AmeriCredit Investor Could Lighten Stake
But "the portfolio has shrunk dramatically and that's going to put pressure on earnings growth," he says. "Earnings in the near term may not be strong enough to justify the valuation."
Fairholme isn't the only institutional investor taking bets on financial firms these days. Hedge fund investor John Paulson, which as been betting big on regional and large banks including Bank of America (BAC), JPMorgan Chase (JPM) and Regions Financial (RF), said in a filing last week that it bought shares in Citigroup (C) during the third quarter.
-- Written by Laurie Kulikowski in New York.
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