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Francis Chou’s Top Holdings at Year End

February 11, 2014 | About:

Monica Wolfe

133 followers
Francis Chou (Trades, Portfolio) is one of the international gurus followed by GuruFocus, and is the President of the Toronto-based Chou Associates Management. The guru immigrated to Canada from India in 1976 and is oftentimes praised and acknowledged for his rags to riches story.

According to the company’s website, the investment process that the Chou funds operate off of is the value-oriented approach to investing. The fund continues to do intricate research which involves a “detailed analysis of the strengths of individual companies, with much less emphasis on short-term market factors.” The portfolio managers at Chou Associates focus primarily on the assessment of a company’s balance sheet, cash flow characteristics, profitability, industry position, special strengths, future growth potential and management ability.

As of the fourth quarter Francis Chou (Trades, Portfolio) held on to 23 stocks, two of which were new buys over the quarter, valued at $352 million. The following companies are Chou’s largest stock holdings as the close of the fourth quarter.

Resolute Forest Products (RFP)

Francis Chou (Trades, Portfolio)’s largest holding is in Resolute Forest Products where he maintains 4,227,259 shares of the company’s stock. This position makes up for 19.2% of his total portfolio as well as 4.46% of the company’s shares outstanding.

During the fourth quarter Chou made a slight increase of 2.42% by purchasing an additional 100,000 shares of the company’s stock. The guru purchased these shares near the estimated average fourth quarter price of $14.73 per share. Since his buy the price per share has jumped up roughly 30.5%.

Chou’s historical holding history:

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Resolute Forest Products provides a diverse range of products, including newsprint, commercial printing papers, market pulp and wood products. The company owns and operates pulp, paper mills and wood products facilities located in the United States, Canada and South Korea.

Resolute Forest Products’ historical revenue and net income:

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The analysis on Resolute Forest Products reports that the company’s revenue has been in decline over the past five years, its price is near a 2-year high and its P/B ratio is close to a 5-year high.

There are currently 11 gurus holding a position in Resolute Forest Products. Check out their holdings here.

Resolute Forest Products has a market cap of $1.83 billion. Its shares are trading at around $19.35 with a P/S ratio of 0.40 and a P/B ratio of 0.70.

Berkshire Hathaway (BRK.A)

The guru’s second largest holding is in Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway. The guru holds on to 300 shares of the company’s stock, representing 15.2% of his entire portfolio as well as 0.02% of the company’s shares outstanding.

Chou has not altered his position in the company since the second quarter of 2011.

Chou’s holding history of Berkshire Hathaway as of the fourth quarter:

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Berkshire Hathaway is a conglomerate holding company owning subsidiaries engaged in a number of business activities, including property and casualty insurance and reinsurance, utilities and energy, finance, manufacturing, service and retailing.

Berkshire Hathaway’s historical revenue and net income:

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The analysis on Berkshire Hathaway reports that the company’s price is near a 10-year high, it has shown predictable revenue and earnings growth and its operating margin is expanding.

The Peter Lynch Chart suggests that the company is currently undervalued:

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Berkshire Hathaway has a market cap of $279.25 billion. Its shares are currently trading at around $170,683.88 with a P/E ratio of 14.00, a P/S ratio of 1.60 and a P/B ratio of 1.30. Berkshire Hathaway had an annual average earnings growth of 6.80% over the past ten years.

GuruFocus rated Berkshire Hathaway the business predictability rank of 2.5-star.

Nokia Oyj (NOK)

Francis Chou (Trades, Portfolio)’s third largest holding is in Nokia where he maintains 5,000,000 shares of the company’s stock. This position takes up 11.5% of his total assets managed as well as 0.13% of the company’s shares outstanding.

The guru made a massive increase of 900% over the past quarter. Chou purchased 4.5 million shares somewhere near the estimated average quarterly price of $7.52 per share. Since his buy the price per share has dropped approximately -2.4%.

Francis Chou (Trades, Portfolio)’s holding history as of the most recent quarter:

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Nokia Oyj is a manufacturer of mobile devices, which makes devices for all consumer segments and offers Internet services that enable people to experience music, maps, media, messaging and games.

Nokia’s historical revenue and earnings growth:

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The analysis on Nokia reports that the company’s revenue has been in decline over the past five years, its dividend yield is at a 10-year low and the company has issued EUR1.5 billion of debt over the past three years.

Nokia has a market cap of $27.49 billion. Its shares are currently trading at around $7.34 with a P/S ratio of 1.60 and a P/B ratio of 2.90.

Sears Holdings Corporation (SHLD)

The guru’s fourth largest holding is in Sears Holdings where he owns 803,526 shares of the company’s stock. This position represents 11.2% of his total portfolio as well as 0.75% of the company’s shares outstanding.

The guru did not change his position in the company over the duration of the past quarter.

Francis Chou (Trades, Portfolio)’s historical holding history:

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Sears Holdings Corporation operates a national network of stores including Kmart, Sears and Roebuck and Co. Sears is a home appliance retailer and as well as tools, lawn and garden, fitness equipment and automotive repair and maintenance. It also maintains apparel offerings. The company operates in three reportable segments: Kmart, Sears Domestic and Sears Canada.

Sears’ historical revenue and net income:

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The analysis on Sears Holdings reports that the company’s revenue has declined over the past year, its price is at a 2-year low and over the past three years the company has issued $933 million of debt.

Sears Holdings has a market cap of $4.1 billion. Its shares are currently trading at around $38.56 with a P/S ratio of 0.10 and a P/B ratio of 2.00.

Sanofi (SNY)

The guru’s fifth largest position is in Sanofi where he maintains 410,000 shares of the company’s stock. This position makes up for 6.2% of the guru’s total assets managed and 0.02% of the company’s shares outstanding.

Chou did not alter his position over the past quarter. He has not made a move in his holdings in the company since 2010, and since then the price per share has jumped up 61.8%.

Chou’s historical holding history:

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Sanofi is a Paris-based healthcare company focused on patient needs and engaged in the research, development, manufacture and marketing of healthcare products. The company also discovers, develops and distributes therapeutic solutions.

Sanofi’s historical revenue and net income:

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The analysis on Sanofi reports that the company’s revenue has been in decline over the past five years, its dividend yield is also at a 5-year low and its price is sitting near a 10-year high.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Sanofi has a market cap of $131.72 billion. Its shares are currently trading at around $49.44 with a P/E ratio of 31.50 and a P/S ratio of 2.80. The dividend yield of Sanofi stocks is 2.70%. Sanofi had an annual average earnings growth of 14.80% over the past ten years.

Check out Francis Chou’s complete fourth quarter holdings here. Also check out this article on the history and investment philosophies of the Canadian-based guru.

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Rating: 5.0/5 (4 votes)

Comments

vgm
Vgm - 9 months ago

Any chance GF could do a Q&A with Chou? Would be intriguing.

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