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Bruce Berkowitz Buys Mercury General, Sears, Jefferies and Wells Fargo Warrants

Facing redemption pressure, it has been a while since Bruce Berkowitz bought his last new position. But in the quarter ended on March 31, he initiated a new position in insurance company Mercury General (NYSE:MCY). He also added to his positions in Sears (NASDAQ:SHLD), Jeffries (JEF) and Wells Fargo Warrants. He reduced Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B), Citigroup (NYSE:C) and Goodman Sachs (NYSE:GS).

Of course Bruce Berkowitz still has more than 80% of his portfolio in financials. His largest holding is AIG (NYSE:AIG), which is 36% of all his stocks. Will AIG make or break Bruce Berkowitz? We will wait to see.

Bruce Berkowitz initiated holdings in Mercury General Corp. His purchase prices were between $42.88 and $45.63, with an estimated average price of $41.32. The impact to his portfolio due to this purchase was 0.04%. His holdings were 70,900 shares as of March 31, 2012. Mercury General Corp. is engaged primarily in writing all risk classifications of automobile insurance in a number of states, principally California. He owned this stock before in Fairholme Focused Income Fund, but sold later. The stock now has a dividend yield of 5.4%.

Mercury released its first quarter results recently. Its net premiums written is almost flat from the same period last year, but its combined ratio declined to 97.6% from 98.2% in 2011, an important increase of 60 basis points.

Due to the improvement in the combined ratio, Mercury had net income of $73.4 million in the first quarter, compared to $58.2 million for the same period a year ago. The company declared a quarterly dividend of $0.61 per share.

Bruce Berkowitz continues to add to Sears, as the stock price declined. He now owns 156 million shares of Sears. He also added to Jefferies (JEF), which he has a lot of confidence in due to the investment of Leucadia (NYSE:LUK).

He reduced his positions in St. Joe. (NYSE:JOE), and sold out Goldman Sachs (NYSE:GS).

Here is the complete portfolio of Bruce Berkowitz. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Bruce Berkowitz.

Rating: 3.8/5 (13 votes)


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