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Southeastern Asset Management Gains 2 New Holdings, Adds to Several Others

- By Tiziano Frateschi

During fourth-quarter 2016, Mason Hawkins (Trades, Portfolio)'s Southeastern Asset Management bought the following stocks:


The firm purchased 3,527,014 shares of T. Rowe Price Group Inc. (TROW), establishing a new position. The trade had an impact of 2.56% on the portfolio.

It is a financial services holding company that provides investment advisory services to individual and institutional investors. Fourth-quarter net revenues increased 3.7% year over year and net operating income grew 23.8%. The company reported a 28.2% increase in diluted earnings per share.

GuruFocus gives the stock a profitability and growth rating of 9 out of 10. The return on equity (ROE) of 24.21% and return on assets (ROA) of 19.42% are outperforming 89% of the companies in the Global Asset Management industry. Financial strength has a rating of 9 out of 10 with no debt.

Another notable shareholder of the company among the gurus is Bill Nygren (Trades, Portfolio) with 1.45% of outstanding shares, followed by Jeremy Grantham (Trades, Portfolio) with 0.17%, Tom Gayner (Trades, Portfolio) with 0.13%, John Rogers (Trades, Portfolio) with 0.12%, Ron Baron (Trades, Portfolio) with 0.11%, Ken Fisher (Trades, Portfolio) with 0.08% and Mario Gabelli (Trades, Portfolio) 0.07%.

The guru bought 9,044,790 shares of Yum China Holdings Inc. (YUMC), giving it 2.28% portfolio space.

The company operates Pizza Hut and KFC restaurants in China. During the fourth quarter, GAAP EPS increased 15% to 76 cents and EPS from continuing operations grew 19% to 79 cents.

GuruFocus gives the stock a profitability and growth rating of 2 out of 10. The ROE is 23.36% and the ROA is 14.49%. Financial strength has a rating of 4 out of 10. The cash-debt ratio of 34.43 is above the industry median of 0.55.

With its purchase, Hawkins' firm became the largest shareholder of the company among the gurus with 2.37% of outstanding shares, followed by Manning & Napier Advisors Inc. with 0.67%.

Southeastern increased its position in Ralph Lauren Corp. (RL) by 11.81%. The trade had an impact of 0.29% on the portfolio.

The company designs, markets and distributes men's, women's and children's apparel, accessories, fragrances and home furnishings. Its segments include Wholesale, Retail and Licensing. Third-quarter net revenues of $1.7 billion declined 12% compared to last year on a reported basis and were down 11% on a constant currency basis. The company reported EPS of 98 cents and adjusted EPS of $1.86.

GuruFocus gives the stock a profitability and growth rating of 7 out of 10. The ROE of 3.98% and ROA of 2.38% are underperforming 58% of the companies in the Global Apparel Manufacturing industry. Financial strength has a rating of 8 out of 10. The cash-debt ratio of 1.60 is above the industry median of 1.07.

Another notable shareholder of the company among the gurus is Barrow, Hanley, Mewhinney & Strauss with 3.81% of outstanding shares, followed by Third Avenue Management (Trades, Portfolio) with 0.33%, Martin Whitman (Trades, Portfolio) with 0.24%, Joel Greenblatt (Trades, Portfolio) with 0.16%, Jim Simons (Trades, Portfolio) with 0.08%, Baron with 0.04%, Ray Dalio (Trades, Portfolio) with 0.03% and Keeley Asset Management Corp (Trades, Portfolio) with 0.01%.

The firm added to its holding of Sonic Corp. (SONC) by 21.64%. The trade had an impact of 0.21% on the portfolio.

The company operates and franchises a chain of quick-service drive-in restaurants in the United States. It also leases signs and real estate. First-quarter net income per diluted share increased 17% from the comparable prior-year period. The company repurchased 2 million outstanding shares.

GuruFocus gives the stock a profitability and growth rating of 9 out of 10. The ROA of 10.26% and ROC of 30.29% are outperforming 69% of the companies in the Global Restaurants industry. Financial strength has a rating of 5 out of 10. The cash-debt ratio of 0.07 is below the industry median of 0.55.

RS Investment Management (Trades, Portfolio) is another notable shareholder of the company among the gurus with 3.67% of outstanding shares, followed by Greenblatt with 1.28%, Steven Cohen (Trades, Portfolio) with 1.02% and Paul Tudor Jones (Trades, Portfolio) with 0.04%.

Southeastern added to its position in Vipshop Holdings Ltd. (VIPS) by 81.77%, impacting the portfolio by 0.04%.

The company operates an online platform that offers products to consumers in China through flash sales on its vipshop.com and vip.com websites. Fourth-quarter total net revenue increased 36.5% and total orders grew 26%. Gross profit increased 33.4% and net income grew 51.7%.

GuruFocus gives the stock a profitability and growth rating of 7 out of 10. The ROE of 43.84% and ROA of 9.57% are outperforming 84% of the companies in the Global Specialty Retail industry. Financial strength has a rating of 7 out of 10. The cash-debt ratio of 1.09 is above the industry median of 0.84.

The largest shareholder of the company among the gurus is Chase Coleman (Trades, Portfolio) with 0.85% of outstanding shares, followed by Chris Davis (Trades, Portfolio) with 0.57%, Cohen with 0.35%, Matthews China Fund (Trades, Portfolio) with 0.16%, Fisher with 0.04% and Columbia Wanger (Trades, Portfolio) with 0.04%.

The firm added to its Intrawest Resorts Holdings Inc. (SNOW) stake by 6.67%. The trade has an impact of 0.01% on the portfolio.

Intrawest is a mountain resort, adventure and real estate company that delivers distinctive vacation and travel experiences to its customers in North America. The company's business segments are Mountain, Adventure and Real Estate. During the second quarter, the company recorded a net loss of $18.7 million, up from a net loss of $27.3 million in the prior year. Adjusted EBITDA increased $14 million to $7.1 million, compared to a loss of $6.9 million the year before

GuruFocus gives the stock a profitability and growth rating of 6 out of 10. The ROE of 22.72% and ROA of 4.89% are underperforming 99.99% of the companies in the Global Leisure industry. Financial strength has a rating of 4 out of 10. The cash-debt ratio of 0.23 is below the industry median of 0.75.

Simons is the company's largest shareholder among the gurus with 3.63% of outstanding shares.

Disclosure: I do not own any shares of any stocks mentioned in this article.

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This article first appeared on GuruFocus.