Mason Hawkins’ Southeastern Asset Management Keeps Portfolio Largely Unchanged; Made Major Moves in These Stocks

Chesapeake Energy Corporation (NYSE:CHK)

– Shares Held By Southeastern Asset Management (as of December 31): 49.80 Million

– Value of The Holding (as of December 31): $349.61 million

Chesapeake Energy Corporation (NYSE:CHK) has been one of the oldest equity holdings of Southeastern Asset Management, having made its debut in the fund’s portfolio more than 10 years ago, in the second quarter of 2006. However, it seems like a lot of other investors Southeastern Asset Management has also been losing its patience on the beleaguered oil and natural gas producer. Though  Chesapeake Energy Corporation (NYSE:CHK)’s stock has seen a three-fold increase from the lows it made in February 2016, a lot of analysts are recommending investors to use this bounce to come out of the stock. According to them, the high debt levels on the company’s balance sheet coupled with lack of 2018 natural gas production hedge and large CAPEX budget will prevent the stock from appreciating further in the coming quarters.

Level 3 Communications, Inc. (NYSE:LVLT)

– Shares Held By Southeastern Asset Management (as of December 31): 27.95 Million

– Value of The Holding (as of December 31): $1.57 Billion

Southeastern Asset Management continued its practice of marginally reducing its stake in its top equity holding, Level 3 Communications, Inc. (NYSE:LVLT) and sold 228,279 shares of the company during the fourth quarter. Considering that Level 3 Communications, Inc. (NYSE:LVLT) is one of Southeastern Asset Management’s oldest equity holdings and that its stock has more than doubled since 2013, it’s a wise move by the fund to keep on taking some profits off the table. Moreover, after rumors hit that Centurylink Inc (NYSE:CTL) will acquire Level 3 in mid-October, shares of the latter have rose by almost 25%, but are still trading at a considerable discount to the $66.50 per share being offered by Centurylink. Hence, it would be prudent for a long-term investor to reduce the risk of the deal not going through. Currently, the 15 leading analysts and research firms on the Street who track Level 3 Communications have an average rating of ‘Hold’ and an average price target of $63.61 on it.

Disclosure: None