MBIA stock jumps after Berkowitz discloses stake
Morningstar's fund manager of the decade bets big on bond insurer
By Sam Mamudi, MarketWatch
NEW YORK (MarketWatch) -- Shares of MBIA Inc. rose 11.5% Tuesday after it was disclosed late Monday that top fund manager Bruce Berkowitz had taken a large stake in the company.
Shares of MBIA (NYSE:MBI) closed at $7.17 after a regulatory filing showed that Berkowitz owned an 11% stake in the bond insurer. The filing showed that Berkowitz's investment-management firm, Fairholme Capital Management, holds slightly more than 22 million shares of MBIA.
The stock is up roughly 80% in 2010. In the past three months, though, it has struggled somewhat, and at Monday's close was down about 15% in that time period.
Berkowitz is best known as the manager of Fairholme Fund (NASDAQ:FAIRX) , which owns $14.6 billion in assets, according to Morningstar Inc. The fund's performance -- it has five-year and 10-year annualized returns of 7.1% and 12.7%, respectively -- earned him the designation of Morningstar's domestic-stock-fund manager of the decade. He was also named domestic-stock-fund manager of the year in 2009. Read more about Morningstar's fund managers of the decade.
"His aptitude for picking stocks sets him apart from his peers, and Fairholme's portfolio is filled with attractively priced firms that generate high free cash flow," wrote Morningstar earlier this year.
Berkowitz made headlines in May when it was reported he'd bought 15 million common shares and 20 million preferred shares of American International Group Inc. (NYSE:AIG) . At the time, the investment was valued at more than $700 million. Read about Berkowitz's first-quarter investments.
Monday's filings also showed that Berkowitz has lifted his AIG stake to 24.3% from the 18.9% disclosed in May. AIG's stock jumped 6.8% Tuesday.
During the financial crisis, MBIA was one of the hardest-hit firms, due to its role in selling derivative-based guarantees on mortgage-backed securities and collateralized debt obligations. As house prices fell, MBIA and fellow bond insurer Ambac Financial (NYSE:ABK) were forced to make good on those guarantees.
At the height of the credit boom in late 2006 and early 2007, MBIA shares frequently traded above $70. The shares hit a low on March 5, 2009, closing at $2.29, according to FactSet Research.
Bloomberg reported that Fairholme's stake in MBIA makes it the second-largest holder of the company, behind private-equity firm Warburg Pincus. |
发表于 2010-7-13 19:25
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