Popular value investor and guru Bruce Berkowitz (Trades, Portfolio) had a relatively busy quarter, adding three new stocks to his Fairholme Capital Management. The guru founded his Fairholme fund in 1997, and in 2009 he was named the Domestic-Stock Fund Manager of the Year and Domestic-Stock Fund Manager of the Decade by Morningstar. Berkowitz has had numerous successes over the past few years as well as his fair share of misses, and this past quarter was exemplified his expertise once again.
As of the close of the third quarter Berkowitz held on to 24 stocks valued at over $7.2 billion. The guru added three new positions to his holdings: NYCB, BP and CHK – demonstrating a busy quarter for the relatively quiet guru. The following three stocks are his three largest holdings and where Berkowitz holds nearly 77% of his total assets managed.
American International Group (AIG)
Berkowitz’s largest holding is in the banking and insurance company American International Group (or AIG). The guru holds on to a sizeable 60,311,704 shares of the company’s stock. This holding makes up for nearly half of his total portfolio, taking up 44.9%, as well as 4.23% of the company’s shares outstanding.
Over the duration of the third quarter Berkowitz cut his holdings in AIG -13.61% by selling 9,498,610 shares of the company’s stock. He sold these shares in the quarterly price range of $52.05 to $56.33, with an estimated average quarterly price of $54.69 per share. Since then the price per share has decreased approximately -1%.
Check out Berkowitz’s historical holdings of AIG:
AIG is a holding company which, through its subsidiaries, is engaged in insurance and insurance-related activities in the United States and abroad. It provides property casualty insurance, life insurance, retirement products, mortgage insurance and other financial services.
AIG’s historical revenue and net income:
The analysis on AIG reports that the company reports that the revenue per share has been in decline over the past five years, its dividend yield is near a 5-year high and its price is also near a 5-year high.
AIG is a favorite amongst gurus with 41 gurus holding a position in the company. Check out AIG’s historical holdings here.
The Peter Lynch Chart suggests that the company is currently undervalued:
American International Group has a market cap of $75.62 billion. Its shares are currently trading at around $54.02 per share with a P/E ratio of 8.90 and a P/S ratio of 1.20. The dividend yield is at 0.90%.
Bank of America (BAC)
The guru’s second largest holding is in Bank of America where he holds on to 97,710,665 shares of the company’s stock. This holding makes up for 22.9% of the guru’s total assets managed and 0.93% of the company’s shares outstanding.
Over the past quarter Berkowitz reduced his holdings in Bank of America -0.73% selling 721,550 shares of the company’s stock. The guru sold these shares in the quarterly price range of $14.98 to $17.18, with an estimated average quarterly price of $15.92. Since then the price per share is trading up about 7.9%.
Check out his historical holding history of BAC:
Bank of America, through its banking and various non-banking subsidiaries, provides a diversified range of banking and non-banking financial services and products through five business segments namely Consumer and Business Banking, Consumer Real Estate Services, Global Wealth and Investment Management, Global Banking and Global Markets.
Bank of America’s historical revenue and net income:
The analysis on Bank of America reports that the company’s revenue per share has been in decline over the past five years, its dividend yield is near a 2-year high and its price is sitting near a 5-year high.
Bank of America is another guru favorite with 40 different gurus holding a position in the company. Check out all of the gurus’ historical holdings here.
The Peter Lynch Chart suggests that the company is currently overvalued:
Bank of America has a market cap of $179.94 billion. Its shares are currently trading at around $17.11 with a P/E ratio of 45.10 and a P/S ratio of 2.10. The company had an annual average earnings growth of 16.50% over the past five years.
Sears Holdings Corp (SHLD)
The guru’s third largest holding goes to Sears Holdings Corp where he maintains 25,506,273 shares of the company’s stock. This position makes up for a much smaller 8.9% of Berkowitz total portfolio as well as 23.96% of the company’s shares outstanding.
Over the past quarter Berkowitz and his team upped their stake in Sears 3.38% by purchasing a total of 833,450 shares of the company’s stock. He bought these shares near the estimated average quarterly price of $33.01 per share, and since then the price per share is trading up approximately 10%.
Check out Berkowitz’s historical holding history here:
The Company is an integrated retailer with full-line and specialty retail stores in the United States, operating through Kmart and Sears. The company has three reportable segments namely Kmart, Sears Domestic and Sears Canada.
Sears Holdings’ historical revenue and net income:
The analysis on Sears Holdings Corp reports that the company’s Piotroski F-Score is low, its revenue per share has been in decline over the past five years and the company has a poor buyback track record.
Bruce Berkowitz (Trades, Portfolio) seems to be one of the few that still holds faith in Sears as he is one of five maintaining a position in the company. Check out the others gurus’ holding histories here.
Sears Holdings has a market cap of $4.34 billion. Its shares are trading at around $38.37 with a P/S ratio of 0.10 and a P/B ratio of 8.02.
Check out Bruce Berkowitz (Trades, Portfolio)’s complete third quarter portfolio here.
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