A Look at Southeastern Asset Management’s Reshuffled Top Stock Picks

Founded in 1975 Mason Hawkins‘ Southeastern Asset Management employs in-house research to pick value stocks based on its fundamentals and quantitative analysis driven approach. Deducing from the firm’s latest 13F filing, the value of its equity portfolio stood at $10.45 billion, with consumer discretionary and technology sectors, each representing 21% and 19% of this value, respectively, at the end of March. Like most value investing-driven firms Southeastern’s turnover ratio for the first three months came in low, at 13.79%. Let us find how Southeastern reshuffled its stock picks during the quarter.

At Insider Monkey, we follow nearly 800 smart money investors, whose 13F portfolios we analyze to determine how they collectively are trading thousands of stocks. By focusing on the small-cap space, we identify 15 stocks that we use as part of our investment strategy (see more details here).

#5 Scripps Networks Interactive, Inc. (NASDAQ:SNI)

– Shares Owned by Southeastern Asset Management (as of March 31): 11.28 Million

– Value of Holding (as of March 31): $739.03 Million

Southeastern cut its stake in the $8.32 billion developer of lifestyle-oriented content for linear and interactive video platforms by 13% during the first three months of this year and the holding amassed about 11.54% of Scripps Networks Interactive, Inc. (NASDAQ:SNI)’s outstanding stock at the end of March. In its shareholder letter for the first quarter Southeastern mentioned that Scripps’ advertising is better than most competitors and part of the reason why the stock is trading at a discount is because the company’s international expansion is yet to produce profits, but has created startup costs and non-cash amortization. In its financial results for the March quarter, Scripps beat both the top- and bottom-line estimates, having delivered EPS of $1.37 on $816.88 million in revenue. Tom Russo‘s Gardner Russo & Gardner also reduced its Scripps Networks Interactive, Inc. (NASDAQ:SNI) holding by 5% during the first quarter to 1.19 million shares.

#4 Alphabet Inc (NASDAQ:GOOG)

– Shares Owned by Southeastern Asset Management (as of March 31): 1.04 Million

– Value of Holding (as of March 31): $773.29 Million

Southeastern’s next largest holding was also reduced by 14% and represented 7.4% of the firm’s portfolio. So far this year Alphabet Inc (NASDAQ:GOOG)’s shares have fallen by about 6.5%. Ad price declines have weighed down the search giant’s performance lately and two main factors contributing towards this have been You Tube video ad growth, which has lowered Cost per clicks (CPCs) and the low smartphone search ad prices. Besides that, Alphabet has also been the focus of quite a few antitrust regulatory bodies including European Union and Russia. Andreas Halvorsen‘s Viking Global seems positive that the company will overcome these challenges as it raised its Alphabet Inc (NASDAQ:GOOG) holding by 11% to 2.05 million shares during the first quarter.

#3 FedEx Corporation (NYSE:FDX)

– Shares Owned by Southeastern Asset Management (as of March 31): 6.68 Million

– Value of Holding (as of March 31): $1.09 Billion

After an 8% hike in the March trimester Southeastern’s FedEx Corporation (NYSE:FDX) holding amassed about 2.5% of the provider of transportation, e-commerce and business services’ outstanding float. Recently, the company announced its collaboration with eBay Inc (NASDAQ:EBAY) whereby sellers at eBay can drop off items worth at least $25 at more than 1,600 FedEx stores around U.S. FedEx’s year old plan of taking over Dutch parcel company TNT Express for $4.8 billion is also scheduled to reach completion this month. Another firm bullish on FedEx Corporation (NYSE:FDX) is Edgar Wachenheim‘s Greenhaven Associates as it also raised its stake in the company by 9% in the January-March period to 4.91 million shares.

#2 Wynn Resorts, Limited (NASDAQ:WYNN)

– Shares Owned by Southeastern Asset Management (as of March 31): 12.56 Million

– Value of Holding (as of March 31): $1.17 Billion

Moving on to Southeastern’s bet on the operator of casino resorts, which largely remained unchanged during the first three months and represents about 12.4% of Wynn Resorts, Limited (NASDAQ:WYNN)’s outstanding shares. So far this year Wynn’s stock price has been on a tear posting gains of around 43%, even though it is in the red over the last twelve months with losses of 9%. On May 5, the company reported its first-quarter results, declaring EPS of $1.07 on revenue of $997.68 million, topping analysts’ expectations of earnings of $0.83 per share on the same revenue. The company is scheduled to open its $4.2 billion Wynn Palace project in Macau in the third quarter this year. James Crichton‘s Hitchwood Capital Management initiated a position in Wynn Resorts, Limited (NASDAQ:WYNN) with some 750,000 shares during the March quarter.

#1 Level 3 Communications, Inc. (NYSE:LVLT)

– Shares Owned by Southeastern Asset Management (as of March 31): 30 Million

– Value of Holding (as of March 31): $1.59 Billion

Finally, Southeastern’s top holding in the integrated telecommunications services industry received an 8% cut. Amid a miss on both top- and bottom-line estimates for the first quarter financial results, Level 3 Communications, Inc. (NYSE:LVLT)’s stock is down by over 2% on a year-to-date basis. Earnings for the March quarter stood at $0.34 per share on revenue of $2.05 billion. However, the company provided a stronger guidance for 2016 with EBIDTA growth expected in the 10%-12% range as compared to the previous expectations of 9% to 12%. Kerr Neilson‘s Platinum Asset Management hiked its stake in Level 3 Communications, Inc. (NYSE:LVLT) by 31% in the first quarter to 4.08 million shares.

Disclosure: None