Bruce Berkowitz

Bruce Berkowitz

Last Update: 02-15-2017
Related: Fairholme Fund
Fairholme Focused Income Fund

Number of Stocks: 8
Number of New Stocks: 0

Total Value: $983 Mil
Q/Q Turnover: 0%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Bruce Berkowitz Watch

  • Fairholme's Berkowitz Responds to Court Ruling Against Hedge Fund Suits of Fannie Mae

    Bruce Berkowitz (Trades, Portfolio), who has about 30% of his Fairholme Fund (Trades, Portfolio)s in the government sponsored mortgage entities, responded to a judge's ruling against his and hedge funds' right to sue on Wednesday in the release below:


    MIAMI, FL – Last week, Fannie Mae (FNMA) and Freddie Mac reported annual net income of $12.3 billion and $7.8 billion, respectively. This remarkable performance – their fifth straight year of positive earnings, with growing books of business – is further proof that these indispensable mortgage insurers have been successfully rehabilitated. Fannie Mae and Freddie Mac are fulfilling their historic role of ensuring adequate levels of liquidity to lenders of all sizes. In 2016, Fannie Mae and Freddie Mac provided almost $1.1 trillion in mortgage financing to America’s housing market, enabling millions of American families to buy, refinance, or rent homes. Today, after eight long years in federal conservatorship, Fannie Mae and Freddie Mac stand irreversibly transformed: both companies are back to basics, squarely focused on executing their core mission of providing liquidity, access to credit, and affordability to qualified borrowers in all U.S. housing markets at all times. No one does it better.

      


  • Bruce Berkowitz Sells Final Financial Crisis Bet Bank of America

    Completing his exit from Bank of America (NYSE:BAC) in the fourth quarter also erased the final holdover from Bruce Berkowitz’s famed bets on distressed financials brought to their knees in the 2008 market crisis.


    The Fairholme Fund (Trades, Portfolio)s investor sold his remaining 1,713,203 shares of Bank of America in the fourth quarter for around $32 million or $19 per share. It was their highest quarterly average price since the value-oriented investor started his position in early 2010. The bank, which had 5,700 branches and 57 million customers, was trading around $18 per share.

      


  • Bruce Berkowitz Comments on Atwood Oceanics

    Stressed energy markets led us to invest in senior bonds of offshore driller Atwood Oceanics (NYSE:ATW). The bonds were purchased at attractive prices relative to the backlog of future cash flow from drilling operations and the value of Atwood’s modernized fleet. Thus far, Atwood has weathered tough conditions as the industry slowly rebalances between rig supply and demand in a lower commodity price environment. Atwood’s management has reduced cash operating costs by 25% while extending contracts with customers and suppliers. Atwood also reduced the outstanding senior bond class by over 30% through debt repurchases and raised liquidity through an equity offering. All actions combine to give us comfort that Atwood is positioned to capitalize on the eventual upcycle.

      


  • Bruce Berkowitz Comments on Chesapeake Energy

    In early 2016, news on all things related to oil and natural gas devoted little coverage to how declining commodity prices were forcing energy companies to reduce supply, lower debt, and cut operating costs. Time and again, history shows that a commodity price forges its own anchor. Our credit investments in Chesapeake Energy (NYSE:CHK) performed exceptionally well in 2016 due to the combination of operational efficiencies driving down unit costs, higher natural gas prices, and success with debt buybacks and asset sales.

      


  • Bruce Berkowitz Comments on Imperial Metals Corp

    Imperial Metals Corporation (TSX:III)


    Depressed copper prices made for a challenging operating environment during much of 2016, and Imperial ended the year with a C$65 million equity offering to improve liquidity – diluting each share of common stock by approximately 15%. Nevertheless, Imperial managed to successfully launch Red Chris and mining operations are running at full capacity. On our most recent site visit, we observed large quantities of “rock” being moved to access concentrated mineralization and finish tailing dam embankments. We expect the company to spend 2017 fine tuning its recovery processes and widening the mining pit. Improved copper prices and higher recovery rates will enable profitable operations, a reduction of leverage, and execution of a plan to double or triple mining production at this world-class asset.

      


  • Bruce Berkowitz Comments on St. Joe

    To outperform in sports, you must go to where the ball will be – not where it already is. The same is true of investing and our investment in St. Joe (NYSE:JOE). Northwest Florida Beaches International Airport, the newest U.S. international airport, is approaching 1,000,000 “travel legs” per year. Becca Hardin, President of the Bay Economic Development Alliance, which helps bring business to the airport and surrounding area, recently commented: “We’ve got a couple of really hot prospects that are looking at some sites in VentureCrossings … We think 2017 is going to be the year that some of these projects come into fruition and we will be able to announce them.”7 Joe is growing and has the assets and entitlements to meet multi-generational demand for affordable housing, commercial facilities, healthcare, education, and transportation. See for yourself at www.venturecrossings.com and www.watersound.com – you’ll get the idea. As St. Joe’s Chairman, I cordially invite you to visit the beginning of Florida’s newest metropolis.

      


  • Bruce Berkowitz Comments on Seritage

    Fortune Magazine notes that “there is still a lot of life in that American mainstay, the suburban mall,” but the tenant mix is shifting to accommodate new consumer preferences.5 Indeed, growing demand for “very un-mall-like grocery stores, spin-class fitness shops, and entertainment centers” presents attractive opportunities for landlords such as Seritage, who can convert existing retail square footage to “non-retail spaces that people want.”6 In 18 months, Seritage (NYSE:SRG) has re-leased 2.2 million square feet and commenced or completed 48 wholly owned redevelopment projects. Sears now represents 65% of signed lease revenue; down from 90%. Headlines overlook this renter diversification and ignore Seritage’s acceleration with large mixed-use redevelopments in Santa Monica (California), Aventura (Florida), Hicksville (New York), and Redmond (Washington).

      


  • Bruce Berkowitz Comments on Sears

    Focusing on tangible assets has served us over many years, but most believe Sears (NASDAQ:SHLD) to be the exception to the rule. Disruptive technologies; near-zero cost of capital; and few, if any, legacy obligations provide young competitors with great advantages over old-line operators. Today, Airbnb is the largest lodging company in the world without owning a single hotel room. Uber is the world’s largest taxi company without owning a car (and perhaps soon without utilizing a single driver). Intuit’s Rocket Mortgage lends only via the net. Amazon crushes competition without a physical retail footprint. Mega-tech companies are now trusted in all aspects of personal and corporate life. I’m reminded of this every day by my Fairholme team, our clients, fellow directors at Sears, and friends.


    Bottom line: Sears has degraded net asset values, but there is still much left and the company is fixing its cash drain. Recent corporate announcements – including (i) the proposed sale of Craftsman to Stanley Black and Decker for a cumulative $775 million plus a 15-year royalty stream on all third-party Craftsman sales to new customers and the use of a perpetual license for the Craftsman brand by Sears (royalty free) for 15 years; (ii) shuttering 150 unprofitable stores in 2017 on top of the roughly 235 stores that were closed in 2016; and (iii) marketing certain properties within the company’s real estate portfolio to further unlock value – reflect an acceleration in the company’s transformation efforts consistent with Chairman Eddie Lampert’s recent public comments:

      


  • Bruce Berkowitz Comments on Fannie Mae and Freddie Mac

    Odds favor Fannie Mae (FNMA) or Freddie Mac (FMCC) helped your parents and you obtain a first home, and that the same will be true for your children and grandchildren. Fannie Mae and Freddie Mac guarantee the timely payment of principal and interest demanded by lenders. Investors just like you own and fund their operations. Yet, we fight an expropriation of our principal by the government. Here’s where we stand: prosperity exists in a capitalist society only when contracts are honored. The rule of law must be respected and cannot be eliminated by fiat. If you disagree, just see the despair in Venezuela. We look forward to a decision from the United States Court of Appeals for the District of Columbia Circuit that protects and preserves our investments in Fannie Mae and Freddie Mac. Signs indicate that we are nearing the end of our “Alice in Washington” journey.



    Our three appellate court judges (Janice Brown, Doug Ginsburg, and Patricia Millett) published a separate decision (Heartland Plymouth Court MI, LLC v. National Labor Relations Board) that we believe is instructive to their eventual ruling in our case. Writing for the majority, Judge Brown stated:
      


  • Bruce Berkowitz's Full-Year Fairholme Fund Letter

    January 30, 2017


    To the Shareholders and Directors of Fairholme Fund (Trades, Portfolio)s, Inc.:

      


  • How to Diversify Without Selling Stocks You Already Own and Love

    Someone emailed me this question:


      


  • Ackman, Berkowitz May Not Get Their Fannie Mae Payout So Fast Under Trump

    Bill Ackman (Trades, Portfolio), who has sued to release Fannie Mae (FNMA) and Freddie Mac (FMCC) from government conservatorship, said this week he has increased confidence that the Trump administration would ensure and hasten the reform of the government-sponsored entities, a move that would further enrich him and a number of his hedge and mutual fund peers.


    Ackman has wagered roughly 9% of his hedge fund’s assets that the government would return the two entities, which it rescued from collapse in the 2008 mortgage crisis, to private ownership and end its confiscation of their profits. He, along with several other large stakeholders such as Bruce Berkowitz (Trades, Portfolio) of Fairholme Fund (Trades, Portfolio), have already made sizable gains on their bets, as the market hopes for an imminent and profitable decision on the lenders’ fate. Shares of Fannie Mae that traded for under 30 cents in 2013 have already surged 150% since the election.

      


  • Largest Insider Trades of the Week

    The GuruFocus All-in-One Screener can be used to find insider trades from the past week. Under the Insiders tab, change the settings for All Insider Buying to “$5,0000,000+” and the duration to “January 2016” and All Insider Sales to “$5,000,000+.”


    According to the above filters, the following are trades from company insiders this week.

      


  • Sears Sells Craftsman Brand to Stanley Black & Decker

    Sears Holdings Corp. (NASDAQ:SHLD) announced today it is selling its well-known Craftsman tool brand to Stanley Black & Decker (NYSE:SWK) and will be closing 150 stores.


    Stanley Black & Decker will pay Sears $525 million at the close of the deal. After three years, it will pay $250 million. After that, Sears will be paid 2.5% to 3.5% of Craftsman sales for the remainder of a 15-year period. The total payment is estimated to amount to $900 million.

      


  • The Danger on Which Gurus Agree

    Intrinsically ETFs are a tremendous innovation and a great positive. Unfortunately at this stage if you want to raise a lot of money as an asset manager you need to play into fear and greed. Customers want more, and they don’t want to lose. Ever.


    ETFs get investors more. They are much cheaper to run compared to an actively managed fund. With active managers, in the aggregate, failing to deliver returns in excess of their expenses ETFs win out. So far, so good.

      


  • 17 Questions With Tim Travis of T&T Capital Management

    1. How and why did you get started investing? What is your background?


    When I was a teenager my Dad gave me the book the "Intelligent Investor" for me to read on a trip to Hawaii. For the first time investing, which had previously seemed a very abstract concept to me, made tangible sense. I found it so interesting that the relatively simple concept of value investing, which has been used by so many successfully, was the furthest thing from the status quo on Wall Street. I have a naturally contrarian personality so value investing was a great fit for me.

      


  • Bruce Berkowitz's Fairholme Capital Management Conference Call Transcript

    EDITED FOR CLARITY AND ACCURACY

      


  • Guru and Insider Invests in Lands' End

    Edward Lampert (Trades, Portfolio), insider and 10% owner of Lands’ End (NASDAQ:LE), purchased 412,294 shares in eight separate transactions on eight separate days, according to the Securities and Exchange Commission.


      


  • How Can You Beat the Market?

    The investing world is full of tough competition. Better results require hard work. Sometimes even hard work is not enough.


    If you are looking for investment opportunities in the same places as everyone else, it’s difficult to get a competitive advantage.

      


  • Bruce Berkowitz Leans Toward Lands’ End

    Bruce Berkowitz (Trades, Portfolio) of Fairholme Capital Management increased his position in Lands’ End Inc. (NASDAQ:LE) by 11.8% on Sept. 30.


    Berkowitz founded Fairholme Capital Management in 1997. He manages a concentrated portfolio in companies that have great management, generate free cash flow and are undervalued. He also will invest in mediocre companies that are trading at a significant discount to their intrinsic values but also have potential catalysts.

      


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