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Sally Jones
Sally Jones
Articles (580) 

Mason Hawkins, DELL Shareholder Shakeup

March 07, 2013 | About:

Shareholder opposition grows as computer maker Dell Inc. (DELL) defends its planned leveraged buyout at $24.4 billion. In his latest trade on March 5, 2013, major DELL stakeholder Mason Hawkins, Chairman of Southeastern Asset Management, reduced his DELL shares by -0.13% at the average price of $13.5 that day, as reported in the latest 13D filings by Mason Hawkins. Hawkins now owns 146,612,358 shares, about 8.4% of the company. The stock price has changed by 0%. See Dell’s 10-year here.

Coinciding with the reduction, Southeastern Asset Management repeated its earlier charge that DELL had placed management's interests above those of shareholders. The company criticized Dell for allegedly refusing to comment on the proposed buyout or provide investors with the results of certain segments from last year.

In February 2013, Dell’s largest outside investor and long-term holder Southeastern Asset Management had bought more shares while opposing the deal, saying that the deal “grossly undervalued the company.” One of the largest stakeholders in Dell, Mason Hawkins has been Chairman and Chief Executive Officer Southeastern Asset Management since 1975. He and his partners manage the Longleaf Partners Funds. With a quarter-over-quarter turnover of 8%, Southeastern Asset Management portfolio has 44 stocks with a total value of $22.22 billion. Mason Hawkins’ portfolio top three weightings are financial services for 29.3%, EFT, options, preferred at 14.9%, and Basic Materials, 13.3%.

A firm believer in business appraisals, Mason Hawkins told GuruFocus in a past interview, “At Southeastern Asset Management, we are our largest client because of our collective personal investments in the Longleaf Partners Funds. You see your boss in the mirror each morning, and you're not trying to trick that person. You want to be very conservative with your appraisals.” Explaining the value of Dell back in 2011, Mason Hawkins said, “In PCs you are basically a reseller for Windows and Intel. With storage, servers, and services, that is not the case. You have much, much higher gross margins.” Read the full article here .

As a buy-and-hold type, Mason Hawkins invests in large positions of individual stocks and holds them for a long time. Southeastern has held Dell since 2005. The GuruFocus checkup on DELL shows that its operating margin is expanding and DELL’s stock dividend yield (1.1%) is close a-year high, both good signs. The checkup did reveal that DELL revenue growth has slowed over the last year in the slowdown in overall PC sales. Over the past three years, DELL issued $4.5 billion of new debt but overall, its debt level is acceptable.

Mason Hawkins’ DELL Holding History:

With a market cap of $24.41 billion and a P/E of 9.5, Dell Inc. offers a range of technology solutions, including servers and networking products, storage products, services, software and peripherals, mobility products and desktop PCs.

Dell’s Annual Growth Rate over 10 Years:

1362589889721.pngDELL data by GuruFocus.com

Mason Hawkins Top Buys, Top Sells, Top Holdings:

Dell Inc., based in Round Rock, Texas, is actively soliciting alternative deals.

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

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