We recently published a list of Billionaire Mason Hawkins’ 10 Mid-Cap Stocks with Huge Upside Potential. In this article, we are going to take a look at where Cardinal Health, Inc. (NYSE:CAH) stands against other billionaire Mason Hawkins’ mid-cap stocks with huge upside potential.
Billionaire Mason Hawkins is the founder and chairperson of Southeastern Asset Management. We recently covered Billionaire Mason Hawkins’ 10 Small-Cap Stocks with Huge Upside Potential, discussing his value investment strategy. Here’s a piece from the article:
“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 the 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.”
Mason Hawkins is one of the key figures for value investment literature. He has been a keynote speaker for the Value Investment Conference at the Ben Graham Centre for Value Investing, where he discussed how a company has to be fit both qualitatively and quantitatively. Hawkins noted that Benjamin Graham, who is known as the father of value investing, talked about all great investments being a qualitative and quantitative fit, the quantitative nature being judged by the Price to Value ratio, whereas qualitative health being judged by the competitiveness of the business and the quality of your partner. He further explained that investors should look at businesses that are likely to get better with time, not vice versa. Moreover, on the management side, investors should look at the partners that are running the company and their ability to generate free cash flow and reinvest it very intelligently.
Hawkins also has a famous quote related to Graham’s strategy, which has been cited in a renowned book, The Art of Value Investing: How the World’s Best Investors Beat the Market by John Heins and Whitney Tilson.
“Our view is simply that superior long‐term investment performance can be achieved when financially strong, competitively entrenched, well‐managed companies are bought at prices significantly below their business value and sold when they approach that corporate worth. The quantitative piece of that is that we only want to buy when we can pay less than 60 percent of a conservative appraisal of a company’s value, based on the present value of future free cash flows, current liquidation value and/or comparable sales.”
This qualitative and quantitative value investment strategy is reflected in Southeastern Asset Management’s strategies. The fund has a concentrated stock portfolio of only 40 to 50 companies. Let’s now take a look at stocks with huge upside potential from Billionaire Mason Hawkins’ portfolio.
Our Methodology
To compile the list of billionaire Mason Hawkins’ 10 mid-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 May 4, 2025. Also note that for this article, we have defined mid-cap companies as those with a market capitalization between $10 billion to $55 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).
Cardinal Health, Inc. (NYSE:CAH)
Market Capitalization: $36.12 billion
Number of Hedge Fund Holders: 63
Southeastern Asset Management Stake: $2,079,305
Analyst Upside Potential: 9.34%
Cardinal Health, Inc. (NYSE:CAH) is an international healthcare services and product company based in Dublin, Ohio. Its core business segments include Pharmaceutical and Specialty Solutions and Global Medical Products and Distribution. The company acts as a critical link in the healthcare industry by offering pharmaceutical and medical product distribution, along with a suite of consulting and operational services.
On May 4, Erin Wright from Morgan Stanley maintained a Buy rating on the stock with a price target of $166. During the fiscal third quarter 2025 earnings call, management noted that they generate 99% of their enterprise revenue from the United States. Moreover, approximately 95% of the company’s profit comes from four out of its five business units. Cardinal Health, Inc. (NYSE:CAH) has heavily invested in growing its footprint in the United States by making acquisitions. On April 1, the company announced the completion of the acquisition of the Advanced Diabetes Supply Group (ADSG) for approximately $1.1 billion in cash.
During the third quarter, Cardinal Health, Inc. (NYSE:CAH) reported revenue of $54.9 billion, flat year-over-year. However, the operating earnings grew 98% during the same time to reach $730 million, driven by growth across all business segments. The company ranks as one of billionaire Mason Hawkins’ 10 mid-cap stocks with huge upside potential.
Overall, CAH ranks 9th on our list of billionaire Mason Hawkins’ mid-cap stocks with huge upside potential. While we acknowledge the potential of CAH as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CAH but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
