated in 1991 as an energy company that operates in both oil and gas exploration and production as well as coal mining.

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According to the Peter Lynch earnings line, this stock is undervalued.

“CONSOL Energy (CNX) posted a negative 18% return in the quarter. Over half of our appraisal is attributable to the company’s gas reserves in the Marcellus and Utica shale plays. To monetize gas production value, Executive Chairman Brett Harvey and CEO Nick Deluliis successfully completed an initial public offering (IPO) of a midstream Master Limited Partnership (MLP) at metrics above both our appraisal and the projected price in the recent quarter. Approximately 40% of our appraisal is in CONSOL’s coal assets. As the low-cost producer in Appalachia due to its use of long wall mining methods, the company plans to shift more of its met coal sales to domestic customers — a competitive move that will pressure overleveraged, high cost producers. The company’s variety of assets, including the Baltimore port terminal, provides multiple options for gaining value recognition without reliance on commodity price increases” Hawkins says in the Longleaf Partners Q3 2014 Management Discussion.

Consol Energy's revenue per share growth rate over the past three years has been -15.50% per year. The company's revenue has been declining for the past five years. The current P/S ratio is 2.04 and the P/E ratio is 47.27.

Dreamworks Animation SKG Inc. (DWA, Financial)

Hawkins increased his holding in DWA by ~50% at an average price of $20.03. He now owns 14,165,846 after the transaction was made, which impacted his overall portfolio by 0.50%.

Dreamworks was incorporated in 2004 as a company that creates family entertainment movies as well as television series and specials, mainly using animation.

Dreamworks has a market cap of $1.688 billion as of September 2014. The company is currently trading at $19.95/share and the P/S ratio is currently 2.58, close to its one-year low of 2.43.

Hawkins also decreased his position in Empire State Realty Trust Inc (ESRT, Financial) by ~19%. He sold the stock for an average price of $18.06/share. He still owns 10,072,700 shares.

Empire State Realty was incorporated in Maryland in 2011 as a self-managed and self-administered real estate trust that owns, manages, operates, acquires and repositions offices around Manhattan.

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