HF Sinclair (DINO): A Small-Cap Gem in Mason Hawkins' Value-Driven Portfolio

The energy sector has long been a fertile ground for value investors, and hf sinclair corporation (NYSE:DINO) has emerged as a standout pick for billionaire investor Mason Hawkins of Southeastern Asset Management. With a $96.3 million stake as of April 2025, Hawkins has placed his bets on this small-cap refiner and renewable fuels producer—despite a market cap that has dropped 52% year-over-year to $5.78 billion. What makes DINO compelling enough to warrant attention from one of Wall Street’s most disciplined investors? Let’s dissect the data.

text2imgAerial view of HF Sinclair’s refinery with solar panels, symbolizing its transition to renewable energy/text2img

The Case for HF Sinclair: SEC Filings and Institutional Backing

Hawkins’ confidence in DINO is reflected in Southeastern’s active SEC filings during Q1 2025. Multiple Form 4 filings on April 14—document IDs like 0001415889-25-010624.pdf and 0001415889-25-010628.pdf—indicate ongoing adjustments to the firm’s holdings. Meanwhile, a Schedule 13G/A filing on February 10, 2025 (0000046250-25-000016.pdf), solidifies its long-term commitment. These filings are critical because they align with Hawkins’ value-investment philosophy: a concentrated portfolio of 40–50 stocks, each trading at 60% or below their intrinsic value.

Ask Aime: What makes DINO compelling enough for Hawkins?

DINO fits this mold. With a market cap of $5.75 billion (as of April 25, 2025), it’s squarely in the small-cap category, yet its fundamentals suggest upside. Analysts project a 37.66% price target, with Morgan Stanley’s Joe Laetsch maintaining a “Buy” rating and a $50 price target—$19.31 above April’s closing price of $30.69.

Operational Strengths: EBITDA Growth and Dividend Discipline

HF Sinclair’s financial performance underpins its appeal. In 2024, its Marketing segment—responsible for refined products like gasoline—achieved a 23% YoY EBITDA jump to $75 million, while the Midstream segment (pipelines and storage) grew 14% to $447 million. These figures are no accident: the company has returned over $1 billion to shareholders via dividends since 2022, signaling financial stability.

visualHF Sinclair’s (DINO) stock price performance from 2023 to present/visual

Despite these positives, DINO’s stock has lagged year-over-year, dropping from a July 2024 peak of $42.37 to $30.69 by April 2025—a 27.6% decline. This divergence between strong fundamentals and weak stock performance is a classic value-investing scenario.

Analyst Sentiment and Institutional Momentum

Hawkins isn’t alone in betting on DINO. As of April 2025, 41 hedge funds held stakes in the company, including notable names like Tiger Global and Point72 Asset Management. Analysts at Cowen and Barclays have also upgraded their ratings to “Overweight,” citing DINO’s renewable diesel expansion—a $2 billion project to produce 120,000 barrels per day by 2030.

The company’s pivot to renewables is strategic. With 80% of its refining capacity dedicated to light products (gasoline, diesel), DINO is less exposed to crude oil price volatility compared to larger peers. This focus aligns with Francis Gannon’s advice (Royce Investment Partners) to prioritize small-caps with low debt and stable cash flows—a profile DINO meets, with a debt-to-equity ratio of just 0.36x.

Risks and Considerations

No investment is without risks. DINO’s midstream operations face pressure from narrowing crude oil differentials, and its Lubricants segment saw sales dip in early 2025. Additionally, the stock’s recent underperformance—its 52-week range is $27.41–$42.37—suggests near-term uncertainty.

visualHF Sinclair’s EBITDA growth in Marketing and Midstream segments from 2023 to 2024/visual

Conclusion: A Calculated Bet on Value

HF Sinclair is a compelling play for investors willing to look beyond short-term volatility. With 37.66% upside potential, 41 hedge funds in its corner, and a $5.75 billion market cap that’s undervalued relative to its EBITDA growth, DINO ticks the boxes of Hawkins’ value strategy.

The $50 price target from Morgan Stanley—implying a 63% return from April’s lows—is ambitious but grounded in DINO’s operational resilience. Meanwhile, its renewable diesel expansion and dividend discipline position it to thrive in a shifting energy landscape.

For long-term investors, DINO offers a rare combination: a small-cap with institutional credibility, sector-specific tailwinds, and a track record of EBITDA growth. While risks exist, the data suggests Hawkins’ bet could pay off—if investors have the patience to wait out the market’s current skepticism.

Final note: Always consider diversification and consult a financial advisor before making investment decisions.