Tracking Bruce Berkowitz’s Fairholme Portfolio – Q2 2024 Update (MUTF:FAIRX)

This article is part of a series that provides an ongoing analysis of the changes made to Fairholme’s 13F stock portfolio on a quarterly basis. It is based on Fairholme’s regulatory 13F Form filed on 08/14/2024. Please visit our Tracking Bruce Berkowitz’s Fairholme Fund Holdings article for an idea on how his holdings have progressed over the years and our previous update for the fund’s moves during Q1 2024.

Berkowitz’s 13F stock portfolio value decreased from $1.51B to $1.39B this quarter. The 13F portfolio currently has most of the assets invested in St. Joe Companies.

Berkowitz’s flagship Fairholme Fund (MUTF:FAIRX) has generated significant alpha since its December 1999 inception: it returned at an annualized rate of ~10.3% compared to ~7% for S&P 500 index. FAIRX has, however, underperformed over the most recent 10-year period. The other fund under Fairholme umbrella is the Fairholme Focused Income Fund (MUTF:FOCIX). Equity holdings that are not in the 13F report include Fannie Mae (OTCQB:FNMA) pfds, Freddie Mac (OTCQB:FMCC) pfds, and Imperial Metals (OTCPK:IPMLF). The stake in Fannie/Freddie pfds was reduced by ~55% during 2023 following a court loss last January. The stake was further reduced to a miniscule 0.1% of the portfolio stake as of May 2024.

Stake Increases:

Enterprise Products Partners (EPD): EPD is an 11.35% of the portfolio position, primarily built over the four quarters through Q2 2022 at prices between ~$21 and ~$28. There were minor increases in the four quarters through Q2 2023. That was followed by a ~15% increase during Q3 2023 at prices between $25.38 and $26.91. The stock is now at $29.69. There was a minor ~3% stake increase during Q4 2023 and a ~4% increase in the last quarter. There was a marginal increase this quarter.

Note: Bruce Berkowitz gave a bullish take on EPD in a WealthTrack interview on November 2^nd 2023.

Bank OZK (OZK): The 1.62% OZK stake was purchased during Q3 2023 at prices between $35.94 and $44.23. The next quarter saw the position sold down by around two-thirds at prices between ~$35 and ~$52. The position was rebuilt during the last quarter at prices between ~$41.50 and ~$50. This quarter saw a ~70% stake increase at prices between ~$38 and ~$49. It is now at $42.04.

Berkshire Hathaway (BRK.A) (BRK.B): Q1 2019 saw a 5.6% of the portfolio stake purchased at prices between $188 and $209. The stake has wavered. Recent activity follows. Q3 2022 saw the position almost doubled at prices between ~$264 and ~$307. There was a roughly one-third reduction in the next quarter at prices between ~$264 and ~$319. That was followed by a ~22% selling during Q3 2023 at prices between ~$341 and ~$371. The next quarter saw a ~140% stake increase at prices between ~$332 and ~$363. The last quarter saw the position sold down again by ~60% at prices between ~$359 and ~$421. The stock currently trades at ~$452 and the stake is now at 1.5% of the portfolio. There was a marginal increase this quarter.

Stake Decreases:

St. Joe Company (JOE): ~85% of Fairholme’s 13F assets are in St. Joe stock. The bulk of the position was purchased in the 2008-2009 timeframe, and there have only been minor adjustments since. The last three quarters of 2017 had seen a combined ~14% increase at prices between $16.35 and $19.55. Since then, the activity has been minor. The stock is now at $58.64. There was minor trimming in the last ten quarters. They control around one-third of the business.

W. R. Berkeley (WRB): The very small 0.71% of the portfolio stake in WRB was reduced marginally this quarter.

Kept Steady:

Apple Inc. (AAPL): The minutely small 0.04% AAPL stake was kept steady this quarter.

The spreadsheet below highlights changes to Fairholme’s 13F stock holdings in Q2 2024:

Source: John Vincent. Data constructed from Fairholme’s 13F filings for Q1 2024 and Q2 2024.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.