In this article, we will discuss the top 5 stock picks of Mason Hawkins’ Southeastern Asset Management. If you want to read our comprehensive analysis of Hawkins’ investment strategy, history, and stock picks, go directly to 10 Stocks to Buy According to Mason Hawkins’ Southeastern Asset Management.
5. Lazard Ltd (NYSE:LAZ)
Southeastern Asset Management’s Stake Value: $268.16 million
Southeastern Asset Management’s 13F Portfolio: 5.08%
Number of Hedge Fund Holders: 18
Mason Hawkins owns 5.85 million Lazard shares at a value of $268.16 million. The New York-based company provides financial advisory and asset management services to its clients. For the third quarter, Lazard Ltd (NYSE:LAZ) posted EPS of $0.98, exceeding estimates by $0.03.
On December 8, Morgan Stanley analyst Manan Gosalia maintained an ‘Overweight’ rating on Lazard Ltd (NYSE:LAZ) shares, lowering the price target to $55 from $61. The company’s Q3 revenue of $702 million implied a 23% growth from Q3 2020 levels. Its financial advisory and asset management segments both delivered symmetrical performances, with reported revenues well above last two years’ levels.
Out of 867 elite hedge funds tracked by Insider Monkey, 18 disclosed ownership of stakes in Lazard Ltd (NYSE:LAZ) at the end of the third quarter.
4. Hyatt Hotels Corporation (NYSE:H)
Southeastern Asset Management’s Stake Value: $315.66 million
Southeastern Asset Management’s 13F Portfolio: 5.99%
Number of Hedge Fund Holders: 37
Investors are loading up on Hyatt Hotels Corporation (NYSE:H), as it was found in the portfolio of 37 hedge funds at the end of the third quarter, up from 23 a quarter ago.
Southeastern Asset Management reported owning 4.09 million shares of Hyatt Hotels Corporation (NYSE:H) at the end of the third quarter, worth $315.66 million, up 19% over the previous quarter where the fund owned 3.47 million shares. The company develops and manages hotels and resort chains in the United States and internationally.
On December 13, Bernstein analyst Richard Clarke initiated coverage of Hyatt Hotels Corporation (NYSE:H) with an ‘Outperform’ rating and a $105 price target. The analyst noted that the company represents a phenomenal growth story, having doubled its hotel room count since its 2009 IPO, and currently accounts for roughly 4% of the global development pipeline.
Investment firm Baron Funds mentioned Hyatt Hotels Corporation (NYSE:H) in its Q3 investor letter. Here’s what the fund said:
“Hyatt Hotels Corp.: Following its recent announcement to acquire Apple Leisure Group, a highly desirable independent resort management company with 102 resorts in 10 countries, we reacquired shares in Hyatt, a leading hotel company. We believe this acquisition will accelerate Hyatt’s industry-leading growth by adding a portfolio of resort brands with a large pipeline. Hyatt’s management has also announced its intention to accelerate its transformation to greater fee-based earnings and create additional liquidity by seeking to sell $2 billion of owned hotels in the next three years. We believe the combination of industry-leading growth, hotel asset sales at attractive valuations, and the company’s ongoing transformation to more of an asset-light business will result in an improvement in Hyatt’s valuation and strong shareholder returns.”
3. Mattel, Inc. (NASDAQ:MAT)
Southeastern Asset Management’s Stake Value: $340.57 million
Southeastern Asset Management’s 13F Portfolio: 6.46%
Number of Hedge Fund Holders: 34
Up next is Mattel, Inc. (NASDAQ:MAT), a children’s entertainment company that makes toys and other consumer goods. The firm was found in the portfolio of 34 hedge funds at the close of the third quarter. This shows a positive trend from the preceding quarter, where 25 hedge funds were bullish on Mattel, Inc. (NASDAQ:MAT).
Mattel, Inc. (NASDAQ:MAT) represents 6.46% of Mason Hawkins’ portfolio, with 8.34 million shares valued at $340.57 million.
Investment firm Longleaf Partners Fund mentioned Mattel, Inc. (NASDAQ:MAT) in its third-quarter investor letter. Here’s what the fund said:
“Mattel (-8%, -0.51%), the global toy and intellectual property franchisor, detracted despite strong quarterly performance that increased our appraisal of the value by 5%. Sales grew 40% above weak 2020 comps, with particularly encouraging results in American Girl, the doll brand that had been struggling for years before CEO Ynon Kreiz initiated a successful turnaround. Despite some cost inflation, the consolidated gross margin increased nearly 4%. We think Mattel will earn $1.50/share next year and the multiple remains too low despite two years of price appreciation. The company has recently announced 13 feature films, 18 TV shows, and 24 other projects in development. The intellectual property (IP) efforts create substantial earnings power but haven’t contributed much yet. These are some of the best non-earning assets in our portfolio and we expect many of them to be realized within the next few years.”
2. CNX Resources Corporation (NYSE:CNX)
Southeastern Asset Management’s Stake Value: $355.43 million
Southeastern Asset Management’s 13F Portfolio: 6.74%
Number of Hedge Fund Holders: 34
CNX Resources Corporation (NYSE:CNX) is a natural gas drilling company based in the United States. Up until 2017, the company was known as CONSOL Energy Inc. and is headquartered in Pennsylvania. Hedge fund sentiment was positive on CNX Resources Corporation (NYSE:CNX), with 34 hedge funds reporting ownership of stakes in the company at the end of the third quarter, up from 30 in the preceding quarter.
Southeastern Asset Management is the leading stakeholder in CNX Resources Corporation (NYSE:CNX), with 28.16 million shares valued at $355.43 million, amounting to 6.74% of the fund’s overall portfolio.
Longleaf Partners Fund, an investment management firm, talked about CNX in its Q3 investor letter. Here’s what the fund said:
“Finally, had you told us two years ago that CNX would 1) accretively buy in its pipeline assets to be the low-cost player in the basin; 2) further lock in FCF with hedges; 3) buy back a material amount of shares to grow FCF/share power above $2; 4) finally see more E&P industry consolidation, we would not have expected a sub-$12 stock price. But now that gas prices are up, hedges are viewed by the market as a negative, and sellsiders struggle for a short-term “catalyst.” We expect CNX to create more catalysts and continue to take advantage of its dramatically undervalued stock price.”
1. Lumen Technologies, Inc. (NYSE:LUMN)
Southeastern Asset Management’s Stake Value: $813.90 million
Southeastern Asset Management’s 13F Portfolio: 15.44%
Number of Hedge Fund Holders: 25
Lumen Technologies, Inc. (NYSE:LUMN) is Mason Hawkins’ top holding, with 65.69 million shares valued at $813.90 million, making up 15.44% of his overall portfolio. In comparison to the last quarter, where he held 61.66 million shares of Lumen Technologies, Inc. (NYSE:LUMN), Hawkins upped his stake in the company by 7%.
In December, Lumen Technologies, Inc. (NYSE:LUMN) won a network contract from the U.S. Army Reserve Command, to provide VPN services and remote access solutions to more than 650 Army Reserve locations across the United States. The contract has an initial term of one year with 10 one-year options and is worth $23 million.
25 hedge funds were long Lumen Technologies, Inc. (NYSE:LUMN) at the close of the third quarter, with combined holdings of $941.37 million. In comparison, 33 hedge funds held stakes in the firm a quarter earlier.
Investment firm Longleaf Partners Fund is mentioned in its Q3 2021 investor letter. Here’s what the fund said:
“Finally, had you told us two years ago that CNX would 1) accretively buy in its pipeline assets to be the low-cost player in the basin; 2) further lock in FCF with hedges; 3) buy back a material amount of shares to grow FCF/share power above $2; 4) finally see more E&P industry consolidation, we would not have expected a sub-$12 stock price. But now that gas prices are up, hedges are viewed by the market as a negative, and sellsiders struggle for a short-term “catalyst.” We expect CNX to create more catalysts and continue to take advantage of its dramatically undervalued stock price.”
You can also take a look at 10 Best High Yield Stocks To Buy Now and Cathie Wood’s Top 10 Stock Picks.
