We recently published a list of Billionaire Mason Hawkins’ 10 Small-Cap Stocks with Huge Upside Potential. In this article, we are going to take a look at where Empire State Realty Trust, Inc. (NYSE:ESRT) stands against other billionaire Mason Hawkins’ small-cap stocks with huge upside potential.

Mason Hawkins’s Value Investment Strategy

Mason Hawkins is a prominent American investor, known for being the founder and chairman of Southeastern Asset Management. Hawkins holds a Bachelor of Arts in Finance from the University of Florida and later did his MBA in Finance from the University of Georgia. Before founding Southeastern Asset Management, the billionaire gained experience as a Director of Research at Atlantic National Bank and First Tennessee Investment Management. There he developed his value investment strategy and has since been known for his discipline in value investing. His fund Southeastern Asset Management also holds the same reputation, which can be witnessed through his concentrated portfolio of around 40 to 50 stocks. Southeastern Asset Management services 47 clients at the moment, with $5,271,901,660 as assets under management as of March 2024.

Value investment is an investment strategy that employs buying stocks of well-managed and quality companies at prices significantly below their intrinsic value. The core of Hawkins’ strategy is to purchase equities when their market price is no more than 60% of the firm’s appraisal of their intrinsic value. Value investors believe that the market overreacts to economic news, which leads to movement in stock prices, however, this news does not affect the long-term fundamentals of a company. Therefore, investors like Mason Hawkins do not follow the herd and use financial research and analysis to find quality companies. Value investors are also known for holding companies for a long term, but also actively ferret out stock that the market is underestimating.

Hawkins’ disciplined and research-based investment strategy has earned him widespread recognition. He achieved Investor’s Lifetime Achievement Award in 2005 and was also named Domestic Equity Fund Manager of the Year by Morningstar in 2006.

Under the current market condition, Hawkins’ value investment strategy has led Southeastern Asset Management’s attention towards small-cap stocks. While the small-cap stocks have largely underperformed the market when compared to their large-cap counterparts. However, according to Francis Gannon, Co-Chief Investment Officer at Royce Investment Partners, small-caps are attractively priced for long-term investment opportunities. Gannon’s investment advice aligns with Hawkins’s strategy, as he suggests investing in quality small-cap companies with strong fundamentals, low debt, established long-term earnings, and significant upside potential.

Our Methodology

To compile the list of billionaire Mason Hawkins’ 10 small-cap stocks with huge upside potential, we sifted through 13F filings of Southeastern Asset Management, from Insider Monkey. From these filings, we checked each stock’s upside potential from CNN and ranked the stocks in ascending order of the upside potential. We have also added the stake Southeastern Asset Management holds in each company and the hedge fund sentiment around each stock. Please note that the data was recorded on April 28, 2025. Also note that for this article we have defined small-cap companies as those with a market capitalization between $1 billion to $10 billion.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Aerial view of a modern city skyline, showcasing a diversified real estate portfolio.

Empire State Realty Trust, Inc. (NYSE:ESRT)

Market Capitalization: $1.19 billion

Number of Hedge Fund Holders: 19

Southeastern Asset Management Stake: $16,068,426

Analyst Upside Potential: 40.06%

Empire State Realty Trust, Inc. (NYSE:ESRT) is a real estate investment trust, which focuses on managing and operating a portfolio of properties in New York City. It has 10 office properties, out of which 9 are in midtown Manhattan. The company operates through two main business segments namely, Real Estate Segment and Observatory Segment.

On April 17, the company announced signing two lease renewal and expansion agreements. One with Carolina Herrera, Ltd. for 34K Square Feet at 501 Seventh Avenue and the other with Workday Inc. for the Empire State Building. Moreover, Empire State Realty Trust, Inc. (NYSE:ESRT) released its fiscal 2024 full-year results highlighting three consecutive years of growth in leased space. During the year, the company leased 1.3 million square feet, up from 982,000 square feet leased in 2023. Management noted that its Manhattan office area, which comprises the majority of its property portfolio, is 94% leased, reflecting the high demand for the company’s properties.

Considering the improved performance of the company. On March 25, Wolfe Research upgraded Empire State Realty Trust, Inc. (NYSE:ESRT) to Outperform from Peer Perform with a $10 price target. It is one of the billionaire Mason Hawkins’ 10 small-cap stocks with huge upside potential.

Overall, ESRT ranks 8th on our list of billionaire Mason Hawkins’ small-cap stocks with huge upside potential. While we acknowledge the potential of ESRT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ESRT but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

 

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

 

Disclosure: None. This article is originally published at Insider Monkey.