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Year-to-date, Berkowitz’s Fairholme Fund returned 33.75% vs. S&P’s 22.46%. Since inception on 12/29/1999, the Fund returned an annual rate of 12.87% vs. S&P 500% returned -1.53%. The Warren Buffett inspired value investor clearly separates himself from the rest of the crowd.
Here are the stocks that Berkowitz bought the most in the past quarter:
No. 1: Berkshire Hathaway Inc. (BRK-A), Add: 1.71% of the portfolio - Total: 2,214 Shares
Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in a number of diverse business activities. The most important of these are insurance businesses conducted nationwide on a primary basis and worldwide on a reinsurance basis. Berkshire also owns and operates a number of other businesses engaged in a variety of activities, as identified herein. Berkshire Hathaway Inc shares were traded at around $103380 with a P/E ratio of 31.4 and P/S ratio of 1. Berkshire Hathaway Inc. had an annual average earning growth of 27.1% over the past 10 years. GuruFocus rated Berkshire Hathaway Inc. the business predictability rank of 3.5-star.
No. 2: Berkshire Hathaway Inc. (BRK-B), Add: 6.07% of the portfolio - Total: 173,129 Shares
Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in a number of diverse business activities. The most important of these is the property and casualty insurance business conducted nationwide on a direct basis and worldwide on a reinsurance basis through a number of subsidiaries collectively referred to as the Berkshire Hathaway Insurance Group. Berkshire Hathaway Inc. shares were traded at around $3440 with and P/S ratio of 0.5. Berkshire Hathaway Inc. had an annual average earning growth of 1.7% over the past 10 years.
No. 3: Humana Inc. (HUM), Add: 2.51% of the portfolio - Total: 14,962,600 Shares
Humana, Inc. is a health services company that facilitates the delivery of health care services through networks of providers to its medical members. The company's products are marketed primarily through health maintenance organizations and preferred provider organizations that encourage or require the use of contracted providers. The company also offers various specialty products to employers, including dental, group life and workers' compensation, and administrative services to those who self-insure their employee health plans. Humana Inc. has a market cap of $7.04 billion; its shares were traded at around $41.48 with a P/E ratio of 7.2 and P/S ratio of 0.2. Humana Inc. had an annual average earning growth of 18.7% over the past 10 years. GuruFocus rated Humana Inc. the business predictability rank of 2-star.
No. 4: Sears Holdings Corp. (SHLD), Add: 1.38% of the portfolio - Total: 15,277,039 Shares
Sears Holdings Corporation, the parent of Kmart and Sears, Roebuck and Co., is the leading home appliance retailer in North America and is a retail sales leader in tools, lawn and garden, home electronics, and automotive repair and maintenance. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. Sears Holdings Corp. has a market cap of $8.51 billion; its shares were traded at around $71.66 with a P/E ratio of 26.6 and P/S ratio of 0.2. Sears Holdings Corp. had an annual average earning growth of 45% over the past 5 years.
No. 5: Spirit AeroSystems Holdings Inc. (SPR), Add: 0.97% of the portfolio - Total: 26,502,871 Shares
SPIRIT AEROSYSTEMS is the world's largest independent supplier of commercial airplane assemblies and components. In the U.S., Spirit's core products include fuselages, pylons, nacelles and wing components. Additionally, Spirit provides aftermarket customer support services, including spare parts, maintenance/repair/overhaul, and fleet support services in North America and Europe. Spirit Europe produces wing components for a host of customers, including Airbus. Spirit Aerosystems Holdings Inc. has a market cap of $2.53 billion; its shares were traded at around $18.23 with a P/E ratio of 10 and P/S ratio of 0.7.
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User Comments:
1. Augustabound says on Nov 24, 2009 at 9:55 AM:
Maybe some of the more experienced here can help me with this. I'm a Berkowitz follower and most know he's a free cash flow investor. Spirit has been free cash deficient since it was spun off, and TTM numbers have their operating cash flow negative for the first time since 2005.
Every conference call transcript and interview I read of B.B. he praises cash flow and usually speaks of free cash flow yield.
Here's a $2.5 B company that has $366 M negative cash flow TTM.
So what am I missing with Spirit, or with Berkowitz's strategy?
Every conference call transcript and interview I read of B.B. he praises cash flow and usually speaks of free cash flow yield.
Here's a $2.5 B company that has $366 M negative cash flow TTM.
So what am I missing with Spirit, or with Berkowitz's strategy?
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2. Jetjam says on Nov 24, 2009 at 10:59 AM:
I think Berkowitz is open to somewhat "creative" forms of cash flow. I remember him commenting on JOE, suggesting that the airport and infrastructure being created by the govt could be thought of as cash flow. Perhaps Spirit is a similar situation, where it may not be cash flow in the accounting sense, but where the backlog and the nature of their business creates something just as attractive to him.
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3. Augustabound says on Nov 24, 2009 at 11:22 AM:
Good point, I forgot about JOE.
I also remember him and others commenting on the value of their land in Florida being somewhat hidden in the sense of the low values carried on the financial statements.
I just see Spirit as too high cap ex to create excess cash that would create B.B. 10% cash flow yield that he likes to see.
I also remember him and others commenting on the value of their land in Florida being somewhat hidden in the sense of the low values carried on the financial statements.
I just see Spirit as too high cap ex to create excess cash that would create B.B. 10% cash flow yield that he likes to see.
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4. Rnagarajan says on Nov 24, 2009 at 3:19 PM:
I've looked into St. Joe. It's one of those situations where I need to see the assets (land) to be convinced. I may be visiting the panhandle in December to see for myself given how enthusiastic Berkowitz is about the company and the potential catalyst of the new airport opening mid next year.
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