We recently published a list of Billionaire Mason Hawkins’ 10 Small-Cap Stocks with Huge Upside Potential. In this article, we are going to take a look at where IAC Inc. (NASDAQ:IAC) stands against other billionaire Mason Hawkins’ small-cap stocks with huge upside potential.
Mason Hawkins’s Value Investment Strategy
Mason Hawkins is a prominent American investor, known for being the founder and chairman of Southeastern Asset Management. Hawkins holds a Bachelor of Arts in Finance from the University of Florida and later did his MBA in Finance from the University of Georgia. Before founding Southeastern Asset Management, the billionaire gained experience as a Director of Research at Atlantic National Bank and First Tennessee Investment Management. There he developed his value investment strategy and has since been known for his discipline in value investing. His fund Southeastern Asset Management also holds the same reputation, which can be witnessed through his concentrated portfolio of around 40 to 50 stocks. Southeastern Asset Management services 47 clients at the moment, with $5,271,901,660 as assets under management as of March 2024.
Value investment is an investment strategy that employs buying stocks of well-managed and quality companies at prices significantly below their intrinsic value. The core of Hawkins’ strategy is to purchase equities when their market price is no more than 60% of the firm’s appraisal of their intrinsic value. Value investors believe that the market overreacts to economic news, which leads to movement in stock prices, however, this news does not affect the long-term fundamentals of a company. Therefore, investors like Mason Hawkins do not follow the herd and use financial research and analysis to find quality companies. Value investors are also known for holding companies for a long term, but also actively ferret out stock that the market is underestimating.
Hawkins’ disciplined and research-based investment strategy has earned him widespread recognition. He achieved Investor’s Lifetime Achievement Award in 2005 and was also named Domestic Equity Fund Manager of the Year by Morningstar in 2006.
Under the current market condition, Hawkins’ value investment strategy has led Southeastern Asset Management’s attention towards small-cap stocks. While the small-cap stocks have largely underperformed the market when compared to their large-cap counterparts. However, according to Francis Gannon, Co-Chief Investment Officer at Royce Investment Partners, small-caps are attractively priced for long-term investment opportunities. Gannon’s investment advice aligns with Hawkins’s strategy, as he suggests investing in quality small-cap companies with strong fundamentals, low debt, established long-term earnings, and significant upside potential.
Our Methodology
To compile the list of billionaire Mason Hawkins’ 10 small-cap stocks with huge upside potential, we sifted through 13F filings of Southeastern Asset Management, from Insider Monkey. From these filings, we checked each stock’s upside potential from CNN and ranked the stocks in ascending order of the upside potential. We have also added the stake Southeastern Asset Management holds in each company and the hedge fund sentiment around each stock. Please note that the data was recorded on April 28, 2025. Also note that for this article we have defined small-cap companies as those with a market capitalization between $1 billion to $10 billion.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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IAC Inc. (NASDAQ:IAC)
Market Capitalization: $2.85 billion
Number of Hedge Fund Holders:
Southeastern Asset Management Stake: $118,718,692
Analyst Upside Potential: 41.37%
IAC Inc. (NASDAQ:IAC) is another holding company that deals in digital and media business. The company operates through four main business segments including the Dotdash Meredith, Care.com, Search, and Emerging & Others segments. Its services range from digital content in various formats to healthcare staffing through Care.com and film production through IAC films.
On April 1st, the company completely spun off its entire ownership stake in Angi, making it an independent company. Management noted that IAC Inc. (NASDAQ:IAC) will now focus on its core businesses and look for new growth opportunities. The company had to bear a negative revenue growth quarter due to the underperformance of Angi business. During the fiscal fourth quarter of 2024, the company reported $989.3 million in revenue down 6% year-over-year. However, on the bright side, Dotdash Meredith remained positive with 10% growth year-over-year.
Longleaf Partners Fund mentioned IAC Inc. (NASDAQ:IAC) in its Q1 2025 investor letter, stating that the company was one of the top contributors driven by the spin-off of Angi. Here’s what the fund said about the company:
“IAC Inc. (NASDAQ:IAC) – Digital holding company IAC was another solid contributor for the quarter. In January, the company announced that former CEO Joey Levin would be shifting his focus to become Executive Chairman at IAC portfolio business Angi. Barry Diller is taking on a larger role at IAC while continuing to be its Chairman. Initially, the market reacted cautiously, but as the quarter went on, the potential benefits became clearer, especially in conjunction with the recently completed spin-off of Angi. During the quarter, we published our first Research Perspectives note that provides more details on our investment case for IAC.”
Overall, IAC ranks 7th on our list of billionaire Mason Hawkins’ small-cap stocks with huge upside potential. While we acknowledge the potential of IAC as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than IAC but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
