Prem Watsa (Trades, Portfolio), leader of Fairfax Financial Holdings Ltd. (TSX:FFH, Financial), disclosed in a regulatory filing that his firm's top five trades for the second quarter included new positions in Bank of America Corp. (BAC, Financial), Occidental Petroleum Corp. (OXY, Financial) and Intel Corp. (INTC, Financial). The firm also boosted its holdings of Chevron Corp. (CVX, Financial) and Alibaba Group Holding Ltd. (BABA, Financial).
In 1985, Watsa met Francis Chou (Trades, Portfolio), who told him how Warren Buffett (Trades, Portfolio) made his money using Berkshire Hathaway Inc.’s (BRK.A, Financial)(BRK.B, Financial) insurance float. The Fairfax leader applies a conservative value investing philosophy that is based off of Berkshire’s investing approach.
As of June, Fairfax’s $2.84 billion 13F equity portfolio contains 70 stocks, with seven new holdings and a quarterly turnover ratio of 17%. The top four sectors in terms of weight are financial services, basic materials, technology and real estate, representing 52.81%, 13.79%, 11.45% and 9.02% of the equity portfolio.
Investors should be aware13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Bank of America
Fairfax purchased 2,569,229 shares of Bank of America (BAC, Financial), giving the position 2.82% equity portfolio weight. Shares averaged $36.09 during the second quarter; the stock is fairly valued based on Monday’s price-to-GF Value ratio of 0.93.
The Charlotte, North Carolina-based bank has a GF Score of 72 out of 100 based on a rank of 7 out of 10 for GF Value and momentum, a profitability rank of 5 out of 10 and a rank of 4 out of 10 for growth and financial strength.
Berkshire owns approximately 1.01 billion shares of Bank of America as of the first-quarter 13F equity portfolio filing.
Other gurus with holdings in Bank of America include Dodge & Cox and PRIMECAP Management (Trades, Portfolio).
Occidental
Fairfax invested in 886,500 shares of Occidental (OXY, Financial), giving the position 1.84% weight in the equity portfolio. Shares averaged $61.35 during the second quarter; the stock is modestly overvalued based on Monday’s price-to-GF Value ratio of 1.27.
The Houston-based energy company has a GF Score of 74 out of 100 based on a profitability rank of 7 out of 10, a momentum rank of 6 out of 10, a GF Value rank of 3 out of 10 and a rank of 5 out of 10 for financial strength and growth.
Berkshire owns more than 181 million shares of Occidental as of July 16 according to GuruFocus Real-Time Picks, a Premium feature based on 13D and 13G filings.
Intel
The firm invested in 622,500 shares of Intel (INTC, Financial), giving the position 0.82% equity portfolio weight.
Shares of Intel averaged $43.36 during the second quarter; the stock is undervalued based on Monday’s price-to-GF Value ratio of 0.71.
The Santa Clara, California-based semiconductor company has a GF Score of 85 out of 100 based on a profitability rank of 9 out of 10, a rank of 8 out of 10 for growth and GF Value, a financial strength rank of 7 out of 10 and a momentum rank of 2 out of 10.
Chevron
The firm added 158,200 shares of Chevron (CVX, Financial), boosting the position by 101.54% and its equity portfolio by 0.81%.
Shares of Chevron averaged $165.26 during the second quarter; the stock is modestly undervalued based on Monday’s price-to-GF Value ratio of 0.90.
The San Ramon, California-based energy company has a GF Score of 81 out of 100 based on a financial strength rank of 8 out of 10, a rank of 7 out of 10 for profitability and GF Value, a momentum rank of 6 out of 10 and a growth rank of 5 out of 10.
Other gurus with holdings in Chevron include Buffett’s Berkshire and Ken Fisher (Trades, Portfolio)’s Fisher Investments.
Alibaba
Fairfax added 149,000 shares of Alibaba (BABA, Financial), boosting the position by 103.62% and its equity portfolio by 0.60%.
Shares of Alibaba averaged $98.24 during the second quarter; the stock is significantly undervalued based on Monday’s price-to-GF Value ratio of 0.27.
The Chinese e-commerce giant has a GF Score of 78 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 9 out of 10, a financial strength rank of 7 out of 10, a GF Value rank of 2 out of 10 and a momentum rank of 1 out of 10.
Other gurus with holdings in Alibaba include David Herro (Trades, Portfolio) and PRIMECAP Management (Trades, Portfolio).
