"Tracking Bruce Berkowitz’s Fairholme Portfolio – Q2 2020 Update"
"Bruce Berkowitz’s 13F stock portfolio value increased this quarter from $510M to $598M.Fairholme 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 08/14/2020. Please visit our  article for an idea on how his holdings have progressed over the years and our  for the fund’s moves during Q1 2020.Berkowitz’s 13F stock portfolio value increased ~17% from $510M to $598M 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 8.38% compared to 5.76% 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 ~34%, St. Joe stock at ~46%, Fannie/Freddie Pfds at ~15%, 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:None.Stake Disposals: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 had seen the stake almost eliminated at prices between ~$5 and ~$18. The stock currently trades at $19.43. The remainder stake was disposed this quarter.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.Stake Increases:Berkshire Hathaway (BRK.A) (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. Last quarter saw a ~9% portfolio stake built at prices between ~$162 and ~$230. This quarter saw a one-third increase at prices between $170 and $202. The stock currently trades at ~$218 and the stake is at ~10% of the portfolio.Note: Fairholme’s mid-year 2020 report acknowledges hits to Berkshire’s portfolio companies due to the pandemic but concludes that their core insurance businesses could turn out to be a tailwind as most policies exclude pandemics and premiums are rising faster than risks.Stake Decreases:St Joe Companies (JOE): 86% 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 $21.28. Berkowitz’s ownership stake is at ~45% of the business. There was marginal trimming this quarter.Note: Fairholme’s mid-year 2020 report pointed to St. Joe’s project update  to indicate why they continue to be very bullish.Kraft Heinz (KHC), Occidental Petroleum (OXY), and Simon Property Group (SPG): These positions established last quarter were reduced this quarter. The 2.35% KHC stake was established at prices between ~$20 and ~$32 and it is now at $31.71. This quarter saw marginal trimming. OXY and SPG are very small stakes that saw reduction this quarter.Kept Steady:Western Midstream Partners (WES): The minutely small 0.49% WES stake was kept steady during the quarter.The spreadsheet below highlights changes to Fairholme’s 13F stock holdings in Q2 2020:Regulatory filings thru 5/30/2020: 13G/A – 4/9 – JOE – 26.5M shares – 44.5% of business."