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Southeastern Asset Management Divests 70% of Deltic Timber in Late November

- By James Li

Mason Hawkins (Trades, Portfolio) Southeastern Asset Management disclosed Dec. 11 that it divested 70% of its stake in Deltic Timber Corp. (DEL) on Nov. 30.


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The firm sold 1,293,859 shares at $91.59 per share, trimming its position to just 533,699 shares. With this transaction, Southeastern pared 1.4% of its portfolio.

Company background

The Arkansas-based company engages in the growing and harvesting of timber and the manufacturing and marketing of lumber. Deltic said third-quarter net earnings increased $1 million from the prior-year quarter primarily due to higher operating incomes across the company"s Woodlands and Real Estate segments. Woodlands reported a $1.3 million increase in operating income primarily due to higher timber sales volumes. Likewise, Real Estate reported a $1.2 million increase in operating income primarily due to higher residential unit sales.

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GuruFocus ranks Deltic"s profitability 8 out of 10 as the company"s operating margin, Greenblatt return on capital and three-year CAGR of sales outperform approximately 70% of global competitors. Although the company offers good growth potential, Deltic"s share price and price-book ratio are near a 10-year high, suggesting moderate overvaluation. Additionally, the company"s price-sales ratio and dividend yield both rank lower than 92% of global competitors.

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Firm also disclosed LVLT sale

Southeastern also disclosed that it divested its entire stake in Level 3 Communications Inc. (LVLT). On Oct. 30, CenturyLink Inc. (CTL) announced in a press release that the Federal Communications Commission approved its merger with Level 3, completing the required regulatory approvals needed to close the transaction. The merger closed Nov. 1 according to a press release from Level 3.

Disclosure: I do not have positions in the stocks mentioned.

This article first appeared on GuruFocus.