Mason Hawkins (Trades, Portfolio) has been the chairman and CEO of Southeastern Asset Management since 1975. The firm is a value investment firm and looks for three things in a business: good business, good people and a good price. He seeks to invest in businesses that are easily understandable, have strong balance sheets, are run by capable and shareholder friendly management, and trading at less than intrinsic value. The company will ascertain the intrinsic value of the business by looking at the asset value of the business or calculating the present value of future free cash flow. He is a very concentrated investor, normally holding less than 25 stocks in a portfolio at any given time.
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The intrinsic value of L
Here are three companies from the portfolio that we find interesting at current levels:
Loews Corp. (NYSE:L) - Forward P/E of 14.39, P/TBV of 0.75, EV/EBIT of 14.45
Loews is a holding company owned and managed by the Tisch family. The company engages in commercial property and casualty insurance, operation of offshore oil and gas drilling rigs, exploration, production, and marketing of natural gas and oil, operation of interstate natural gas pipeline systems and the operation of hotels. The company's shares are down 20% from the highs in late 2013 and trade at $38.40 per share (near 52-week lows).
In its most recent fiscal quarter, Loews reported revenue of $3.16 billion, compared to $3.59 billion in the same quarter a year ago. Net earnings were $182 million (50 cents per share diluted) compared to $208 million (55 cents per diluted share) in the same periods.
The numbers came in lower than expected with revenues declining ~8% year-over-year because of lower insurance premiums, investment income and contract drilling fees. The company continues to maintain a strong balance sheet with ~$41 billion in cash reserves.
Shares look appealing at current levels with a forward P/E of 14.39, P/TBV of 0.75, and EV/EBIT of 14.45.
Scripps Networks (SNI) - Forward P/E of 12.29, FCF yield of 10.35%, EV/EBIT of 10.29, and dividend yield of 1.56%
Scripps develops lifestyle oriented content for television and the internet. Their brands include the Food Network, Home and Garden Television, Travel Channel, Cooking Channel, DIY Network, and Great American Country. The company's shares are down over 32% over since the highs of late 2013 and trade at $59.00 per share.
In its most recent fiscal quarter, Scripps reported revenue of $776 million, compared to $644 million in the same quarter a year ago. Net earnings were $125 million (96 cents per share diluted) compared to $131 million (93 cents per diluted share) in the same periods.