"Tracking Bruce Berkowitz’s Fairholme Portfolio – Q3 2019 Update"
"Bruce Berkowitz’s 13F stock portfolio value increased marginally this quarter from $467M to $475M.Fairholme added Kraft Heinz while reducing Vista Outdoor during the quarter.The 13F portfolio has 97% invested in St. Joe Companies.This article is part of a series that provides an ongoing analysis of the changes made to Fairholme’s 13F stock portfolio on a quarterly basis. It is based on Fairholme’s regulatory  filed on 11/14/2019. Please visit our  article for an idea on how his holdings have progressed over the years and our  for the fund’s moves during Q2 2019.Berkowitz’s 13F stock portfolio value increased marginally from $467M to $475M this quarter. The 13F portfolio currently has 97% invested in St. Joe Companies.Berkowitz’s flagship Fairholme Fund (FAIRX) has generated significant alpha since its December 1999 inception: thru June 2019, the fund returned at an annualized rate of 9.08% compared to 5.67% for S&P 500 index. FAIRX has however underperformed over the most recent 10-year period. Of the $1.1B AUM, Cash and Equivalents are at ~32%, St. Joe stock at ~34%, Fannie/Freddie Pfds at ~20%, and Imperial Metals equity & debt at ~14%. The other funds under Fairholme umbrella are Fairholme Focused Income Fund (FOCIX) and Fairholme Allocation Fund (FAAFX). Large equity holdings that are not in the 13F report include Fannie Mae (FNMA) pfds (FNMAS), Freddie Mac (FMCC) pfds (FMCKJ), and Imperial Metals (IPMLF).New Stakes:Kraft Heinz (KHC): KHC is a ~4% of the 13F portfolio position established this quarter at prices between $25 and $32.50 and the stock currently trades near the top of that range at $32.22.Stake Decreases:St Joe Companies (JOE): JOE is the largest stake by far at 97% of the 13F portfolio. The bulk of the position was purchased in the 2008-2009 timeframe and there have only been minor adjustments since. Last three quarters of 2017 had seen a combined ~14% increase at prices between $16.35 and $19.55.  Currently, it trades at $19.91. Berkowitz’s ownership stake is at ~44% of the business. Last seven quarters saw minor trimming.Note: Fairholme’s 2019 semi-annual letter had the following regarding St. Joe: By 2021, hopes to reach a run rate of 1,000 home and home lot sales per year; rent over 1,300 apartments, 900 hotel rooms, and 1.5 million square feet of commercial space; and register more than 1,400 The Clubs by JOE full-time members.Berkshire Hathaway (BRK.B): Q1 2019 saw a 5.6% of the portfolio stake purchased at prices between $188 and $209. The position was reduced by ~85% to a very small 0.84% portfolio stake last quarter at prices between $197 and $219. The stock currently trades at ~$226. There was a ~10% trimming this quarter.Note: Berkshire Hathaway has had a previous recent round-trip in the portfolio. It was a minutely small 0.34% of the portfolio stake established in Q3 2018 at prices between $186 and $222 and disposed next quarter at prices between $188 and $224.Vista Outdoor (VSTO): VSTO was a fairly large 6.5% of the portfolio stake established in H1 2018 at prices between $13 and $20.  Q3 2018 saw a ~30% selling at prices between $15.50 and $19 and that was followed with a ~60% selling next quarter at prices between $10 and $17.50. Last three quarters have seen another ~75% selling at prices between $4.41 and $12.21. The stock currently trades at $7.61 and the position is now very small at ~0.50% of the portfolio.Note: Vista Outdoor is a 2015 spinoff from Alliant Techsystems which in turn was spun off from Honeywell. It is a dominant producer of ammunition that is purchased by military, police, and governments around the world.Kept Steady:None.The spreadsheet below highlights changes to Fairholme’s 13F stock holdings in Q3 2019:"