Billionaire Mason Hawkins Snapped Up One Stock During the Crash and Lost Confidence in Two Other Stocks

The recent stock market volatility has pushed some hedge fund investors and other money managers to adjust their portfolios. Just a few days ago, Mason Hawkins’ Southeastern Asset Management submitted three public filings with the U.S. Securities and Exchange Commission on three of its handful of positions. The following article will briefly discuss investment firm’s moves, and will also cover hedge fund sentiment on each of the stocks covered.

Professional investors like Mason Hawkins spend considerable time and money conducting due diligence on each company they invest in, which makes them the perfect investors to emulate. However, we also know that the returns of hedge funds and certain institutional investors on the whole have not been good for several years, underperforming the market. We analyzed the historical stock picks of these investors and our research revealed that the small-cap picks of these funds performed far better than their large-cap picks, which is where most of their money is invested and why their performances as a whole have been poor. Why pay fees to invest in both the best and worst ideas of a particular hedge fund when you can simply mimic the best ideas of the best fund managers on your own? A portfolio consisting of the 15 most popular small-cap stock picks among the funds we track has returned more than 102% and beaten the market by more than 53 percentage points since the end of August 2012 (see the details). So, we can definitely come up with promising investment ideas by following the moves of smart investors.

Southeastern Asset Management is global investment management firm founded in 1975. The Tennessee-based firm takes on a value-oriented approach to investing and focuses on a long-term time spectrum. Southeastern is led by CEO and Founder Mason Hawkins, whose investment style resembles the one of Warren Buffett. Southeastern Asset Management currenly oversees $26.7 billion in assets under management, while its equity portfolio has a market value of $14.95 billion as of June 30.

Let’s begin our discussion by looking at Southeastern Asset Management’s position in Murphy Oil Corporation (NYSE:MUR). A freshly-amended 13G filing disclosed that Mason Hawkins’ investment firm holds an ownership stake of 10.13 million shares in the oil and gas exploration and production company, accounting for 5.9% of its outstanding shares. This denotes a decrease of 4.82 million shares from the position disclosed in the 13F filing for the June quarter. The shares of Murphy Oil Corporation have lost more than 41% since the beginning of the year, and it appears that Mason Hawkins and his team have lost confidence in the energy stock. Meanwhile, 24 hedge funds monitored by Insider Monkey had positions in Murphy Oil Corporation (NYSE:MUR) at the end of the second quarter and amassed 13.00% of the company’s shares, compared with 23 investors registered in the prior quarter. However, the value of their investments decreased to $959.78 million from $1.07 billion during the three-month period, mainly owning to the poor stock performance. The stock lost nearly 11% during this time span. Pzena Investment Management, founded by Richard S. Pzena, is among the top stockholders of Murphy Oil Corporation (NYSE:MUR) with 4.67 million shares.

We can now turn the page and take a look at the other two moves made by Southeastern Asset Management.

In another 13G amendment submitted last week, Southeastern Asset Management disclosed owning 1.80 million shares of Vail Resorts Inc. (NYSE:MTN), which represent 4.9% of the company’s common stock. The investment firm’s 13F filing for the three months that ended June 30 revealed a 2.39 million-share position in the global mountain resort operator. The shares of Vail Resorts have advanced 20% since the beginning of the year, partially thanks to the recently-published earnings report for the fourth quarter and fiscal year that ended July 31. The company posted net revenue of $1.40 billion for fiscal 2015, compared with $1.25 billion reported a year ago. At the same time, Vail Resorts reported net income of $114.8 million, compared to $28.5 million in the prior fiscal year. Therefore, it appears that the Tennessee-based firm has decided to take some profits off the table. However, the stock lost some of its appeal among the hedge funds monitored by our team, as the number of top money managers invested in the company decreased to 23 from 29 during the June quarter. Nevertheless, the value of their positions remained somewhat the same, increased by only $2.08 million to $443.00 million. These hedge funds stockpiled 11.20% of the company’s shares on June 30, and Ken Griffin’s Citadel Investment Group was one of the most bullish on Vail Resorts Inc. (NYSE:MTN) with approximately 239,000 shares.

Finally, Southeastern Asset Management reported a 12.13 million-share stake in Wynn Resorts Limited (NASDAQ:WYNN) via a 13G filing, which accounts for 12.0% of the company’s shares. This marks a lift of 5.02 million shares from the holding revealed in the latest 13F filing. The stock of the hotel and casino operator has gained nearly 40% since the beginning of this month, but it is still 51% in the red year-to-date. Wynn Resorts Limited generates most of its revenues from China, so it is highly unlikely that the upcoming earnings report will positively surprise the market. Even so, the stock received a strong vote of confidence from the hedge fund industry during the second quarter, as the number investors with stakes in the company increased to 35 from 25, accumulating 12.40% of the company’s common stock. At the same time, the value of the money poured into the stock increased to $1.24 billion from $936.81 million during the quarter. John Griffin’s Blue Ridge Capital added a 790,000-share position in Wynn Resorts Limited (NASDAQ:WYNN) during the second quarter, making it one of the largest stockholders.

Disclosure: None