Bruce Berkowitz’s Noteworthy Q1 Moves in Financial Stocks

Berkowitz Nearly Disposes of Leucadia National Corp. (NYSE:LUK) Position

Leucadia National Corp. (NYSE:LUK) also felt Mr. Berkowitz’s bearishness in the first quarter of 2016, as Fairholme sold off 98% of its 4.54 million-share stake, keeping only 66,000 shares worth slightly more than $1 million on March 31. Once again, the stock has been on the rise since the first quarter ended, surging by more than 9.5%. Most recently, the strength seems to have been driven by the announcement a couple of weeks ago that the company was acquiring ITG Investment Research, LLC (formerly Majestic Research) from Investment Technology Group. More recently, the company’s investment banking business, Jefferies Group LLC, hired five senior investment bankers from Credit Suisse Group AG (ADR) (NYSE:CS); shares rose by 1.2% the day after the announcement.

Among the funds that we track, 33 were long Leucadia at the end of the first quarter, up from 29 at the end of 2015. Among the most bullish firms was Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, with a holding of 20.9 million shares worth roughly $338 million on March 31.

Berkowitz Doubles Down on Bank of America Corp (NYSE:BAC)

Finally, there’s Bank of America Corp (NYSE:BAC), one of Fairholme’s most bullish moves of the first quarter. After more than doubling its exposure to the company during the period, the firm held 8.57 million shares worth more than $115 million on March 31, making it the fund’s sixth-largest position. By the end of the first quarter of 2016, the company counted 109 other hedge funds with long positions, including Harris Associates, which boosted its stake in the company by 3% over the period; the firm disclosed ownership of 144.29 million shares, worth roughly $1.95 billion on March 31. While shares of Bank of America are down by 12.5% in 2016, they have managed to recuperate 8.8% of their value in the second quarter. On Monday, a U.S appeals court dismissed a $1.27 billion penalty that Bank of America was scheduled to pay in relation to a fraud case concerning defective mortgages. Shares of the bank are up by 2.6% since the announcement.

By the end of the first quarter of 2016, there were 109 other hedge funds with long positions in Bank of America, including Harris Associates, which boosted its stake in the company by 3% over the period to 144.29 million shares worth roughly $1.95 billion on March 31.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.