"Tracking Bruce Berkowitz’s Fairholme Portfolio – Q3 2020 Update"
"Bruce Berkowitz’s 13F stock portfolio value increased this quarter from $598M to $653M.Fairholme decreased Kraft Heinz and dropped Occidental Petroleum 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 11/16/2020. Please visit our  article for an idea on how his holdings have progressed over the years and our  for the fund’s moves during Q2 2020.Berkowitz’s 13F stock portfolio value increased ~9% from $598M to $653M 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 ~8.4% compared to ~5.8% for S&P 500 index through H1 2020. 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, Freddie Mac (FMCC) pfds, and Imperial Metals (IPMLF).New Stakes:Bank of America (BAC), AT&T Inc. (T), Canadian Natural Resources (CNQ), KinderMorgan (KMI), Energy Transfer LP (ET), Apple Inc. (AAPL), and Occidental Petroleum (OXY) WTS: These are very small new stakes established this quarter.Stake Disposals:Occidental Petroleum (OXY): The ~1% OXY stake was established in Q1 2020 at prices between ~$10 and ~$47. It was reduced by ~25% last quarter at prices between ~$10.70 and ~$24.40 and the disposal this quarter was at prices between ~$9.70 and ~$18.30. The stock currently trades at $16.56.Note: The small stake in the common was replaced with a very small position in the warrants during the quarter.Stake Increases:Western Midstream Partners (WES): WES was a minutely small stake purchased in Q1 2020 at prices between ~$3 and ~$22. This quarter saw a ~85% stake increase to a ~0.66% portfolio stake at prices between $7.35 and $10.50. The stock is now at $13.70.Simon Property Group (SPG): The 0.52% SPG position was established in Q1 2020 at prices between ~$45 and ~$150. Last quarter saw a ~40% selling at prices between ~$44 and ~$96 while this quarter there was a ~80% stake increase at prices between ~$60 and ~$74. SPG currently trades at $85.55.Stake Decreases:St Joe Companies (JOE): 84% 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 $33.12. 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.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. Q1 2020 saw a ~9% portfolio stake built at prices between ~$162 and ~$230. There was a one-third increase last quarter at prices between $170 and $202. The stock currently trades at ~$232 and the stake is at ~10% of the portfolio. This quarter saw minor trimming.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.Kraft Heinz (KHC): The 1.22% KHC stake was established in Q1 2020 at prices between ~$20 and ~$32 and it is now at $32.84. This quarter saw a ~40% reduction at prices between ~$29 and ~$36.Kept Steady:None.The spreadsheet below highlights changes to Fairholme’s 13F stock holdings in Q3 2020:"