Berkowitz, Nygren Build Big Stakes in Health

Shares of drugmakers and health insurers tumbled after President Barack Obama's election on fears that his reform plans would cut companies' profit margins.

Bruce Berkowitz, manager of the Fairholme Fund(FAIRX Quote), started buying. By November, Fairholme had 48% of its assets in health-care stocks, including 18% in pharmaceutical giant Pfizer(PFE Quote), an outsized bet for a diversified fund.

The Fairholme Fund isn't alone in building a big stake in health care. Managers of the Oakmark Select(OAKLX Quote) and Pax World Balanced(PAXWX Quote) funds also snapped up the stocks, deeming them excessively cheap for companies that will face continued demand. ...