Recent Performance Of Fairholme's Largest Equity Holdings

by: Zvi Bar

Fairholme Capital Management is well regarded as one of the most popular and high-profile asset managers. Its founder, Bruce Berkowitz, is considered by many to be one of the better large investors on the Street, and also a contrarian.

Fairholme is well known for holding fewer, larger positions than most funds of its size, similar to Warren Buffett's strategy. The fund and Bruce Berkowitz have come under pressure within 2011 due to the poor performance of many financials, which are core to the fund’s holdings.

Below is a chart listing the largest equity holdings within Fairholme’s most recent 13F. I have also provided the 1-month, 6-month and 2011-to-date share price performance rates for these equities.

(Click to enlarge)

Fairholme’s filing also included information showing many transactions made within during the third quarter of 2011. Most of Fairholme’s large transactions were reductions within financials. Fairholme sold out of Morgan Stanley (MS), having previously held nearly 12 million shares, and nearly liquidated its entire Goldman Sachs (GS) stake for what was valued at over $896 million at the end of the third quarter. Fairholme now owns 23,000 shares of GS, having previously held just under 6 million.

Fairholme also reduced its positions in American International Group (AIG), Regions Financial (RF) and Citigroup (C). AIG is still Fairholme’s largest position, owning about $2.2 billion. Fairholme also sold about 5 million shares in Brookfield Asset Management, but still holds over 22.24 million shares.

Fairholme also made some minor purchases within the financials. Fairholme added over 5.3 million shares of Bank of America (BAC), and now owns over 105 million shares in the bank. Fairholme also increased its position in Berkshire Hathaway (BRK.A) (BRK.B), and MBIA (MBI).

Disclosure: I am long C.

Disclaimer: This article is intended to be informative and should not be construed as personalized advice as it does not take into account your specific situation or objectives.

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