Fairholme Fund (Trades, Portfolio), part of Miami-based Fairholme Fund (Trades, Portfolio)s, disclosed in a regulatory portfolio filing that its top trades during the first quarter included a boost to its Enterprise Products Partners LP (EPD, Financial) holding and the closure of its holdings in Energy Transfer LP (ET, Financial) and Kinder Morgan Inc. (KMI, Financial).
Managed by Bruce Berkowitz (Trades, Portfolio), the fund concentrates its investments in a relatively small number of holdings, focusing on companies with strong management and cash flow.
As of Feb. 28, the $1.31 billion N-PORT P equity portfolio contains seven stocks with a turnover of 1%. Investors should be aware that, just like 13F reports, NPORT-P reports do not provide a complete picture of a guru’s holdings to the public. Filed by certain mutual funds after each quarter’s end, N-PORT P filings collect a wide variety of information on the fund for the SEC’s reference, but in general, the only information made public is in regard to long equity positions. Unlike 13Fs, they do require some disclosure for long equity positions in foreign stocks. Despite their limitations, even these limited filings can provide valuable information.
Enterprise Products Partners
The fund purchased 419,100 shares of Enterprise Products Partners (EPD, Financial), boosting the position by 28.73% and its equity portfolio by 0.78%.
Shares of Enterprise Products Partners averaged $22.85 during the first quarter; the stock is modestly undervalued based on Thursday’s price-to-GF Value ratio of 0.81.
The Houston-based energy company has a GF Score of 86 out of 100, driven by a rank of 10 out of 10 for GF Value and momentum and ranks between 7 and 8 for profitability and growth despite financial strength ranking just 4 out of 10.
Enterprise Products Partners has a profitability rank of 8 on several positive investing signs, which include a high Piotroski F-score of 8 and profit margins and returns that are outperforming more than 69% of global competitors.
Other gurus with holdings in Enterprise Products Partners include First Eagle Investment (Trades, Portfolio) and David Tepper (Trades, Portfolio)’s Appaloosa LP.
Energy Transfer
The fund sold all 663,500 shares of Energy Transfer (ET, Financial), trimming 0.47% of its equity portfolio.
Shares of Energy Transfer averaged $9.16 during the first quarter; the stock is modestly overvalued based on Thursday’s price-to-GF Value ratio of 1.11.
The Dallas-based energy company has a GF Score of 75 out of 100: Although the company has a momentum rank of 9 and a profitability rank of 7, Energy Transfer ranked just between 4 and 5 out of 10 for financial strength, GF Value and growth.
Energy Transfer has a financial strength rank of 4 out of 10 based on several warning signs, which include a low Altman Z-score of 1.23 and debt ratios underperforming more than 66% of global competitors.
Kinder Morgan
The fund sold all 319,000 shares of Kinder Morgan (KMI, Financial), trimming 0.42% of its equity portfolio.
Shares of Kinder Morgan averaged $16.68 during the first quarter; the stock is fairly valued based on Thursday’s price-to-GF Value ratio of 0.91.
The Houston-based midstream energy company has a GF Score of 80 out of 100 based on a momentum rank of 10 out of 10, a GF Value rank of 9 out of 10, a profitability rank of 7 out of 10, a growth rank of 5 out of 10 and a financial strength rank of 4 out of 10.
