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Fairholme Fund Buys Jefferies, Bank of America; Sells Others

10qk

gurufocus

370 followers
The long awaited Q3 portfolio of Fairholme Fund is out. Apparently Bruce Berkowitz was under pressure for redemptions. He has sold most of his non-core positions. He sold financials like Goldman Sachs (GS) and Morgan Stanley (MS). But he did buy into a new position – again financial – Jefferies (JEF). These are some observations:

1. As of Aug. 31, Fairholme has about $10.9 billion under management. Due to the market decline in September, and probably further redemptions, the fund shrank to $8.9 billion in September.

2. Bought into Jefferies. This is the top holding of Leucadia. Bruce Berkowitz had learned ideas from Leucadia before. This is probably one of those ideas again.

3. Added to Bank of America (BAC).

4. Invest heavily into Chinese insurance companies Including China Pacific Insurance and AIA Group. The two makes up of 15% of the fund.

5. As of 08/31/2011, Fairholme Fund owns 22 positions with a total value of $10 billion.

These are the details of the buys and sells.

This is the portfolio chart of Fairholme Fund. You can click on the legend of the chart to show/hide buys, sells, or holdings. Each ball on the chart represents a position in the portfolio. You can move your mouse on the balls to see the details of each position and click to see the details of all guru trades with this position.



For the details of Fairholme Fund's stock buys and sells, go to http://www.gurufocus.com/StockBuy.php?GuruName=Fairholme+Fund

This is the sector weightings of his portfolio:

Financials 78.8%
Not Assigned 20.8%
Industrials 0.4%


These are the top 5 holdings of Fairholme Fund

  1. American International Group Inc. (AIG) - 93,753,739 shares, 21.4% of the total portfolio. Shares reduced by 1.14%
  2. AIA Group Limited (AAIGF.PK) - 302,221,000 shares, 10.6% of the total portfolio.
  3. Sears Holdings Corp. (SHLD) - 14,481,473 shares, 8.6% of the total portfolio. Shares reduced by 0.09%
  4. Brookfield Asset Management (BAM) - 24,943,800 shares, 7.4% of the total portfolio. Shares reduced by 9.3%
  5. Bank Of America Corp. (BAC) - 81,907,015 shares, 6.7% of the total portfolio. Shares added by 5.94%


Added: Bank Of America Corp. (BAC)

Fairholme Fund added to his holdings in Bank Of America Corp. by 5.94%. His purchase prices were between $6.3 and $11.29, with an estimated average price of $9.68. The impact to his portfolio due to this purchase was 0.37%. His holdings were 81,907,015 shares as of 08/31/2011.

Bank of America Corp. is one of the world's financial services companies. Bank Of America Corp. has a market cap of $73.16 billion; its shares were traded at around $7.22 with and P/S ratio of 0.5. The dividend yield of Bank Of America Corp. stocks is 0.5%.

New Purchase: Jefferies Group Inc. (JEF)

Fairholme Fund initiated holdings in Jefferies Group Inc.. His purchase prices were between $14.5 and $21.44, with an estimated average price of $19.34. The impact to his portfolio due to this purchase was 0.58%. His holdings were 3,560,311 shares as of 08/31/2011.

Jefferies Group, Inc. is a holding company whose affiliated companies, including its principal operating subsidiary, Jefferies & Company, Inc. Jefferies Group Inc. has a market cap of $3.01 billion; its shares were traded at around $14.9 with and P/S ratio of 1.2. The dividend yield of Jefferies Group Inc. stocks is 2%.

Reduced: Regions Financial Corp. (RF)

Fairholme Fund reduced to his holdings in Regions Financial Corp. by 29.03%. His sale prices were between $3.86 and $6.54, with an estimated average price of $5.67. The impact to his portfolio due to this sale was -1.63%. Fairholme Fund still held 82,213,004 shares as of 08/31/2011.

Regions Financial Corporation is a regional bank holding company and hasbanking-related subsidiaries engaged in mortgage banking, credit life insurance, leasing, and securities brokerage activities with offices in various Southeastern states. Regions Financial Corp. has a market cap of $5.34 billion; its shares were traded at around $4.24 with and P/S ratio of 0.7. The dividend yield of Regions Financial Corp. stocks is 0.9%.

Reduced: Berkshire Hathaway B (BRK.B)

Fairholme Fund reduced to his holdings in Berkshire Hathaway B by 31.85%. His sale prices were between $66.65 and $78.09, with an estimated average price of $74.42. The impact to his portfolio due to this sale was -1.47%. Fairholme Fund still held 5,797,950 shares as of 08/31/2011.

Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in a number of diverse business activities. Berkshire Hathaway B has a market cap of $199.37 billion; its shares were traded at around $80.49 with a P/E ratio of 14.1 and P/S ratio of 1.4. Berkshire Hathaway B had an annual average earnings growth of 18.2% over the past 10 years.

Reduced: Brookfield Asset Management (BAM)

Fairholme Fund reduced to his holdings in Brookfield Asset Management by 9.3%. His sale prices were between $26.87 and $33.56, with an estimated average price of $31.38. The impact to his portfolio due to this sale was -0.58%. Fairholme Fund still held 24,943,800 shares as of 08/31/2011.

Brookfield Asset Management Inc. is an asset manager. Brookfield Asset Management has a market cap of $18.35 billion; its shares were traded at around $29.53 with a P/E ratio of 14.1 and P/S ratio of 1.4. The dividend yield of Brookfield Asset Management stocks is 1.7%. Brookfield Asset Management had an annual average earnings growth of 27% over the past 10 years.

Reduced: CIT Group Inc. (CIT)

Fairholme Fund reduced to his holdings in Cit Group Inc. by 2.38%. His sale prices were between $30.55 and $44.74, with an estimated average price of $39.65. The impact to his portfolio due to this sale was -0.13%. Fairholme Fund still held 16,889,729 shares as of 08/31/2011.

CIT Group Inc. is a bank holding company that provides financing and leasing capital for commercial companies throughout the world. Cit Group Inc. has a market cap of $7.34 billion; its shares were traded at around $36.6 with a P/E ratio of 32.7 and P/S ratio of 1.1.

Reduced: Winthrop Realty Trust (FUR)

Fairholme Fund reduced to his holdings in Winthrop Realty Trust by 30.43%. His sale prices were between $8.54 and $12.16, with an estimated average price of $11.11. The impact to his portfolio due to this sale was -0.04%. Fairholme Fund still held 1,140,948 shares as of 08/31/2011.

Winthrop Realty Trust is a Boston-based real estate investment trust. Winthrop Realty Trust has a market cap of $306.9 million; its shares were traded at around $9.31 with a P/E ratio of 6.7 and P/S ratio of 5.5. The dividend yield of Winthrop Realty Trust stocks is 6.9%. Winthrop Realty Trust had an annual average earnings growth of 19% over the past 10 years.

Sold Out: The Goldman Sachs Group Inc. (GS)

Fairholme Fund sold out his holdings in The Goldman Sachs Group Inc.. His sale prices were between $106.86 and $137.6, with an estimated average price of $128.99.

The Goldman Sachs Group Inc. has a market cap of $58.87 billion; its shares were traded at around $116.4 with a P/E ratio of 18.3 and P/S ratio of 1.4. The dividend yield of The Goldman Sachs Group Inc. stocks is 1.2%. The Goldman Sachs Group Inc. had an annual average earnings growth of 9.8% over the past 10 years.

Sold Out: Morgan Stanley (MS)

Fairholme Fund sold out his holdings in Morgan Stanley. His sale prices were between $15.76 and $24.2, with an estimated average price of $21.08.

Morgan Stanley has a market cap of $37.42 billion; its shares were traded at around $19.41 with a P/E ratio of 11.8 and P/S ratio of 1.2. The dividend yield of Morgan Stanley stocks is 1%. Morgan Stanley had an annual average earnings growth of 2.1% over the past 10 years.

Sold Out: Cisco Systems Inc. (CSCO)

Fairholme Fund sold out his holdings in Cisco Systems Inc.. His sale prices were between $13.73 and $16.46, with an estimated average price of $15.48.

Cisco Systems Inc. has a market cap of $99.26 billion; its shares were traded at around $18.44 with a P/E ratio of 13.2 and P/S ratio of 2.3. The dividend yield of Cisco Systems Inc. stocks is 1.3%. Cisco Systems Inc. had an annual average earnings growth of 11.8% over the past 10 years. GuruFocus rated Cisco Systems Inc. the business predictability rank of 2.5-star.

Sold Out: Spirit Aerosystems Holdings Inc. Cl A (SPR)

Fairholme Fund sold out his holdings in Spirit Aerosystems Holdings Inc. Cl A. His sale prices were between $14.4 and $22.38, with an estimated average price of $19.75.

SPIRIT AEROSYSTEMS is the world's largest independent supplier of commercial airplane assemblies and components. Spirit Aerosystems Holdings Inc. Cl A has a market cap of $2.51 billion; its shares were traded at around $17.63 with a P/E ratio of 12.3 and P/S ratio of 0.6.

About the author:

gurufocus
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 3.9/5 (21 votes)

Comments

cash9flow
Cash9flow - 3 years ago


Bruce loves the financials and insurers
paulwitt
Paulwitt - 3 years ago
Maybe he's insuring the financials and financing the insurers....

Let us know.....pleeeease :)

fareastwarriors
Fareastwarriors - 3 years ago
All or nothing!
JeanPierreSarti
JeanPierreSarti - 3 years ago
It is one thing to "Ingore the Crowd" when you are making incredible value plays, but what he is doing is an insane macro bet in my humble opinion. I have greatly valued his opinions in the past and I wish him well but not with my money in FAIRX.
superguru
Superguru - 3 years ago
Jefferies took a hit today due to MF global. Bruce must be going crazy accumulating it now at these prices.

Any one looking at JEF now?

paulwitt
Paulwitt - 3 years ago




Press Release Source: Jefferies Group, Inc. On Monday October 31, 2011, 11:13 am EDT



NEW YORK & LONDON--(BUSINESS WIRE)-- Jefferies confirmed today that its exposure to MF Global Holdings Ltd. debt securities, which resulted from facilitating client orders as part of normal-course market making, is less than $9 million in marked-to-market positions

The above paragraph was copied from yahoo.com PW


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