In August, 2010, Value Investor Insight (VII) had and interview with Investment Guru Mason Hawkins and his portfolio managers. They described what about the latest bear market was unique, the selling guideline they learned from John Templeton, why they see particular opportunity outside the U.S., and what they think the market is missing in Carrefour, Dell, Hochtief, Genting and Shanda.
This is the part dealing with the investment philosophy:
Read the full text of the interview here.
Looking for stocks that are cheap? As of September 30, 2010, these are Mason Hawkins’s top holdings:
Check out the Hawkins’s complete stock portfolio by clicking on Mason Hawkins.
This is the part dealing with the investment philosophy:
VII: Mason, since founding Southeastern 35 years ago you’ve been touting the same “business, people, price” investment philosophy. Please give us a brief summary.
Mason Hawkins: Our view is simply that superior long-term investment performance can be achieved when financially strong, competitively entrenched, wellmanaged companies are bought at prices significantly below their business value and sold when they approach that corporate worth. The quantitative piece of that is that we only want to buy when we can pay less than 60% of a conservative appraisal of a company’s value, based on the present value of future free cash flows, current liquidation value and/or comparable sales.
On the qualitative side, we’re looking for two things to line up. The first is that management consists of capable operators focused on generating the most free cash flow possible, and that once they generate that cash flow they redeploy it in a value-generating way. When a company is selling at a big discount to a conservative appraisal of value, the default option – against which other uses of capital should be compared – is typically buying back shares, which creates value per share and increases our percentage ownership in the business. The second qualitative assessment we make is on the quality of the business, where we’re looking for the types of competitive advantages that produce sustainably high returns on capital and free cash flow that can grow.
Read the full text of the interview here.
Looking for stocks that are cheap? As of September 30, 2010, these are Mason Hawkins’s top holdings:
No. 1: DIRECTV Group Inc. The (DTV, Financial), Weightings: 10.56% - 56,730,807 Shares
DIRECTV is a provider of digital multichannel television entertainment in the United States and Latin America. Directv Group Inc. The has a market cap of $33.39 billion; its shares were traded at around $40.05 with a P/E ratio of 18.1 and P/S ratio of 1.6.No. 2: Chesapeake Energy Corp. (CHK, Financial), Weightings: 8.22% - 81,153,405 Shares
Chesapeake Energy Corp. is an independent oil and gas company engaged in the development, exploration, acquisition and production of onshore natural gas and oil reserves. Chesapeake Energy Corp. has a market cap of $14.97 billion; its shares were traded at around $22.89 with a P/E ratio of 7.5 and P/S ratio of 1.9. The dividend yield of Chesapeake Energy Corp. stocks is 1.3%. Chesapeake Energy Corp. had an annual average earning growth of 14.7% over the past 10 years. GuruFocus rated Chesapeake Energy Corp. the business predictability rank of 2-star.No. 3: Dell Inc. (DELL, Financial), Weightings: 8.21% - 141,682,699 Shares
Dell Inc. is a premier provider of products and services required for customers worldwide to build their information-technology and Internet infrastructures. Dell Inc. has a market cap of $26.6 billion; its shares were traded at around $13.68 with a P/E ratio of 10.1 and P/S ratio of 0.5. Dell Inc. had an annual average earning growth of 4.1% over the past 10 years.No. 4: The Walt Disney Company Disney (DIS, Financial), Weightings: 6.83% - 46,192,551 Shares
Walt Disney Company owns 100% of Disney Enterprises, Inc. The Walt Disney Company Disney has a market cap of $70.01 billion; its shares were traded at around $36.97 with a P/E ratio of 17.8 and P/S ratio of 1.9. The dividend yield of The Walt Disney Company Disney stocks is 0.9%. The Walt Disney Company Disney had an annual average earning growth of 11.2% over the past 10 years.No. 5: Yum! Brands Inc. (YUM, Financial), Weightings: 6.8% - 33,044,304 Shares
Yum! Brands Inc. is the one of the world's largest restaurant companies, with restaurants around the world in numerous countries and territories. Yum! Brands Inc. has a market cap of $23.56 billion; its shares were traded at around $50.27 with a P/E ratio of 20.9 and P/S ratio of 2.2. The dividend yield of Yum! Brands Inc. stocks is 2%. Yum! Brands Inc. had an annual average earning growth of 10.1% over the past 10 years. GuruFocus rated Yum! Brands Inc. the business predictability rank of 3.5-star.Check out the Hawkins’s complete stock portfolio by clicking on Mason Hawkins.
