In a recent interview Bruce Berkowitz, of Fairholme Capital Management (FAIRX), revealed that he was leaving Energy and heading into the Health Care sector. Was Berkowitz sincere? Or was it a quarterback misdirection?
A Google search revealed this unreferenced pdf presentation from June 2007 that points out (on page 19) that Fairholme Capital Management (FAIRX) is Clarke Inc‘s second largest institutional investor, with 1,142,400 shares (4.5% equity stake).
Also came across this article on a man often compared to Carl Icahn, George Armoyan whose private holding company Geosam Investments controls Clarke Inc (CLKFF) (a Canadian-based parent company of 6 subsidiaries, involved in transportation/shipping). This page describes their value-based investment process: Clarke value investment process.
This blog raves about Clarke Inc like it was a baby-Berkshire Hathaway.
Further digging reveals that Bruce Berkowitz is also holding an 8.44% stake in TAL International Group, Inc. (TAL), which is involved in Maritime container management services, Dry freight containers, etc.- and describes itself as a premier container leasing company.
Notice Berkowitz’s transportation-themed investments? Need I remind you about another well respected investor who recently became interested in transportation by way of Burlington Northern Santa Fe Corp (BNI).
Bottom line, two All-American quarterbacks have called the play: “Go long” (transportation).
Disclosure (“none” means no position): None
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3 replies on “Is Bruce Berkowitz calling Transportation The New Energy Sector?”
Todd,
Interesting post. A quick review of CLKFF on MSN Money and they have a solid balance sheet, good ROE, and ROC. Definitely worth a closer look.
My concern on the title of the post and the main point, however, is the amount of Fairholme’s investment. Just using the 2007 (unreferenced) presentation, with 1,142,400 shares, that only amounts to an investment of about 7.5 million by Fairholme (using current share price). That is not much for a fund the size of FAIRX. And when you consider Berkowitz’s documented investments in WLP and WCG of 509.5 million and 241.44 million respectively, that seems to contradict the point you are trying to make regarding Berkowitz favoring the transportation sector.
Even though FAIRX might have taken an equity stake in CLKFF of about 4.5% of shares outstanding, the company has only a 183.88 million market cap – not much to move FAIRX’s ticker. Any thoughts?
Thanks,
Chris
Welcome Vlado. I look forward to your posts.
thanks ryan.