Chesapeake Energy Corporation (CHK), FedEx Among Mason Hawkins’ Favorite Stocks

Page 1 of 2

Mason Hawkins founded Southeastern Asset Management in 1975 and tends to invest for the long-term, not worried by the interim ups and downs of the markets. His firm remains employee-owned and manages roughly $32 billion in assets. In reviewing Southeastern’s most recent 13F – which reveals the majority of the firm’s publicly traded equity holdings – we have outlined its top five stock picks (check out the rest of Southeastern’s 13F portfolio).

Mason Hawkins

Chesapeake Energy Corporation (NYSE:CHK) is Southeastern’s top 13F holding, with 7.3% of the firm’s 13F invested in the energy company. Over the next few years, Chesapeake hopes to transition from a gas producer to a liquids producer. As of the third quarter, Chesapeake had cut its gas rigs to 9 – compared to 75 in 2011, and now runs almost 100 liquid rigs. Chesapeake’s 25/25 plan includes targeting debt reduction of 25% through 2013, but unfortunately, the oil and gas company is going in the opposite direction, having increased its long-term debt by 50% over the past year.

Chesapeake has built up a solid asset base, which in part accounts for its $15.7 billion in long-term debt, but the company is still burning cash on CapEx, having spent $9.4 billion through 3Q, which is well above its estimated $8.5 billion for the full year of 2012. Obviously, high debt levels and overly aggressive CapEx gives us reason for concern. For the time being, the oil and gas company is still paying its nine-cent quarterly dividend, which is a $240 million annual payout, but Chesapeake had only $140 million in cash as of 3Q. Billionaire Carl Icahn is alongside Southeastern in Chesapeake (check out Carl Icahn’s big bets).

Loews Corporation (NYSE:L) is Southeastern’s second largest 13F holding and is not your typical property and casualty insurance company, operating a number of other businesses, including a string of hotels. Per Loews’ 3Q 13F (which they file since they own 90% of CNA Financial), the company’s big investments include CNA, Boardwalk Pipeline Partners and Diamond Offshore Drilling. Aside from its majority stake in CNA, Loews’ ownership of its subsidiaries include a 50% ownership of Diamond Offshore and 60% of Boardwalk Pipeline Partners.

The majority of the company’s revenues – 70% for the first nine months of 2012 – come from CNA. Part of what will continue to put pressure on Loews is its vast exposure to the insurance market, where a low interest rate environment is putting pressure on investment income. With no perfect competitors it is tough to value Loews. On a P/E basis, it trades well above its insurance peers at 19x earnings, compared to Chubb (11x) and Travelers (10x). On a book value basis, Loews’ stock trades at only $41.98 compared to its tangible book value of $50. Billionaire Jim Simons is one of Loews’ top-name investors (check out Jim Simons’ top picks).

What about the rest of Mason Hawkins’ top picks?

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

The 10 Biggest Tax Havens in the World to Stash Your Money

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!