Bruce Berkowitz's Fairholme Buys 7 New Stocks

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Sep 08, 2014
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Bruce Berkowitz (Trades, Portfolio) led returns among gurus in the first quarter of the year with outsized holdings of enormous national home mortgage entities that almost fell during the financial crisis, Fannie Mae (FNMA, Financial) and Freddie Mac (EMCC, Financial).

Berkowitz reiterated his faith in the investments in his second quarter letter, calling them maybe “the most important financial institutions in the United States – perhaps the world.”

“They are a major reason why our country did not enter a second Great Depression, and are proving to be the most successful taxpayer investments of the Great Recession,” he wrote.

His only comment in the letter not related to specific stocks was, “Patience will pay.”

Berkowitz had a change of pace in his second quarter portfolio, with seven new stock buys. The portfolio contains 55 stocks in total, and is valued at $9.9 billion.

Top New Stock Buys

Diamond Offshore Drilling Inc. (DO, Financial)

Berkowitz purchased 49,000 shares of his largest new holding, Diamond Offshore Drilling Inc., equating to 0.024% of the portfolio. The average second quarter price of the sock was $50 per share.

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Diamond Offshore Drilling Inc. was incorporated in Delaware in 1989. Diamond Offshore Drilling Inc. has a market cap of $5.67 billion; its shares were traded at around $41.32 with a P/E ratio of 13.60 and P/S ratio of 2.0. The dividend yield of Diamond Offshore Drilling Inc. stocks is 1.20%. Diamond Offshore Drilling Inc. had an annual average earnings growth of 15.10% over the past 10 years.

Oaktree Capital Group LLC (OAK, Financial)

Berkowitz purchased 48,000 shares of Oaktree Capital Group, making it 0.024% of the portfolio. The stock price averaged $52 per share for the quarter.

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Oaktree Capital Group LLC is an investment management company focused on alternative markets. Oaktree Capital Group LLC has a market cap of $7.81 billion; its shares were traded at around $51.06 with a P/E ratio of 10.70 and P/S ratio of 10.70. The dividend yield of Oaktree Capital Group LLC stocks is 6.30%.

Mercury General Corp (MCY, Financial)

Berkowitz purchased 53,600 shares of Mercury General Corp, for 0.025% of the portfolio. The stock’s price averaged $47 per share for the quarter.

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Mercury General Corporation is a California Corporation. Mercury General Corp has a market cap of $2.8 billion; its shares were traded at around $50.94 with a P/E ratio of 12.60 and P/S ratio of 0.90. The dividend yield of Mercury General Corp stocks is 4.80%.

KKR & Co. LP (KKR, Financial)

Berkowitz purchased 101,500 shares of KKR & Co., for 0.025% of the portfolio. The stock’s price averaged $23 for the quarter.

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KKR & Co. LP was founded in 1976. The company's business offers a broad range of asset management services to its investors and provides capital markets services to its firm, its portfolio companies and its clients. KKR & Co LP has a market cap of $17.92 billion; its shares were traded at around $22.36 with a P/E ratio of 8.60 and P/S ratio of 7.60. The dividend yield of KKR & Co. LP stocks is 8.0%.

Altria Group Inc. (MO, Financial)

Berkowitz purchased 62,000 shares of Altria Group Inc. in the second quarter, making it 0.026% of his portfolio. The stock’s price averaged $40 per share.

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Altria Group Inc. is a holding company incorporated in the Commonwealth of Virginia in 1985. Altria Group Inc. has a market cap of $86.2 billion; its shares were traded at around $43.46 with a P/E ratio of 19.90 and P/S ratio of 4.90. The dividend yield of Altria Group Inc. stocks is 4.40%. Altria Group Inc. had an annual average earnings growth of 7.30% over the past five years.

Transocean Ltd. (RIG, Financial)

Berkowitz purchased 56,500 shares of Transocean, making it 0.026% of the portfolio. The stock’s price averaged $43 for the quarter.

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Transocean Ltd. is incorporated in Switzerland. The company is an international provider of offshore contract drilling services for oil and gas wells. Transocean Ltd. has a market cap of $13.48 billion; its shares were traded at around $37.21 with a P/E ratio of 7.80 and P/S ratio of 1.46. The dividend yield of Transocean Ltd. stocks is 7.0%.

Reynolds American Inc. (RAI, Financial)

Berkowitz purchased 44,300 shares of Reynolds American Inc., making it 0.027% of the portfolio. The stock’s price averaged $57 for the quarter.

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Reynolds American Inc. was incorporated in the state of North Carolina on Jan. 5, 2004. Reynolds American Inc. has a market cap of $30.56 billion; its shares were traded at around $57.53 with a P/E ratio of 19.50 and P/S ratio of 3.80. The dividend yield of Reynolds American Inc. stocks is 4.50%. Reynolds American Inc. had an annual average earnings growth of 6.60% over the past 10 years.

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