Southeastern Asset Management Comments on DreamWorks

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As noted above, DreamWorks ( DWA ) (+60%; +5.0%), the film studio and multimedia company, was the FundAAAs largest holding and drove much of the return in the quarter, when Comcast announced an all cash acquisition for $41 per share. As our discipline dictates, we sold our stake when the price rose to our appraisal. DreamWorks was the kind of opportunity Southeastern hopes to findAAA a company with high quality, stable assets but volatile earnings being mispriced in a period when the market is rewarding companies with more predictable earnings and high dividend yields. We started buying DreamWorks in the third quarter of 2014 at $19 following disappointing new movie releases. Our appraisal hinged on the valuable film library and DreamWorksAAA growing success in TV and web content as well as licensing. We partnered with a strong board and owner-operator CEO, who built the companyAAAs brands, developed a presence in China, managed costs, and ultimately monetized the company at full value.

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DWA 15-Year Financial Data
The intrinsic value of DWA
Peter Lynch Chart of DWA

From Southeastern Asset Management's Small-Cap Fund Commentary.

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