Top 5 Stocks in Bruce Berkowitz Portfolio

In this article, we discuss top 5 stocks in Bruce Berkowitz portfolio. If you want to know more about Bruce Berkowitz’s portfolio, check out Bruce Berkowitz Portfolio and Latest Trades.

5. Citigroup, Inc. (NYSE:C)

Number of shares as of March 31, 2023: 82,500
Share of Fairholme portfolio as of March 31, 2023: 0.31%
Number of Hedge Fund Holders: 79

Citigroup, Inc. (NYSE:C) provides financial services worldwide to clients (individuals and institutions). The services include credit, wealth management, banking, and investment. Fairholme has held the Citigroup, Inc. (NYSE:C) stake severally since 2009. However, the fund has kept a low profile regarding the bank’s shares since Q1 2012. The company returned to the Bruce Berkowitz holdings in Q4 2021 when the fund purchased 20,000 shares. The stake increased to about 176,000 in Q2 2022, but according to the latest 13F filing, it has reduced to 82,500 shares.

During the analysis of 943 hedge fund portfolios for their Q1 2023 investments, Insider Monkey discovered that 79 of them had chosen to invest in Citigroup, Inc. (NYSE:C). Among these investors, Warren Buffett’s Berkshire Hathaway emerged as the largest stakeholder in our database, holding a significant position valued at $2.59 billion.

4. Berkshire Hathaway, Inc. (NYSE:BRK.B)

Number of shares as of March 31, 2023: 59,565
Share of Fairholme portfolio as of March 31, 2023: 1.52%
Number of Hedge Fund Holders: 108

Berkowitz’s interest in the Class B shares of Berkshire Hathaway, Inc. (NYSE:BRK.B), an investment firm operated by another guru, started in late 2010. FAIRX snapped up an initial 6.84 million shares and upped the stake to 9.43 million in Q2 2011. The billionaire investor has exited BRK.B twice, and the latest trades indicate he might be on the way out for the third time. In Q1 2023, the fund shed 3.86% (2,390 shares) of the BRK holding, trimming the shares to 59,565 and reducing the percentage of the portfolio to 1.52%.

According to the Insider Monkey database, 108 hedge funds held stakes in Berkshire Hathaway, Inc. (NYSE:BRK.B), with a combined value of $12.61 billion in Q1 2023. The most notable shareholder in Berkshire Hathaway, Inc. (NYSE:BRK.B) is Bill & Melinda Gates Foundation Trust.

3. Commercial Metals Company (NYSE:CMC)

Number of shares as of March 31, 2023: 1,272,900
Share of Fairholme portfolio as of March 31, 2023: 5.14%
Number of Hedge Fund Holders: 22

Commercial Metals Company (NYSE:CMC) is the third largest stock in FAIRX’s portfolio by share of AUM. The fund first acquired the stock in Q2 2021 when it purchased 558,000 shares and kept increasing the stake to a peak of 2.38 million in Q3 2022. Most recently, the fund trimmed 43% of the shareholding, reducing the stake to 1.27 million shares in Q1 2023.

22 of the 943 hedge funds part of Insider Monkey’s research for this year’s first quarter had bought and owned Commercial Metals Company (NYSE:CMC)’s shares. Out of these, the firm’s largest shareholder is Bruce Berkowitz’s Fairholme (FAIRX) with investment more than $62.24 million.

ClearBridge Investments made the following comment about Commercial Metals Company (NYSE:CMC) in its Q4 2022 investor letter:

“Our holdings in the materials sector also benefited relative performance during the period. Commercial Metals Company (NYSE:CMC), a steel and metal manufacturer, was a top performer. The company exceeded analyst expectations for quarterly earnings on the back of strong fundamental drivers, which have been significantly bolstered by the prospect of further infrastructure spending by the government. We believe the company will be able to capitalize on this increased investment and generate longterm returns for the portfolio. Strong drivers for chemical manufacturer and distributor Olin also drove portfolio performance.”

2. Enterprise Products Partners LP (NYSE:EPD)

Number of shares as of March 31, 2023: 4,182,800
Share of Fairholme portfolio as of March 31, 2023: 8.96%
Number of Hedge Fund Holders: 26

Enterprise Products Partners LP (NYSE:EPD) provides midstream energy services to consumers and producers in the natural gas market. Fairholme exited the stock in Q4 2020 and returned in Q2 2021 by purchasing 75,000 shares, a stake that grew to 4.14 million shares by the end of 2022. The fund added 40,000 more shares in Q1 2023 to bring the total holding to 4.18 million, which claims 8.96% of the fund’s portfolio.

In the first quarter, 26 hedge funds expressed a bullish stance on Enterprise Products Partners LP (NYSE:EPD), slightly up from the previous quarter’s 24 funds. Notably, Fairholme (FAIRX) holds the largest stake in the company.

Legacy Ridge Capital Management, LLC  made the following comment about Enterprise Products Partners L.P. (NYSE:EPD) in its Q4 2022 investor letter:

“Enterprise Products Partners L.P. (NYSE:EPD) is still owned in the fund and remains one of our largest positions, as it has been since the partnership was founded. This has not been a great investment. Shares are down about 6% since I first wrote about it. However, we have received $8.93 per share in dividends, which is about 34% of the 2018 share price. So, with dividends included we’ve made 28% cumulatively over 5-years. Still not good, but not an impairment of capital either.

Since 2018, EPD’s dividend yield has gone from 6.5% to 8% with the annual per share payout growing from $1.72 to $1.96, +14%. The pace of dividend growth has recently increased from about 2% to 5%+. Additionally, Distributable Cash Flow per share (what could be paid to us if management wanted to) has increased 22%, from $2.73 to $3.33, while leverage has come down a little over ½ a turn. So, the balance sheet and cash flow metrics are in better shape than they were 5-years ago, and they were pretty good 5-years ago.

The competitive dominance of the asset base, industry leading low leverage, and a founding family with multiple billions of dollars invested alongside us keep it a core holding in the portfolio. We’ll continue to own this company unless the shares become meaningfully overvalued, and if it gets cheaper, we would be very comfortable owning more.”

1. St Joe Co. (NYSE:JOE)

Number of shares as of March 31, 2023: 24,141,448
Share of Fairholme portfolio as of March 31, 2023: 83.08%
Number of Hedge Fund Holders: 13

St Joe Co. (NYSE:JOE) develops and manages real estate assets, with projects concentrated in Northwest Florida. Fairholme (FAIRX) first bought 18.45 million shares of JOE in Q1 2009. The holding remained stable at around 10 million shares until FAIRX went all in late 2020, pushing its holding of the stock to approximately 24% and consisting of over 80% of the fund’s assets under management. In the latest filing, FAIRX trimmed 0.60% of the St Joe Co. (NYSE:JOE) stake (about 147,000 shares), reducing the stock’s percentage of FAIRX portfolio to 83.08%.

According to Insider Monkey’s Q1 2023 database, 13 hedge funds were bullish on St Joe Co. (NYSE:JOE), compared to 15 funds in the prior quarter. Bruce Berkowitz’s Fairholme (FAIRX) is the largest stakeholder of the company, with 24.14 million shares worth $1 billion.

Praetorian Capital made the following comment about The St. Joe Company (NYSE:JOE) in its first quarter 2023 investor letter:

“The St. Joe Company (NYSE:JOE) owns approximately 175,000 acres in the Florida Panhandle. It has been widely known that JOE traded for a tiny fraction of its liquidation value for years, but without a catalyst, it was always perceived to be “dead money.”

Over the past few years, the population of the Panhandle has hit what I believe to be a critical mass where it now has a center of gravity that is attracting people who want to live in one of the prettiest places in the country, with zero state income taxes and few of the problems of large cities.

The oddity of the current disdain for so-called “value investments” is that many of them are growing quite fast. I believe that JOE will grow revenue at 30% to 50% each year for the foreseeable future, with earnings growing at a much faster clip. Meanwhile, I believe the shares trade at a single-digit multiple on Adjusted Funds from Operations (AFFO) looking out to 2024, while substantial asset value is tossed in for free…” (Click here to read the full text)

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