"Tracking Bruce Berkowitz’s Fairholme Portfolio – Q2 2022 Update"
"Bruce Berkowitz’s 13F stock portfolio value decreased this quarter from $1.72B to $1.21B.They increased Commercial Metals, Enterprise Product Partners, and Citigroup during the quarter.The 13F portfolio is mostly 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 8/15/2022. 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 2022.Berkowitz’s 13F stock portfolio value decreased ~30% from $1.72B to $1.21B 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 9.18% compared to 6.32% for S&P 500 index through H1 2022. FAIRX has however underperformed over the most recent 10-year period. 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:D R Horton (DHI) and West Fraser Timber (WFG): These are minutely small (less than ~0.5% of the portfolio each) positions established during the quarter.Stake Disposals:Sanderson Farms (SAFM): SAFM was a minutely small 0.08% of the portfolio position established last quarter but sold this quarter.Stake Increases:Commercial Metals (CMC), Enterprise Product Partners (EPD), and Citigroup (C ): These three positions were increased substantially over the last few quarters. The 6.27% of the portfolio stake in CMC was built over the last five quarters at prices between ~$29 and ~$44 and the stock currently trades at $37.46. EPD is a 7.24% of the portfolio position primarily built over the last four quarters at prices between ~$21 and ~$28. The stock is now at $25.81. The 0.67% Citigroup stake was built over the last three quarters at prices between ~$44 and ~$73. The stock currently trades at $47.25.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 next quarter at prices between $170 and $202. Q4 2020 saw a ~80% selling at prices between ~$201 and ~$234. That was followed with a ~15% reduction next quarter at prices between ~$227 and ~$265. The stock currently trades at ~$277 and the stake is now very small at 1.11% of the portfolio. Last several quarters have seen only minor adjustments.Alibaba Group Holdings (BABA): The BABA stake was almost doubled this quarter. It is still a minutely small 0.15% of the portfolio position.Stake Decreases:St Joe Companies (JOE): ~80% 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. Since then, the activity has been minor. The stock is now at $34.43. There was marginal trimming in the last three quarters. They control ~42% of the business.Note: Fairholme’s 2022 semi-annual report had the following on St. Joe: Although supply-chain issues have slowed progress there is no letup in demand.Kinder Morgan (KMI) and Energy Transfer LP (ET): The ~1% KMI position saw a ~220% stake increase in Q4 2020 at prices between ~$11.50 and ~$15 and it currently trades above that range at $17.90. H2 2021 saw a ~57% stake increase at prices between ~$15.25 and ~$18.70. There was a ~25% selling last quarter at prices between $16.35 and $19.25. This quarter saw marginal trimming. ET is a 0.22% of the portfolio position purchased at prices between ~$5 and ~$8.60 and it is now at $11.93. There was a two-thirds reduction this quarter at prices between ~$9.80 and ~$12.30.Old Republic International (ORI): The very small 0.58% stake in ORI was increased by ~60% in Q4 2021 at prices between ~$23 and ~$26. The stock currently trades at $21.97. There was a ~15% trimming this quarter.Kept Steady:Intel Corp (INTC): The 1.82% INTC stake was purchased over the last four quarters at prices between ~$45 and ~$68. The stock currently trades well below that range at $28.96.Apple Inc. (AAPL) and Walgreens Boots Alliance (WBA): These two minutely small (less than ~0.25% of the portfolio each) positions were kept steady this quarter.The spreadsheet below highlights changes to Fairholme’s 13F stock holdings in Q2 2022:Source: John Vincent. Data constructed from Fairholme's 13F filings for Q1 2022 and Q2 2022.Info from Annual/Semi-Annual Reports – 2021 annual (December 31, 2021): Performance: 10.20% annualized from 12/1999 inception compared to 7.36% for S&P 500. CASH: ~13%. Commentary: JOE – although profits have grown, not yet reflecting long-run potential. EPD – one of the largest public mid-stream with 50K miles pipelines, 260M barrel liquid storage, and 14B cubic foot gas storage – irreplacable and part of the solution for cleaner energy. CMC – manufactures steel reinforcing bars, etc. markets in sold-out condition – a third facility under construction & fourth planned – benefits from US Infra Invesment and Jobs Act. Imperial Metals – 30% owner of Red Chris which as a $2B copper and gold project underway – 30 years with payback less than 3 years at current prices. Fannie/Freddie – Uncle Sam must eventually release them from  federal conservator ship.Regulatory filings from 3/1/2022 to 6/11/2022:  None."