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Berkowitz Doubled Down on Stocks: AmeriCredit, Forest Laboratories, Hertz Global, Humana, RSC Holdings, Sears, St. Joe Company, United Rentals, WellCare, Winthrop Realty

guruek

guruek

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GuruFocus has been digging into Bruce Berkowitz’s 2009 Annual Report to Fairholme Fund’s shareholdersand found the exact costs that Bruce Berkowitz paid for some of his stock.

As a mutual fund, Fairholme only need to report to its shareholders twice a year the exact holdings (number of shares and value at the end of the period) in the fund. It needs to report the exact portfolio (again, number of shares and value at the end of the period) to SEC each quarter. Either way, mutual fund managers do not need to tell the shareholder or SEC or anybody else how much exactly they paid for the stocks in the portfolio.

Situation changes completely when the fund owns more than 5% percent of the shares outstanding of a stock. At the threshold of 5%, a stock became that of an affiliated company, per Investment Company of 1940. Mutual fund needs to disclose the securities held (equity and debt) and the COSTs of the affiliated companies.

Now that success has fed Berkowitz with more than $12 billion of asset under management, and he tends to concentrate on a few good ideas rather than diversifying among many mediocre stocks, he routinely owns more than 5% of a stocks.

Among them, all the domestically traded stocks are listed in this table:

As of 11/30/20082009 Gross Additions
SymbolCompanyPriceSharesCostPriceSharesCostPrice
1ACFAmeriCredit Corp.$23.38 16,692,000 $199,228,670 $11.94 15,122,670 $86,437,475 $5.72
2FRXForest Laboratories$32.07 16,556,100 $546,918,488 $33.03 100,000 $2,127,110 $21.27
3HTZHertz Global Holdings, Inc.$9.78 18,630,100 $127,456,844 $6.84 30,863,400 $182,452,500 $5.91
4HUMHumana, Inc.$49.02 7,563,500 $249,984,758 $33.05 7,557,900 $253,283,113 $33.51
5RRRRSC Holdings$7.89 7,598,800 $52,914,631 $6.96
6SHLDSears Holdings Corp.$108.85 11,239,671 $1,056,090,389 $93.96 2,979,300 $151,359,650 $50.80
7JOEThe St. Joe Co.$31.28 9,654,700 $310,621,238 $32.17 13,829,302 $304,577,663 $22.02
8URIUnited Rentals, Inc.$8.39 8,291,818 $144,230,328 $17.39
9WCGWellcare Health Plans, Inc.$31.23 4,145,200 $146,541,372 $35.35 73,000 $965,183 $13.22
10FURWinthrop Realty Trust$12.96 2,988,648 $27,048,650 $9.05


Observations:

1. Berkowitz was able to take advantage of the low prices offered by the market’s dramatic decline. The current prices for most the stocks on the list are higher than much higher than the 2009 acquisition price. His double-down strategy worked handsomely.

2. Several stocks still sell at prices paid by Berkowitz paid prior to 2008 year end: FRX, JOE, URI, WCG. With the markets at 18 months high, these stock may warrants a deeper look. Two of the stocks are in Health Care sector (FRX and WCG).

Holding History:

GuruFocus has holding history data for these stocks:

AmeriCredit Corp. (ACF)

AmeriCredit Corp. is a independent automobile finance company that provides financing solutions indirectly through auto dealers and directly to consumers in the United States and Canada. Americredit Corp. has a market cap of $3.13 billion; its shares were traded at around $23.38 with a P/E ratio of 28.2 and P/S ratio of 1.5.

Berkowitz’s holding history with ACF:

QuarterEnd Date Value ($1000) Shares QuarterEnd Price
20091231 673,047 35,349,099 $ 19.04
20090930 510,133 32,307,322 $ 15.79
20090630 437,764 32,307,322 $ 13.55
20090331 189,321 32,307,322 $ 5.86
20081231 246,828 32,307,322 $ 7.64
20080930 213,228 21,049,200 $ 10.13
20080630 129,262 14,995,600 $ 8.62
20080331 130,662 12,975,400 $ 10.07

Rating: 4.0/5 (23 votes)

Comments

Buffetteer
Buffetteer - 4 years ago
See the Other 2 related articles:

Bruce Berkowitz's HIGH YIELD Stocks & HIGH GROWTH Stocks

canopy2829
Canopy2829 - 4 years ago


Oustanding information, my rating is 5 all the way.

Please leave your comment:


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