3. General Electric Company (NYSE: GE)
Value: $349,656,000
Percent of Mason Hawkins’ 13F Portfolio: 7.8%
Number of Hedge Fund Holders: 69
World energy leader provider General Electric Company ranks 3rd on the list of 10 best stocks to buy according to billionaire Mason Hawkins. Headquartered in Boston, Massachusetts, General Electric Company produces vast products and services ranging from aircraft engines, power generation, and oil and gas production. The company recently made a deal with Invenergy, a US-based energy production company, to provide onshore wind turbines to three wind farms in Oklahoma. Once completed, American Electric Power Company Inc (NASDAQ:AEP) will own the farms, with a total capacity of 1485MW.
In March, Deutsche Bank raised its price target for General Electric from $13 to $14 and reiterated its Hold rating. The company has a market cap of $117.6 billion and a full-year 2020 revenue of $75.62 billion. Shares of GE surged 95% over the last twelve months. As of the end of the fourth quarter of 2020, Southeastern Asset Management owns 32.3 million shares of GE worth $349 million. General Electric accounts for 7.8% of Mason Hawkins’ total portfolio.
The number of bullish hedge fund positions increased by 24 in the fourth quarter. Southeastern Asset Management was in 69 hedge funds’ portfolios at the end of December.
Longleaf Partners Fund mentioned that thanks to strict cost control, GE Aviation made a phenomenal $356 million profit in the third quarter in its Q4 2020 investor letter:
“General Electric (GE) (-2%, 0.17%; 74%, 3.56%), the Aviation, Healthcare and Power conglomerate, was the top contributor in the fourth quarter, taking its YTD performance into slightly positive territory after a very difficult first half. The company’s crown jewel Aviation business sells and maintains commercial and military jet engines. With air travel frozen, this year’s second quarter was its worst in over a century of operating history with a $680 million operating loss. 3Q revenues improved sequentially as some flights resumed but still declined 39% year-over-year. Yet GE Aviation earned a remarkable $356 million in the third quarter due to extreme cost discipline. With fewer expenses, the same world-class competitive position and favorable long-term air-travel growth prospects, Aviation should keep improving incrementally with the potential to emerge stronger than ever within several years. GE Healthcare revenues, excluding non-recurring ventilator sales for COVID treatment, also improved 3% year-over-year in an encouraging performance. GE also took steps to give back in 2020 by working to help develop thousands of ventilators to aid coronavirus patients. The stock has roughly doubled from its March low as business results improved, in large part due to CEO Larry Culp’s excellent management. Please stay tuned for the next episode of the Price-to-Value Podcast in which Vice-Chairman Staley Cates interviews Larry Culp on Lean manufacturing, GE’s culture, navigating COVID and his outlook for the business.”
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