Berkowitz Discloses New Stakes in Financial Sector
Fairholme manager picks up CIT Group and Regions Financial; also has new stake in Comcast.
Fund Times
Bruce Berkowitz's Fairholme Capital Management, the investment advisor to The Fairholme Fund (FAIRX), disclosed numerous new financial holdings in a recent filing with the SEC.
Berkowitz initiated new positions in CIT Group and Regions Financial (RF), as well as a small position in Marshall & Ilsley . He also disclosed a new stake in cable provider Comcast (CMCSA) .
While Berkowtiz disclosed a position in CIT bonds and floating rate notes in Fairholme Fund's annual report, the position in CIT Group common stock is new. As of Dec. 31, the stake was a 4% position for those positions disclosed in Fairholme Capital Management's Form 13F.
The new holdings in regional banks Regions and Marshall & Ilsley indicate Berkowitz has become increasingly confident he can discern the values in select financial companies. These new holdings, coupled with Berkowitz's previously disclosed stake in Citigroup (C), illustrate Morningstar's Manager of the Decade currently prefers banks trading at or below tangible book value. Berkowitz mentioned the metric, which is the book value of a firm minus intangible assets and goodwill, when recently asked about his investment in CIT by Morningstar's Mike Breen.
Citigroup and Regions Financial currently both trade below tangible book value. As of Dec. 31, Region's tangible book value per share (TBVPS) was $6.89 and the shares recently traded under $6.60. Similarly, Citigroup shares closed at $3.42 on Friday, and its TBVPS was $4.15 at the end of 2009.
Berkowitz also disclosed a new stake in cable services company Comcast. He picked up both the voting (CMCSA) and non-voting shares.
To see the complete Form 13F for the quarter ending Dec. 31 filed with the SEC, please click here.
| Fairholme Capital New Positions % of positions | |
 | |
| |
| New Positions | |
| |
| CIT Group (common) | 4 |
| |
| Comcast (CMCSA) | 3.9 |
| |
| Marshall & Ilsley | 1 |
| |
| Regions Financial (RF) | 2.3 |
 | |
| Existing Financials Positions | |
| |
| Berkshire (BRK.A) (BRK.B) | 11.9 |
| |
| Citigroup (C) | 7 |
| |
| Source: 13-F for period ending Dec. 31 |