"Tracking Bruce Berkowitz’s Fairholme Portfolio – Q1 2020 Update"
"Bruce Berkowitz’s 13F stock portfolio value decreased this quarter from $528M to $510M.Fairholme added Kraft Heinz and increased Berkshire Hathaway during the quarter.The 13F portfolio is mostly invested in St. Joe Companies stock.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 05/15/2020. Please visit our  article for an idea on how his holdings have progressed over the years and our  for the fund’s moves during Q4 2019.Berkowitz’s 13F stock portfolio value decreased ~3% from $528M to $510M this quarter. The 13F portfolio currently has most of the assets invested in St. Joe Companies.Berkowitz’s flagship Fairholme Fund (FAIRX) has generated significant alpha since its December 1999 inception: the fund returned at an annualized rate of 9.08% compared to 6.08% 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 ~35%, St. Joe stock at ~43%, Fannie/Freddie Pfds at ~20%, and Imperial Metals at ~1%. The other funds under Fairholme umbrella are Fairholme Focused Income Fund (FOCIX) and Fairholme Allocation Fund (FAAFX). 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), Occidental Petroleum (OXY), Simon Property Group (SPG), and Western Midstream Partners (WES): These are the new positions this quarter. The 2.16% KHC stake was established at prices between ~$20 and ~$32 and it is now at ~$34. The stock is back in the portfolio after a quarter’s gap. It was a ~4% of the 13F portfolio position established in Q3 2019 at prices between $25 and $32.50 and disposed last quarter at prices between $26.50 and $33.50. OXY, SPG, and WES are very small stakes established this quarter.Stake Disposals:None.Stake Increases:St Joe Companies (JOE): 87% of Fairholme’s 13F assets are in St. Joe stock. 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. The stock is now at ~$22. Berkowitz’s ownership stake is at ~45% of the business. This quarter saw a minor increase.Note: Fairholme’s 2019 report notes record construction activity at St. Joe’s sites.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 next quarter at prices between $197 and $219. This quarter saw a ~9% portfolio stake built at prices between ~$162 and ~$230. The stock currently trades at ~$202.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.Stake Decreases: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 five quarters have seen the stake almost eliminated at prices between ~$5 and ~$18. The stock currently trades at ~$12 and the position is now very small at ~0.18% 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 Q1 2020:Jan 29, 2020 – Fairholme Funds : Performance: ~32.5% for 2019 vs ~31.5% for S&P. 9.08% annualized since Dec 1999 inception vs 6.08% annualized for S&P. CASH: 38.5%.Regulatory filings thru 2/26/2020: None."