Everyone has their favorite “gurus”. The obvious picks being Warren Buffett, Charles Munger and Eddie Lampert. But outside those names there are a few interesting individuals whose picks are tougher to decipher. In the small cap arena we have Paul Sonkin who is profiled in Bruce Greenwald’s book and Aaron Edelheit. Moving on to a larger cap arena we find one of my favorite gurus, Bruce Berkowitz who I have written about before. I find most of his investment ideas pretty easy to understand and can see why he invests in certain companies. Given the decline in major stock averages I am looking forward to the companies “gurus” are investing in below are 3 stocks Bruce Berkowitz is investing according to SEC filings and what may be the reasoning behind them.
IDT Corporation (IDT)- According to this filing, Fairholme has a 6.4% stake in this small technology stock. I have no idea what the company does, but I do know its a 65 million market cap company with 169 million cash on hand. Income and cash flow wise not the best company to invest in, but the balance sheet looks solid.
Mohawk Industries (MHK)- According to this filing, Fairholme has a 3.7% stake in Mohawk Industries. I believe this is down from previous reports. Anyway, Mohawk is down significantly as its in the middle of the real estate bust. Under normal conditions the company has significant cash flow. Mohawk has a solid balance sheet which should allow it to weather the storm.
Winthrop Realty Trust (FUR)- According to this filing, Fairholme has a 11% stake in Winthrop Trust. My bet would be this is a real estate play. Winthrop is a 216 million dollar company with 141 million dollars in cash. If I wanted to investigate the company further I would definitely consider looking at its long term investments and land values as they are reported to be about 250 million each on the balance sheet.
Disclosure: None
{ 4 comments… read them below or add one }
Alex,
You misspelled Charlie Munger’s last name and Aaron Edelheit’s first name. Otherwise, nice work.
Dave,
your 2 for 2. Expect more as a) English is my second language b)i type fast and wrong
You named some of the hidden gems in value investing. i like Berkowitz investing philosophy. His fund is down this year but it is doing nowhere near as bad as other mutual funds.
http://www.fairholmefunds.com/10-28-2008.pdf
Just in case you missed it