"Tracking Bruce Berkowitz’s Fairholme Portfolio – Q2 2019 Update"
"Bruce Berkowitz’s 13F stock portfolio value decreased marginally this quarter from $473M to $467M.Fairholme reduced Vista Outdoor and Berkshire Hathaway during the quarter.The 13F portfolio has 98% 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 08/14/2019. Please visit our  article for an idea on how his holdings have progressed over the years and our  for the fund’s moves during Q1 2019.Berkowitz’s 13F stock portfolio value decreased marginally from $473M to $467M this quarter. The 13F portfolio currently has 98% 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).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.New Stakes:None.Stake Decreases:St Joe Companies (JOE): JOE is the largest stake by far at 98% 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 $16.95. Berkowitz’s ownership stake is at ~44% of the business. Last six quarters saw minor trimming.Vista Outdoor (VSTO): VSTO is a ~1% portfolio stake established in Q1 2018 at prices between $14 and $20 and increased by ~80% next quarter at prices between $13 and $18. The stock currently trades well below those ranges at $5.11. 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. There was another ~22% selling last quarter at prices between $8 and $12.25 and that was followed with another ~50% reduction this quarter at prices between $7.50 and $10.15.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.Berkshire Hathaway (BRK.B): Last quarter saw a 5.6% of the portfolio stake purchased at prices between $188 and $209. The stake was reduced by ~85% to a very small 0.84% portfolio position this quarter at prices between $197 and $219. The stock currently trades at ~$198.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.Kept Steady:None.The spreadsheet below highlights changes to Fairholme’s 13F stock holdings in Q2 2019:Regulatory filings thru 6/12/2019 – None."