Insider Monkey

Billionaire Mason Hawkins’ 11 Stock Picks with Huge Upside Potential

Fahad Saleem
11 min read

In This Article:

In this article, we will take a detailed look at the Billionaire Mason Hawkins' 11 Stock Picks with Huge Upside Potential. For a quick overview of such stocks, read our article Billionaire Mason Hawkins' 5 Stock Picks with Huge Upside Potential.

Otis "Mason" Hawkins is a famous value investor who founded Southeastern Asset Management in 1975. Hawkins is estimated to be worth around $1.8 billion and his hedge fund had about $5.5 billion in assets under management as of March 2023. Southeastern Asset Management hunts for bottom-up opportunities around the globe, with the fund's core value and investing philosophy finding its roots in Benjamin Graham's value investing approach. Hawkins is among the traditional class of value investors who staunchly stick to age-old, tried and tested value investing principles. Back in 2008, Hawkins was asked during an interview how he examines intrinsic value of companies. The billionaire said he focuses on free cash flow as he and his team tries to project FCF for the next seven years, "put a low or no growth terminal multiple on the business past 7 years, and discount back at a conservative discount rate."

"The second method calculates net asset value by adjusting book values of assets and liabilities to current liquidation values. (For example, real estate is rarely worth the original cost carried on the books, particularly if it’s been held for a long period.) Third, we check our longhand math against a data base of comparable transactions over the last 30 years, taking into account the interest rate environment at the time of the transactions. We mark our appraisal to the lower of the two values when comparable sales and our longhand math differ," Hawkins added.

Longleaf Partners Fund, where Hawkins is a co-portfolio manager, is also a notable fund backed by Southeastern and regularly posts its performance and commentary on its website. The fund said in its Q4'2023 letter that it more than doubled the Russell 1000 Value Index, "almost equalled the tech-led S&P 500 Index and approximately doubled" its absolute return goal of inflation plus 10%. The fund said when everyone was busy worrying about recession, its team was finding contrarian opportunities:

"Our research team was busy in 2023. At the start of the year when everyone was still predicting an imminent recession, we saw opportunity as contrarians and improved our portfolio with weighting changes and compelling new investments, many of which have already contributed to the portfolio. In the fourth quarter, we have seen a growing consensus about a soft landing. This consensus view concerns us for the same reasons we were excited to be buying earlier in the year when everyone was fearful. However, we are confident in our ability to keep delivering double-digit returns with our portfolio of competitively advantaged, financially strong businesses with management teams that can take self-help measures in any environment. 2023 showed us that our investment approach can add meaningful value, even in a challenging period for bottom-up active equity managers."

Terms and Privacy Policy
Your Privacy Choices
Utah Privacy Notice

Recommended Stories