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

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With around $35 billion in assets under management (AUM) (as of 2014), the Tennessee-based Southeastern Asset Management is considered one of the largest hedge funds on the Street. Founded in 1975 by noted value investor Mason Hawkins, Southeastern Asset Management became a global investment management powerhouse in the next three decades with offices in four cities across the world and clients including several reputed institutional investors.

As of December 31, 2016, Southeastern has an equity portfolio worth $10.36 billion, according to its latest 13F filing. According to the filing, during the fourth quarter the firm’s long US equity portfolio had a quarterly turnover of 6.45%, which is low by general hedge fund standards but normal for firms that follow a value-investing approach. Southeastern’s equity portfolio was considerably top-heavy going into 2017 with its top-10 holdings alone amassing 72.5% of the value. In this article, we are going to focus on the five major changes Southeastern Asset Management made during the fourth quarter and analyze the recent performance of those stocks.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 39.7%, topping the 24.1% gain registered by S&P 500 ETFs. Insider Monkey’s enhanced small-cap strategy registered gains of more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points in the last 4.5 years (see the details here).

01 Mason Hawkins

Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL)

– Shares Held By Southeastern Asset Management (as of December 31): 3.05 Million

– Value of The Holding (as of December 31): $48.46 Million

First up is Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL), in which Southeastern Asset Management lowered its stake by 58% during the fourth quarter. Shares of the Hong Kong-based casino operator have gone nowhere since Southeastern initiated its stake in the company in the fourth quarter of 2015, which can be one of the reasons for the firm to significantly lower its stake in the company. On February 13, prior to the company’s fourth quarter earnings release, analysts at Morgan Stanley upgraded Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL)’s stock to ‘Overweight’ from ‘Equal Weight’ while keeping their price target unchanged at $19. For its fiscal 2016 fourth quarter, the company reported EPS of $0.19, which was in-line with the consensus estimate, on revenue of $1.19 billion, which beat analysts’ estimate by $30 million.

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