Value investor Mason Hawkins loaded up on General Electric in the second quarter and also took a stake in growth name Alphabet. Hawkins’ Southeastern Asset Management, which operates a pool of mutual funds called Longleaf Partners Funds, boosted its shares of General Electric by 12% last quarter, according to InsiderScore. In the three-month period ending June 30, the fund held 3.28 million shares worth $208.5 million. Hawkins also bought a stake in Google parent Alphabet for the first time since exiting the stock in 2020; the investor bought 1.5 million shares for a total of $165.7 million. The firm said it is “finding interesting new opportunities in the estimates of the fallen growth this year,” according to the fund’s second-quarter commentary. The classic value investor boosted its stake in General Electric, which has underperformed the S&P 500’s 12% decline this year, saying Wall Street isn’t giving CEO Larry Culp enough credit for the “material improvements” he has made during his tenure. “Today’s balance sheet is stronger than it has been in a long time, and each of the three main business segments have strong paths to earnings growth, regardless of the economic environment,” read the second-quarter commentary , in reference to General. Electric’s three segments in aviation, health and energy. Shares of General Electric are down 19% this year, but have since recovered 22% in the current quarter after a positive second-quarter earnings report, Southeastern Asset Management also opened a position to Alphabet, a growth name that earned the value investor “a lot of surprised looks and a lot of questions from clients” when the company first bought the stock in 2015. At the time, the fund said it liked the search giant’s competitive edge. The company exited the stock in the third quarter of 2020, after reducing its holdings in the company for at least four consecutive quarters. Shares of the Google parent have fallen 18% this year and gained just 9% in the third quarter, underperforming the broader market index. Meanwhile, Southeastern expressed skepticism about whether large integrated oil and pharmaceutical companies “can sustain long-term relative outperformance.” Hawkins’ Longleaf Partners fund outperformed for two decades before the Great Financial Crisis and has underperformed since investors shifted to growth stocks over value stocks, research shows of mutual funds Morningstar. Still, Longleaf Partners declined 15.56% in the second quarter, better than the S&P 500’s 16.10% decline, in a quarter in which it “saw the stock continue to outperform relatively higher than growth,” a possible sign that value stocks may be back in fashion. , according to Southeast’s latest letter to finance shareholders. The fund’s other top holdings were telecommunications stock Lumen Technologies, toy company Mattel and shipping company FedEx.
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