In this article, we will look at Billionaire Mason Hawkins’ 10 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.
With that let’s take a look at the billionaire Mason Hawkins’ 10 small-cap stocks with huge upside potential.
Mason Hawkins of Southeastern Asset Management
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).
Billionaire Mason Hawkins’ 10 Small-Cap Stocks with Huge Upside Potential
10. Madison Square Garden Sports Corp (NYSE:MSGS)
Market Capitalization: $4.61 billion
Number of Hedge Fund Holders: 42
Southeastern Asset Management Stake: $909,039
Analyst Upside Potential: 30.10%
Madison Square Garden Sports Corp (NYSE:MSGS) is a sports holding company that operates several high-profile sports franchises and related assets. The company operates through the ownership and operation of major sports teams, the development of league teams, and media and sponsorships. It also engages in Esports and operates performance centers.
During the second quarter of fiscal year 2025, Madison Square Garden Sports Corp (NYSE:MSGS) enhanced its sponsorships. It secured multi-year deals with Abu Dhabi’s Department of Culture and Tourism, making Experience Abu Dhabi the official patch partner of the Knicks. Knicks (NBA) is an important team owned by the company. The team made significant moves during the quarter including acquiring five-time NBA All-Star Karl-Anthony Towns.
Financially speaking the company generated a revenue of $357.8 million, reflecting a 9% increase year-over-year. Management noted that the growth was driven by robust demand for its teams along with all other revenue categories posting year-over-year growth. Madison Square Garden Sports Corp (NYSE:MSGS) is one of the billionaire Mason Hawkins’ 10 small-cap stocks with huge upside potential.
9. HF Sinclair Corporation (NYSE:DINO)
Market Capitalization: $5.75 billion
Number of Hedge Fund Holders: 41
Southeastern Asset Management Stake: $96,343,863
Analyst Upside Potential: 37.66%
HF Sinclair Corporation (NYSE:DINO) is an independent energy company based in Texas. The company deals in a wide range of petroleum-based and renewable products. It operates through five key business segments including Refining, Renewables, Marketing, Lubricants & Specialities, and Midstream.
On April 7, Analyst Joe Laetsch from Morgan Stanley maintained a Buy rating on the stock, while keeping the price target at $50. Laetsch highlighted a series of challenges and opportunities for HF Sinclair Corporation (NYSE:DINO). He noted that while the company is expected to face some moderation due to maintenance activities and less favorable crude differentials, however, the refining segment is anticipated to benefit from higher crude throughput. The analyst acknowledged that the Lubricants & Specialties of the company face lower sales volumes, however, he believes that the issue is manageable. Lastly, the Midstream segment is anticipated to post a stable performance thereby helping the company achieve its annual run-rate.
During fiscal 2024, HF Sinclair Corporation (NYSE:DINO) achieved record EBITDA for its Marketing and Midstream segments. The Marketing segment EBITDA grew 23% year-over-year to reach $75 million, whereas the Midstream segment grew 14% to reach $447 million. This enabled the company to return over $1 billion to shareholders through dividends during the year. HF Sinclair Corporation (NYSE:DINO) is one of the billionaire Mason Hawkins’ 10 small-cap stocks with huge upside potential.
Longleaf Partners Fund stated the following regarding HF Sinclair Corporation (NYSE:DINO) in its Q4 2024 investor letter:
“HF Sinclair Corporation (NYSE:DINO) – Energy infrastructure company HF Sinclair, which owns refining, midstream, specialty chemicals, marketing and renewable fuels assets, detracted in the quarter and for the year. The company owns unique assets that are protected from competition and has a great culture focused on value per share growth and realization. We had the opportunity to purchase this strong company in the quarter due to the recent refining downcycle and oil price volatility. We know HF Sinclair well having owned it before in 2015 in the Small-Cap Fund and having followed it since we first visited the company in 2009. As is typical in this industry, quarterly volatility in spread pricing can weigh on the share price in the short term, which is what happened this quarter. We were encouraged to see significant insider buying throughout the quarter as we were buying alongside them.”